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Firm size distribution: testing the "independent submarkets model" in the Italian motor insurance industry

Luigi Buzzacchi and Tommaso Valletti

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper tests the presence of multiple independent submarkets in the Italian motor insurance industry. Independence is motivated by administrative boundaries among provinces and by further locational reasons. We find that the independence effects are sufficient to induce a minimum degree of inequality in the size distribution of firms once submarkets are aggregated. These results are fully consistent with the predictions of Sutton (1998). We also show that the degree of skewness in the firms size distribution is related to characteristics such as the population living in an area, its density and the riskiness of a submarket.

Keywords: size distribution of firms; independent submarkets; insurance companies (search for similar items in EconPapers)
JEL-codes: G22 L11 (search for similar items in EconPapers)
Pages: 24 pages
Date: 1999-09
References: Add references at CitEc
Citations: View citations in EconPapers (3)

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http://eprints.lse.ac.uk/6749/ Open access version. (application/pdf)

Related works:
Journal Article: Firm size distribution: Testing the "independent submarkets model" in the Italian motor insurance industry (2006) Downloads
Working Paper: Firm Size Distribution: Testing the 'Independent Submarkets Model' in the Italian Motor Insurance Industry (2002) Downloads
Working Paper: Firm Size Distribution: Testing the "Independent Submarkets Model" in the Italian Motor Insurance Industry (1999) Downloads
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