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Faithful Strategies: How Religion Shapes Nonprofit Management

  • Lapo Filistrucchi

    ()

    (Dipartimento di Scienza per l'Economia e l'Impresa)

  • Jens Prufer

    ()

    (Tilburg University)

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. These effects increase if the environment of a hospital gets more competitive. 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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Paper provided by Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa in its series Working Papers - Economics with number wp2014_01.rdf.

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Length: 51 pages
Date of creation: 2014
Date of revision:
Handle: RePEc:frz:wpaper:wp2014_01.rdf
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  1. 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.
  2. Becker, Sascha O. & Wößmann, Ludger, 2007. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," Discussion Papers in Economics 1366, University of Munich, Department of Economics.
  3. Edward L. Glaeser, 2003. "Introduction to "The Governance of Not-for-Profit Organizations"," NBER Chapters, in: The Governance of Not-for-Profit Organizations, pages 1-44 National Bureau of Economic Research, Inc.
  4. Adam D. Rennhoff & Mark F. Owens, 2012. "Competition and the Strategic Choices of Churches," American Economic Journal: Microeconomics, American Economic Association, vol. 4(3), pages 152-70, August.
  5. Edward L. Glaeser, 2003. "The Governance of Not-for-Profit Organizations," NBER Books, National Bureau of Economic Research, Inc, number glae03-1, June.
  6. 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.
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  11. 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.
  12. Editors, 2003. "Editor's Introduction," American Journal of Economics and Sociology, Wiley Blackwell, vol. 62(4), pages 645-648, October.
  13. 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.
  14. Editors, 2003. "Editor's Introduction," American Journal of Economics and Sociology, Wiley Blackwell, vol. 62(2), pages 315-318, 04.
  15. 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.
  16. van Hoorn, André & Maseland, Robbert, 2013. "Does a Protestant work ethic exist? Evidence from the well-being effect of unemployment," Journal of Economic Behavior & Organization, Elsevier, vol. 91(C), pages 1-12.
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