Is it generally better for an economy to have more big for-profit organizations that can wield massive capital, or more small orgs increasing competition & filling niches? (Also: how important is org size to per-employee labor productivity, holding access to capital constant?)
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Seems like that depends a lot on the specific industry!
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A couple of things immediately come to mind! 1) Does the product benefit a lot from close integration up or down the supply chain (On the margin the more it benefits from integration, the more our prior should be that large companies are probably efficient)
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2) How high are fixed costs? Higher fixed costs -> more concentration 3) Is a lot of very specialized talent necessary? The more talent is relatively homogeneous and can easily plug and play, the easier it will be for smaller companies to thrive.
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