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

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  • Duarte Miguel Machado Carneiro de Brito

    (Universidade Nova de Lisboa and CEFAGE-UÉ)

  • Pedro Pereira

    (Autoridade da Concorrência and CEFAGE-UÉ)

  • Joaquim José dos Santos Ramalho

    (CEFAGE)

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. FirmsÂ’ demand curves are not very elastic. FirmsÂ’ 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.

Suggested Citation

  • Duarte Miguel Machado Carneiro de Brito & Pedro Pereira & Joaquim José dos Santos Ramalho, 2013. "Mergers, Coordinated Effects and Efficiency in the Portuguese Non-Life Insurance Industry," CEFAGE-UE Working Papers 2013_18, University of Evora, CEFAGE-UE (Portugal).
    • Handle: RePEc:cfe:wpcefa:2013_18
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    Cited by:

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    2. Daniel Attah-Kyei & Charles Andoh & Saint Kuttu, 2023. "Risk, technical efficiency and capital requirements of Ghanaian insurers," Risk Management, Palgrave Macmillan, vol. 25(4), pages 1-27, December.
    3. Michel, Christian, 2013. "Identification and Estimation of Intra-Firm and Industry Competition via Ownership Change," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80488, Verein für Socialpolitik / German Economic Association.
    4. Ariane Charpin & Joanna Piechucka, 2020. "Merger Efficiency Gains: Evidence from a Large Transport Merger in France," Discussion Papers of DIW Berlin 1843, DIW Berlin, German Institute for Economic Research.
    5. Christian, Michel, 2013. "Identification and Estimation of Intra-Firm and Industry Competition via Ownership Change," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 409, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

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    More about this item

    Keywords

    Mergers; Market Power; Efficiency; Non-Life Insurance.;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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