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Market structure and technology: evidence from the Italian National Health Service

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  • Silvana Robone
  • Alberto Zanardi

Abstract

Sutton (1991, Sunk costs and market structure. Cambridge: MIT Press; 1998, Technology and market structure. Cambridge: MIT Press) theorised that industries evolve into distinct market configurations in terms of concentration, depending upon product homogeneity and whether R&D or advertising are relevant relative to set-up costs. This paper tests the existence of such a relationship between technological profiles and market structure empirically, using the health care services provided by the Italian National Health Service as the specific economic framework. Our results support the empirical predictions made by Sutton. In particular, in markets where the technological intensity is low the lower bound to concentration converges monotonically to zero when the market size increases, for any level of product homogeneity. Conversely, in markets where the technological intensity is high the lower bound of concentration converges to some positive (non-zero) value when market size increases, while the lower bound increases (from zero) when the level of product homogeneity increases. Copyright Springer Science+Business Media, LLC 2006

Suggested Citation

  • Silvana Robone & Alberto Zanardi, 2006. "Market structure and technology: evidence from the Italian National Health Service," International Journal of Health Economics and Management, Springer, vol. 6(3), pages 215-236, September.
    • Handle: RePEc:kap:ijhcfe:v:6:y:2006:i:3:p:215-236
    DOI: 10.1007/s10754-006-9002-7
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    Cited by:

    1. Hessami, Zohal, 2014. "Political corruption, public procurement, and budget composition: Theory and evidence from OECD countries," European Journal of Political Economy, Elsevier, vol. 34(C), pages 372-389.
    2. Mascia, Daniele & Di Vincenzo, Fausto & Cicchetti, Americo, 2012. "Dynamic analysis of interhospital collaboration and competition: Empirical evidence from an Italian regional health system," Health Policy, Elsevier, vol. 105(2), pages 273-281.
    3. Eila Kankaanpää & Ismo Linnosmaa & Hannu Valtonen, 2011. "Public health care providers and market competition: the case of Finnish occupational health services," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(1), pages 3-16, February.
    4. Hessami, Zohal, 2010. "Corruption and the Composition of Public Expenditures: Evidence from OECD Countries," MPRA Paper 25945, University Library of Munich, Germany.
    5. Zohal Hessami, 2013. "Corruption, Public Procurement, and the Budget Composition: Theory and Evidence from OECD Countries," Working Paper Series of the Department of Economics, University of Konstanz 2013-27, Department of Economics, University of Konstanz.

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    More about this item

    Keywords

    Health care; Market structure; Technology; I11; L1; L8; O33;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L8 - Industrial Organization - - Industry Studies: Services
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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