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Market Structure and Competition in the Health-care Industry: Results from a Transition Economy

Author

Listed:
  • Martin Lábaj

    () (Institute of Economic Research SAS)

  • Alzbeta Siskovicova
  • Barbora Skalicanova
  • Peter Silanic
  • Christoph Weiss
  • Biliana Yontcheva

Abstract

The present paper provides first empirical evidence on the relationship between market size and the number of fi rms in the health-care industry for a transition economy. We estimate market size thresholds required to support diff erent numbers of suppliers (fi rms) for three occupations in the health-care industry in a large number of distinct geographic markets in Slovakia, taking into account the spatial interaction between local markets. The empirical analysis is carried out for three time periods (1995, 2001 and 2010) characterizing diff erent stages of the transition process. Our results suggest that the relationship between market size and the number of fi rms diff ers both across industries, and across periods. Furthermore, we fi nd evidence for correlation in entry decisions across administrative borders.

Suggested Citation

  • Martin Lábaj & Alzbeta Siskovicova & Barbora Skalicanova & Peter Silanic & Christoph Weiss & Biliana Yontcheva, 2015. "Market Structure and Competition in the Health-care Industry: Results from a Transition Economy," Department of Economic Policy Working Paper Series 010, Department of Economic Policy, Faculty of National Economy, University of Economics in Bratislava.
  • Handle: RePEc:brt:depwps:010
    as

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    References listed on IDEAS

    as
    1. Catherine Schaumans & Frank Verboven, 2015. "Entry and Competition in Differentiated Products Markets," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 195-209, March.
    2. Gaynor, Martin & Town, Robert J., 2011. "Competition in Health Care Markets," Handbook of Health Economics, Elsevier.
    3. Michael J. Mazzeo, 2002. "Product Choice and Oligopoly Market Structure," RAND Journal of Economics, The RAND Corporation, vol. 33(2), pages 221-242, Summer.
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    5. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    6. Bresnahan, Timothy F & Reiss, Peter C, 1991. "Entry and Competition in Concentrated Markets," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 977-1009, October.
    7. J. Levin & L. Einav., 2012. "Empirical Industrial Organization: A Progress Report," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 1.
    8. Jaap H. Abbring & Jeffrey R. Campbell, 2010. "Last-In First-Out Oligopoly Dynamics," Econometrica, Econometric Society, vol. 78(5), pages 1491-1527, September.
    9. Joseph P. Newhouse & Albert P. Williams & Bruce W. Bennett & William B. Schwartz, 1982. "Does the Geographical Distribution of Physicians Reflect Market Failure?," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 493-505, Autumn.
    10. Catherine Schaumans & Frank Verboven, 2008. "Entry and regulation: evidence from health care professions," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 949-972.
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    12. Correia Isabel & Veiga Paula, 2010. "Geographic distribution of physicians in Portugal," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 11(4), pages 383-393, August.
    13. Lábaj, Martin & Morvay, Karol & Silanic, Peter & Weiss, Christoph & Yontcheva, Biliana, 2016. "Market Structure and Competition in Transition: Results from a Spatial Analysis," Department of Economics Working Paper Series 4851, WU Vienna University of Economics and Business.
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    More about this item

    Keywords

    entry thresholds; competition; Slovakia; health-care industry;

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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