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

Matthias Mertens and Bernardo Mottironi

Economics Letters, 2025, vol. 255, issue C

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: Market power; Markups; Markdowns; Firm size (search for similar items in EconPapers)
JEL-codes: J42 L11 L13 L25 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:255:y:2025:i:c:s0165176525003374

DOI: 10.1016/j.econlet.2025.112500

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