Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/249322 
Year of Publication: 
2020
Series/Report no.: 
Department of Economic Policy Working Paper Series No. 23
Publisher: 
University of Economics in Bratislava, Department of Economic Policy, Bratislava
Abstract: 
We study the relationship between market size and a number of firms in several healthcare professions in Slovakia to provide a new evidence about their entry decisions and a toughness of competition in the market. The size of a local market to support the entry of the first general practitioner is estimated to 1400 inhabitants. It equals 1700 inhabitants for the first pharmacy to enter, and 2300 for pediatricians. The population has to more than double for the second professional to enter. To support the second firm, the population per firm in the market has to increase by 30 % for pharmacies, by 25 % for general practitioners, and by almost 40 % for pediatricians. However, after the entry of the second firm, the intensity of competition does not change, except for pediatricians. The results are robust to spatial interactions taken into account. However, our estimates of spatial interactions show negative (but decreasing) spatial spillover effects for pharmacies, general practitioners, and dentists between 1995 and 2010. In this period, competitive effects prevailed and outweighed demand spillovers. We document that demand effect continued to grow since 2010 and in 2017 outweighed the competition effect for pharmacies.
Subjects: 
entry models
healthcare market
industrial organization
JEL: 
D22
I11
L22
R12
Document Type: 
Working Paper

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