An Empirical Analysis on the Impact of Market Concentration on the Financial Performance of General Private Clinics in Greece

Gazilas, Emmanouil Taxiarchis and Vozikis, Athanassios (2023): An Empirical Analysis on the Impact of Market Concentration on the Financial Performance of General Private Clinics in Greece.

Abstract

This research investigates the dynamics of the Greek General Private Clinics Sector over the period 2012-2020, examining the interplay between market concentration, as measured by the Herfindahl-Hirschman Index (HHI), and key financial ratios. The study delves into Return on Equity (ROE), Gross Profit Margin, Operating Profitability, Net Profit Margin, Earnings After Tax Margin, and Return on Assets financial ratios. Commencing with a moderately concentrated market in 2012 (HHI=775.74), subsequent years witnessed the sector's adaptability to evolving market dynamics, reflected in fluctuations in both market concentration and financial ratios. The unexpected positive correlation observed in 2015, where a decrease in HHI (710.39) coincided with an increase in Net Sales and EBITDA, challenges conventional expectations. Throughout the analyzed period, the sector showcased resilience, demonstrated by its ability to navigate changes in market concentration while sustaining and expanding earnings. In 2019, Net Sales and EBITDA experienced an upturn, reaching 554.31 million euros and 104.11 million euros, respectively. However, the intriguing scenario in 2020, marked by a slight decrease in Net Sales (540.55 million euros) coupled with a significant surge in HHI (1097.52), underscores the intricate interplay between market structure and financial performance. The juxtaposition of key financial ratios with the HHI provides a holistic view of the sector's financial landscape, offering valuable insights for practitioners, policymakers, and researchers alike.

• Item Type: MPRA Paper
• Language: English
• Keywords: Greek Healthcare, Market Concentration, Financial Ratios, Herfindahl Hirschman Index (HHI), General Private Clinics, Financial Analysis
• Subjects: I - Health, Education, and Welfare > I1 - Health > I11 - Analysis of Health Care Markets

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