Dobbelaere, S. and Wiersma, Q. (2025). The impact of trade liberalization on firms’ product and labor market power Industrial and Corporate Change, 34(1):210--233.

This paper examines the impact of trade liberalization on firms{\textquoteright} product and labor market power. We estimate the prevalence and intensity of price-cost markups and either wage markups or wage markdowns, taking the dependence between these model-consistent measures of product and labor market power into account. Exploiting reductions in tariffs upon China{\textquoteright}s World Trade Organization accession, we find that trade liberalization has not switched firms away from exercising product and labor market power. Reducing input tariffs has widened price-cost markups, narrowed wage markdowns, and widened wage markups at the firm level. We reveal heterogeneous trade liberalization effects on the intensity of firms{\textquoteright} product and labor market power.