Transistors are used for many purposes. When used as amplifiers, high gain is often desirable. However, it can be desirable for such a transistor to be substantially linear as non-linearity can introduce distortion, and it is typically desirable that the gain of a transistor should not change in response to operating conditions such as collector-emitter voltage Vce. This is generally indicated by a transistor exhibiting a relatively large “Early” voltage.
The Early effect (named after its discoverer James Early) describes how an effective width of a base region of a bipolar transistor changes with collector-emitter voltage. The width of the base affects the gain of the transistor. Consequently the gain of a transistor can vary with the instantaneous amplitude of a signal. If the signal was a sinusoid then the gain applied to the peak of the sinusoid would be different to the gain applied to the trough of the sinusoid, which gives rise to harmonic distortion