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Faithful Strategies: How Religion Shapes Nonprofit Management

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  • Filistrucchi, L.
  • Prüfer, J.

    (Tilburg University, Center for Economic Research)

Abstract

Abstract: This paper studies the strategies employed by Catholic and Protestant nonprofit hospitals in Germany and traces them back to the theological foundations of those religions, which shape managers' values. We find that Catholic nonprofit hospitals follow a strategy of horizontal diversification and maximization of the number of patients treated. By contrast, Protestant hospitals pursue a strategy of horizontal specialization and focus on vertical differentiation, putting in more sophisticated inputs and producing more complex services. The results are consistent with the predictions of our model, which supports the differences between Catholic and Protestant values identified in the literature.

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2013-052.

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Date of creation: 2013
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Handle: RePEc:dgr:kubcen:2013052

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Web page: http://center.uvt.nl

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Keywords: religious values; managers' values; nonprofits; religious organizations; Catholicism and Protestantism;

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  1. Paul Gertler & Jennifer Kuan, 2009. "Does It Matter Who Your Buyer Is? The Role of Nonprofit Mission in the Market for Corporate Control of Hospitals," Journal of Law and Economics, University of Chicago Press, vol. 52(2), pages 295-306, 05.
  2. Ellis, Randall P., 1998. "Creaming, skimping and dumping: provider competition on the intensive and extensive margins1," Journal of Health Economics, Elsevier, vol. 17(5), pages 537-555, October.
  3. Karen Eggleston & Yu-Chu Shen & Joseph Lau & Christopher H. Schmid & Jia Chan, 2008. "Hospital ownership and quality of care: what explains the different results in the literature?," Health Economics, John Wiley & Sons, Ltd., vol. 17(12), pages 1345-1362.
  4. Sascha O. Becker & Ludger Woessmann, 2009. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," The Quarterly Journal of Economics, MIT Press, vol. 124(2), pages 531-596, May.
  5. Tim Besley & Maitreesh Ghatak, 2005. "Competition and incentives with motivated agents," LSE Research Online Documents on Economics 928, London School of Economics and Political Science, LSE Library.
  6. Prüfer, J., 2007. "Competition and Mergers among Nonprofits," Discussion Paper 2007-82, Tilburg University, Center for Economic Research.
  7. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-48, June.
  8. Jill R. Horwitz & Austin Nichols, 2007. "What Do Nonprofits Maximize? Nonprofit Hospital Service Provision and Market Ownership Mix," NBER Working Papers 13246, National Bureau of Economic Research, Inc.
  9. Bruce Sacerdote & Edward L. Glaeser, 2001. "Education and Religion," NBER Working Papers 8080, National Bureau of Economic Research, Inc.
  10. Anup Malani & Tomas Philipson & Guy David, 2003. "Theories of Firm Behavior in the Nonprofit Sector. A Synthesis and Empirical Evaluation," NBER Chapters, in: The Governance of Not-for-Profit Organizations, pages 181-216 National Bureau of Economic Research, Inc.
  11. Patrick Francois, 2002. "Not-for-profit Provision of Public Services," The Centre for Market and Public Organisation 02/060, Department of Economics, University of Bristol, UK.
  12. Patrick Francois & Michael Vlassopoulos, 2008. "Pro-social Motivation and the Delivery of Social Services," CESifo Economic Studies, CESifo, vol. 54(1), pages 22-54, March.
  13. Sloan, Frank A., 2000. "Not-for-profit ownership and hospital behavior," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 21, pages 1141-1174 Elsevier.
  14. Glaeser, Edward L & Glendon, Spencer, 1998. "Incentives, Predestination and Free Will," Economic Inquiry, Western Economic Association International, vol. 36(3), pages 429-43, July.
  15. Adam D. Rennhoff & Mark F. Owens, 2010. "Competition and the Strategic Choices of Churches," Working Papers 201011, Middle Tennessee State University, Department of Economics and Finance.
  16. Herbst, P. & Prüfer, J., 2007. "Firms, Nonprofits, and Cooperatives: A Theory of Organizational Choice," Discussion Paper 2007-003, Tilburg University, Tilburg Law and Economic Center.
  17. Editors, 2003. "Editor's Introduction," American Journal of Economics and Sociology, Wiley Blackwell, vol. 62(2), pages 315-318, 04.
  18. Filistrucchi, L. & Ozbugday, F.C., 2012. "Mandatory Quality Disclosure and Quality Supply: Evidence from German Hospitals," Discussion Paper 2012-031, Tilburg University, Tilburg Law and Economic Center.
  19. Henry Hansmann & Daniel Kessler & Mark B. McClellan, 2003. "Ownership Form and Trapped Capital in the Hospital Industry," NBER Chapters, in: The Governance of Not-for-Profit Organizations, pages 45-70 National Bureau of Economic Research, Inc.
  20. Editors, 2003. "Editor's Introduction," American Journal of Economics and Sociology, Wiley Blackwell, vol. 62(4), pages 645-648, October.
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