Market Structure and Technology: Evidence from the Italian National Health Service

Abstract

A key feature of Sutton's theory is that industries evolve to distinct market configurations in terms of concentration depending upon whether the markets have a large size, whether the corresponding products are essentially homogeneous, whether they are differentiated by research and development (R&D) and advertising. This paper aims to test empirically the consistency of the technological profiles and market structure of the health care sector in Italy with Sutton's predictions. The results of the analysis offer some empirical support in differing relationships between industry concentration levels and technological characteristics across health care productions.

Keywords: Health services, market structure, technology

JEL Classification: I11, L1, L8, O33