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Larger firms pay higher wages

Large firms are both more innovative and more productive. They invest more in machinery. They are much more likely than small firms to develop new product lines, to introduce new technology, to open and close plants, to outsource, and to engage in joint ventures with foreign partners. These firms produce more with a given amount of labor, and export more as well. They also pay substantively higher wages than micro- and small enterprises. In developing countries, however, many people work in very small and not necessarily very dynamic economic units.

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