Dissecting firms’ market power since EU accession: evidence from Lithuania

Firms’ power in the product and labour markets are closely linked. Examining firm-level data from Lithuania between 2004 and 2018, this column finds that firms are gaining power in the product market but losing it in the labour market. The micro-level analysis suggests rent-sharing between firms and workers, while the macro-level analysis highlights the reallocation forces across industries and firms. The results highlight the importance of jointly analysing both markets when assessing firms' market power.