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http://dx.doi.org/10.5392/JKCA.2013.13.11.176

The Economies of Scale and Scope in the Medical Service Industry of Korea and Its Policy Implications  

Kim, Seon Jae (배재대학교 전자상거래학과)
Lee, Younghwa (선문대학교 영어학과)
Publication Information
The Journal of the Korea Contents Association / v.13, no.11, 2013 , pp. 176-186 More about this Journal
Abstract
The purpose of this study is to investigate the economies of scale and scope in the medical service industry of Korea using the multiple output translog cost function. The results show that the single-product scale economy (SSE) estimated is highly significant and less than one, implying that Korean medical service institutes are on average enjoying the product-specific scale economy in providing their services. In addition, the ray scale economies (RSE) reflects the overall economy of the scale in individual firm, showing less than one. Thus, the medical service industry in Korea is generally operating in the region of increasing returns to scale. The findings provide evidence of the economy of scope, in particular, with the joint production of inpatient and outpatient services as well as inpatient and administrative services.
Keywords
Medical Service Industry; Economies of Scale and Scope; Translog Cost Function; Korea;
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