IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/34132.html

Control Without Ownership: Governance of Nonprofit Hospitals

Author

Listed:
  • Katharina Lewellen
  • Gordon M. Phillips
  • Giorgo Sertsios

Abstract

We analyze the governance of nonprofit hospitals, focusing on the external mechanism through the market for corporate control. Relative to for-profits, nonprofit boards are larger, have more employee directors, less industry expertise, and weaker incentives; CEO pay and turnover are less responsive to performance. Nonprofit takeovers are followed by insiders’ departures. However, nonprofits with poor financial performance are half as likely as for-profits to be acquired, and nonfinancial performance is unrelated to acquisitions. Oversight strength explains a substantial share of the takeover gap. While nonprofits may deliver stakeholder benefits, our evidence points to limits to governance as an associated cost.

Suggested Citation

  • Katharina Lewellen & Gordon M. Phillips & Giorgo Sertsios, 2025. "Control Without Ownership: Governance of Nonprofit Hospitals," NBER Working Papers 34132, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34132
    Note: CF IO
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w34132.pdf
    Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:34132. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.