Do larger firms have higher markups? / Matthias Mertens, Bernardo Mottironi ; Halle Institute for Economic Research (IWH) - Member of the Leibniz Association
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Do larger firms have higher markups?
Discovery
1830607111
URN
urn:nbn:de:gbv:3:2-932391
DOI
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Publication history
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, [05. January 2023]
Content
1 Online-Ressource (III, 68 Seiten, 3,12 MB) : Diagramme
Edition
Language
eng
Comment
Literaturverzeichnis: Seite 67-68
Abstract
Several models posit a positive cross-sectional correlation between markups and firm size, which, among others, characterizes misallocation, factor shares, and gains from trade. Yet, taking labor market power into account in markup estimation, we show that larger firms have lower markups. This correlation turns positive only after conditioning on wage markdowns, suggesting interactions between product and labor market power. Our findings are robust to common criticism (e.g., price bias) and hold across 19 European countries. We discuss the resulting implications and highlight studying input and output market power within an integrated framework as an important next step for future research.
Series
IWH-CompNet discussion papers ; 2023, no. 1 ppn:887996302