The dynamics of product and labour market power: Evidence from Lithuania

Ziran Ding, Jose Garcia‐Louzao and Valentin Jouvanceau

Economics of Transition and Institutional Change, 2025, vol. 33, issue 1, 165-194

Abstract: This paper characterizes the power dynamics of firms in product and labour markets in Lithuania between 2004 and 2018. We first show that both markets are not perfectly competitive, as both price markups and wage markdowns are far from unitary and homogeneous. We show that the dynamics of these margins followed different patterns. On the one hand, dispersion and the economy‐wide markup have increased, suggesting an increase in product market power. On the other hand, we document a decline in monopsony power, as heterogeneity and the aggregate markdown have declined. Altogether, our results underscore the importance of jointly analyzing product and labour markets when assessing firms' market power.

Date: 2025
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https://doi.org/10.1111/ecot.12427

Related works:
Working Paper: The Dynamics of Product and Labor Market Power: Evidence from Lithuania (2024)
Working Paper: The Dynamics of Product and Labor Market Power: Evidence from Lithuania (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:ectrin:v:33:y:2025:i:1:p:165-194

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