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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Discovery
1830607111
URN
urn:nbn:de:gbv:3:2-932391
DOI
ISBN
ISSN
Autorin / Autor
Beiträger
Körperschaft
Erschienen
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, [05. January 2023]
Umfang
1 Online-Ressource (III, 68 Seiten, 3,12 MB) : Diagramme
Ausgabevermerk
Sprache
eng
Anmerkungen
Literaturverzeichnis: Seite 67-68
Inhaltliche Zusammenfassung
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.
Schriftenreihe
IWH-CompNet discussion papers ; 2023, no. 1 ppn:887996302