ENTRY DECISIONS AND ASYMMETRIC COMPETITION BETWEEN NON‐PROFIT AND FOR‐PROFIT HOMES IN THE LONG‐TERM CARE MARKET

Iris Grant, Iris Kesternich and Johannes Van Biesebroeck

International Economic Review, 2022, vol. 63, issue 2, 631-670

Abstract: Demand for long‐term care services is growing strongly. Using a rich administrative data set for Germany, we examine strategic interaction between nonprofit and for‐profit nursing homes. The estimated competitive effects imply that competition is much stronger within type, suggesting that they provide differentiated products. Over time, the entry behavior of for‐profit homes has converged to that of the more established nonprofits and between‐type competition has become stronger. Counterfactual simulations of proposed changes in government policy indicate that even moderate changes have a large impact on the fraction of markets that remain unserved or only served by a single type.

Date: 2022
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https://doi.org/10.1111/iere.12544

Related works:
Working Paper: Entry decisions and asymmetric competition between non-profit and for-profit homes in the long-term care market (2020)
Working Paper: Entry decisions and asymmetric competition between non-profit and for-profit homes in the long-term care market (2019)
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