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Does non-profit commercialization help reduce social inequality? Revisiting the cross-subsidization hypothesis

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  • Young Joo Park
  • Jiahuan Lu
  • Jongmin Shon

Abstract

The non-profit sector has a long history of serving vulnerable people and promoting social equity. The growing reliance on commercial income in the non-profit sector has aroused wide concern about mission drift and the loss of identity. The cross-subsidization hypothesis is often used to justify non-profit commercialization, but this hypothesis has not been subject to many empirical tests. This study examines how non-profit hospitals’ commercial income affects their provision of community benefits. The results indicate that hospitals with more commercial income provide less unprofitable programmes to serve disadvantaged groups and reduce health disparities.

Suggested Citation

  • Young Joo Park & Jiahuan Lu & Jongmin Shon, 2022. "Does non-profit commercialization help reduce social inequality? Revisiting the cross-subsidization hypothesis," Public Management Review, Taylor & Francis Journals, vol. 24(12), pages 1957-1979, December.
    • Handle: RePEc:taf:rpxmxx:v:24:y:2022:i:12:p:1957-1979
    DOI: 10.1080/14719037.2021.1945668
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