Mergers, Coordinated Effects and Efficiency in the Portuguese Non-Life insurance industry

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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 firm-level 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.
Original languageUnknown
Pages (from-to)554-568
JournalInternational Journal of Industrial Organization
Issue numberSI5
Publication statusPublished - 1 Jan 2013

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