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Agency problems and unrelated business income of non-profit organizations: an empirical analysis

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  • C. Du Bois
  • R. Caers
  • M. Jegers
  • C. Schepers
  • S. De Gieter
  • R. Pepermans

Abstract

Nonprofit organizations are traditionally assumed to dislike commercial activities. In the USA, they are however allowed to engage in commercial activities, but the income they derive from these activities is then subject to the so-called 'unrelated business income tax'. If NPOs do indeed dislike commercial income, then why do they engage in these activities? Using a data set of 2103 US NPOs, this study suggests that the presence of agency problems inside the organization can at least provide an explanation for the occurrence of 'unrelated business income'.

Suggested Citation

  • C. Du Bois & R. Caers & M. Jegers & C. Schepers & S. De Gieter & R. Pepermans, 2004. "Agency problems and unrelated business income of non-profit organizations: an empirical analysis," Applied Economics, Taylor & Francis Journals, vol. 36(20), pages 2317-2326.
    • Handle: RePEc:taf:applec:v:36:y:2004:i:20:p:2317-2326
    DOI: 10.1080/0003684042000281552
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    References listed on IDEAS

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    Cited by:

    1. Gregory E. Goering, 2007. "The strategic use of managerial incentives in a non-profit firm mixed duopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 83-91.
    2. Goering, Gregory E., 2008. "Welfare impacts of a non-profit firm in mixed commercial markets," Economic Systems, Elsevier, vol. 32(4), pages 326-334, December.
    3. Christoph Starke, 2010. "Serving the Many or Serving the Most Needy?," FEMM Working Papers 100002, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    4. Kopel, Michael & Brand, Björn, 2012. "Socially responsible firms and endogenous choice of strategic incentives," Economic Modelling, Elsevier, vol. 29(3), pages 982-989.
    5. Christoph Starke, 2012. "Serving the many or serving the most needy?," Economics of Governance, Springer, vol. 13(4), pages 365-386, December.

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