Do larger firms exert more market power? : markups and markdowns along the size distribution / Matthias Mertens, Bernardo Mottironi ; editor: Halle Institute for Economic Research (IWH) - Member of the Leibniz Association
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Discovery
1860025927
URN
urn:nbn:de:gbv:3:2-991975
DOI
ISBN
ISSN
Autorin / Autor
Beiträger
Körperschaft
Erschienen
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, [2023?]
Umfang
1 Online-Ressource (III, 55 Seiten, 3,31 MB) : Diagramme
Ausgabevermerk
This version: September 18, 2023
Sprache
eng
Anmerkungen
Literaturverzeichnis: Seite 31-36, Seite 55
Inhaltliche Zusammenfassung
Several models posit a positive cross-sectional correlation between markups and firm size, which characterizes misallocation, factor shares, and gains from trade. Accounting for labor market power in markup estimation, we find instead that larger firms have lower product markups but higher wage markdowns. The negative markup-size correlation turns positive when conditioning on markdowns, suggesting interactions between product and labor market power. Our findings are robust to common criticism (e.g., price bias, non-neutral technology) and hold across 19 European countries. We discuss possible mechanisms and resulting implications, highlighting the importance of studying input and output market power in a unified framework.
Schriftenreihe
IWH-CompNet discussion papers ; 2023, no. 1 (January 2023) [rev.] ppn:887996302