Transaction costs, quality, and economies of scale: examining contracting choices in the hospital industry

This study examines make or buy decisions for 196 hospitals in the United States using transaction costs as the basis for analysis. We examine the potential effects of quality and economies of scale on these decisions. We find evidence to support the view that transaction costs, quality and economie...

Full description

Saved in:
Bibliographic Details
Published in:Journal of corporate finance (Amsterdam, Netherlands) Netherlands), 1998-12, Vol.4 (4), p.321-345
Main Authors: Coles, Jerilyn W, Hesterly, William S
Format: Article
Language:English
Subjects:
Contracting
Hospitals
Organization
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This study examines make or buy decisions for 196 hospitals in the United States using transaction costs as the basis for analysis. We examine the potential effects of quality and economies of scale on these decisions. We find evidence to support the view that transaction costs, quality and economies of scale play an important role in the integration decision and that this role depends on whether the transaction is industry-specific or generic in nature. This study examines the contracting choices of many firms across multiple transactions with a significantly larger data set than previous work in the area.
ISSN:0929-1199
1872-6313
DOI:10.1016/S0929-1199(98)00011-X