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

Duarte Brito, Pedro Pereira and Joaquim Ramalho ()

CEFAGE-UE Working Papers from University of Evora, CEFAGE-UE (Portugal)

Abstract: 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.

Keywords: Mergers; Market Power; Efficiency; Non-Life Insurance. (search for similar items in EconPapers)
JEL-codes: D43 K21 L13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-eff, nep-ias and nep-ind
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:cfe:wpcefa:2013_18

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