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The basic point of the article is correct despite everyone here in comments coming up with ad hoc arguments against it. This is Basic 101 microeconomics (pick
by nabla9 2y ago
The basic point of the article is correct despite everyone here in comments coming up with ad hoc arguments against it.
This is Basic 101 microeconomics (pick some undergraduate text from economics and look it up.) There is also a whole subfield of economics called industrial organization that deals with this stuff.
Firm size matters for productivity. Larger firms are on average more productive than smaller ones. Partly it is because gains from increasing returns to scale but better access to resources, organizational capabilities, and international reach also matters. Large companies tend to offer higher compensation. The average pay per employee increases with company size. This is good for the economy.
Take for example Greece. People in Northern Europe like to think that Greeks are poor because they are lazy. However, they are among the hardest-working people in the EU—insane hours on average. But Greece has no large-scale industry. It can't compete within the rest of EU or internationally.
- logicchains 2y ago>Larger firms are on average more productive than smaller ones Do you have any references for this that demonstrate it empirically? Theoretically, larger firms have economies of scale, but they also run into the same internal coordination/incentive problems that communist countries do, due to internal resource allocation being driven by internal politics rather than a market. I.e. command economies (and the average corporation is a command economy internally) face diseconomies of scale.
- marcosdumay 2y ago> This is Basic 101 microeconomics Interesting. I've only read one intro to microeconomics book, but I remember it having a hand-waved graph with a clear peak on some unspecified point. And an explanation that the peak's position depends on a lot of factors.