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Mergers, Coordinated Effects and Efficiency in the Portuguese Non-Life Insurance Industry

  • Duarte Brito

    ()

    (Universidade Nova de Lisboa and CEFAGE-UE)

  • Pedro Pereira

    ()

    (Autoridade da Concorrência and CEFAGE-UE)

  • Joaquim Ramalho

    ()

    (CEFAGE-UE)

We evaluate the impact on market power and efficiency of a series of mergers on three Portuguese non-life insurance markets. We specify and estimate, with a panel of firmlevel data, a structural model which includes: preferences, technology, and a market equilibrium condition. Firms’ demand curves are not very elastic. Firms’ technologies exhibit scale and scope economies and high cost efficiency scores. We find that, for the period following the mergers, there is no evidence of: (i) an increase in market power through coordinated behavior, or (ii) changes in cost efficiency levels. In addition, social welfare increased.

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Paper provided by University of Evora, CEFAGE-UE (Portugal) in its series CEFAGE-UE Working Papers with number 2013_18.

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Length: 50 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:cfe:wpcefa:2013_18
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Web page: http://www.cefage.uevora.pt
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