Akademik Veri Yönetim Sistemi
European Association for Research in Industrial Economics (EARIE) 2021, Bergen, Norway, Bergen, Norveç, 27 - 28 Ağustos 2021, ss.1
This paper investigates the hospital market in Turkey for a period in which a surge happened in the number of private hospitals nationwide after the inception of a Health Transformation Program (HTP) 2003-2013. We employ the static entry model of Bresnahan and Reiss (1991) to estimate the entry thresholds in a cross-section of local districts of Turkey for the years 2002 and 2010. These estimations, firstly, explain the number of private hospitals that operate in the local markets of Turkey. Secondly, they provide predicted minimum market sizes necessary for a specific number of hospitals to enter a local market; in turn, they allow inferring the changes in competition with hospital entry. Also, the multi-period estimations help to explore the change in the nature of competition over years; and they provide a measure of the overall role of the recent health reforms and regulations in shaping the hospital industry. Our estimates robustly reveal that per hospital market size thresholds do not display an increasing path; that is, more private hospitals after first entry do not lead to a rise in competitive conduct. From this aspect, the paper provides an example of industry environment in which “one is enough” to ensure competition. Also, the discrepancy observed between the estimated market sizes for the pre-reform and post-reform periods suggests that the predicted carrying capacities of the local markets has increased during the HTP. Moreover, along with serving to guide antitrust merger analysis, the counter-factual policy simulations reveal that some districts have smaller number of private hospitals than their predicted carrying capacity whereas some others have more. This might be an indication of market distortions due to the government interventions such as the CoN entry regulation.
Keywords: Firm entry, competition, regulation, health reforms, Turkish hospital industry
JEL Codes: D43, I11, I18, K23, L11, L13, L51, L52, L9