Small Business Economics

, Volume 6, Issue 3, pp 185–191 | Cite as

Firm formation with heterogeneous management and labor skills

  • Boyan Jovanovic


When both management skills and labor skills differ in the population, the nature of firm formation can differ radically from the equilibrium we are used to dealing with: The best potential managers could end up as wage workers. This happens when managerial skills are positively correlated with working skills, and there is some empirical evidence that this is indeed the case.


Empirical Evidence Industrial Organization Management Skill Labor Skill Wage Worker 
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Copyright information

© Kluwer Academic Publishers 1994

Authors and Affiliations

  • Boyan Jovanovic
    • 1
  1. 1.New York UniversityNew YorkUSA

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