Do larger firms exert more market power? Markups and markdowns along the size distribution

Matthias Mertens and Bernardo Mottironi

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Combining financial statements with firm-level product prices, we find that larger firms exhibit lower markups, although they are overcompensated by substantially higher wage markdowns. We explain our divergence from prior results by highlighting how labor market power affects markup estimates.

Keywords: firm size; markdowns; market power; markups (search for similar items in EconPapers)
JEL-codes: J42 L11 L13 L25 (search for similar items in EconPapers)
Pages: 4 pages
Date: 2025-09
New Economics Papers: this item is included in nep-com and nep-lma
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Published in Economics Letters, September, 2025, 255. ISSN: 0165-1765

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:128958

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