The schumpeterian paradox is an interpretation of the néo-schumpeterians which consider that the thought of J.A. Schumpeter is made conspicuous by a contradiction on the question of the relation between the size of the companies and their innovatives capacities. We reject this interpretation by...

In this paper a general equilibrium model is constructed to explain the emergence of firms and change in firm size by the tradeoff between economies of specialization and transaction cost. We show that firms emerge from the development of division of labor if the transaction efficiency for labor...