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Impact of Mergers on product repositioning: Evidence from the French Hospital Industry. (joint work with Joanna Piechucka)

Wednesday 28 November 2018, 3.00PM to - 4.15pm

Speaker(s): Daniel Herrera (Paris)

Abstract: This paper aims to provide insights on the impact of mergers on the repositioning of hospital services by: (1) providing a theoretical framework where multiproduct firms are allowed to change their product assortment and compete in quality; (2) exploiting a rich and unique database on the French hospital industry for the years 2009-2014. Our findings show that following a merger, private hospitals distance themselves from each other byre-positioning their health services offered. This non-cannibalization strategy is in line with our theoretical framework. Also, we find that merging and non-merging hospitals increase their qualities after post-merger. To our knowledge, no economic studies have attempted to evaluate the economics effects of mergers and acquisitions in the hospital industry on service repositioning. We contribute to the existing literature on the use of positioning of products/services health services as a competitive tool. We believe that such studies can help competition authorities improve their assessment of potential effects of mergers by accounting for another dimension of competition.

Location: Alan Maynard Auditorium (R/C/014)

Admission: All welcome