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Market structure and competition in the healthcare industry

Martin Lábaj (), Peter Silanič (), Christoph Weiss () and Biliana Yontcheva ()
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Martin Lábaj: University of Economics in Bratislava
Peter Silanič: University of Economics in Bratislava
Biliana Yontcheva: Vienna University of Economics and Business

The European Journal of Health Economics, 2018, vol. 19, issue 8, 1087-1110

Abstract: Abstract The present paper provides first empirical evidence on the relationship between market size and the number of firms in the healthcare industry for a transition economy. We estimate market-size thresholds required to support different numbers of suppliers (firms) for three occupations in the healthcare 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) which characterise different stages of the transition process. Our results suggest that the relationship between market size and the number of firms differs both across industries and across periods. In particular, we find that pharmacies, as the only completely liberalised market in our dataset, experience the largest change in competitive behaviour during the transition process. Furthermore, we find evidence for correlation in entry decisions across administrative borders, suggesting that future market analysis should aim to capture these regional effects.

Keywords: Health care; Entry models; Competition; Regulation; Transition economies (search for similar items in EconPapers)
JEL-codes: I11 I18 L22 D22 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:spr:eujhec:v:19:y:2018:i:8:d:10.1007_s10198-018-0959-1