Do Larger Firms Exert More Market Power? Markups and Markdowns along the Size Distribution

Matthias Mertens

Bernardo Mottironi

September 1, 2025
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.

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September 1, 2025
Matthias Mertens, Bernardo Mottironi (). Do Larger Firms Exert More Market Power? Markups and Markdowns along the Size Distribution. Published in Economics Letters. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S0165176525003374. Accessed .
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@article{,
  title     = { Do Larger Firms Exert More Market Power? Markups and Markdowns along the Size Distribution },
  author    = { Matthias Mertens, Bernardo Mottironi },
  journal   = { Economics Letters },
  year      = {  },
  url       = { https://www.sciencedirect.com/science/article/abs/pii/S0165176525003374 }
}
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