IDEAS home Printed from https://ideas.repec.org/a/taf/ijecbs/v1y1994i1p77-93.html
   My bibliography  Save this article

Firm Growth and Failure in Increasingly Competitive Markets Theory and Application to Hospital Markets

Author

Listed:
  • Lee Rivers Mobley
  • H. E. Frech

Abstract

Recent models of firm failure and growth have ignored demand factors. In this paper, we generalize these theoretical analyses to include demand factors in explaining failure and growth for heterogeneous firms in local markets facing imperfect but increasing competition. The model is then applied empirically to the hospital industry in California over the 1980s, during which time competition did intensify. We model the closure decision based on expectations of future growth, explicitly accounting for self selection and simultaneity. We find that both size and demand factors are important determinants of survival and growth

Suggested Citation

  • Lee Rivers Mobley & H. E. Frech, 1994. "Firm Growth and Failure in Increasingly Competitive Markets Theory and Application to Hospital Markets," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 1(1), pages 77-93.
    • Handle: RePEc:taf:ijecbs:v:1:y:1994:i:1:p:77-93
    DOI: 10.1080/758540500
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/10.1080/758540500
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/758540500?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lynk, William J., 1995. "The creation of economic efficiencies in hospital mergers," Journal of Health Economics, Elsevier, vol. 14(5), pages 507-530, December.
    2. Capps, Cory & Dranove, David & Lindrooth, Richard C., 2010. "Hospital closure and economic efficiency," Journal of Health Economics, Elsevier, vol. 29(1), pages 87-109, January.
    3. Frech, Ted E, 1998. "Managed Care, Distance Traveled, and Hospital Market Definition," University of California at Santa Barbara, Economics Working Paper Series qt84x5q49q, Department of Economics, UC Santa Barbara.
    4. Lee Rivers Mobley, 1996. "Tacit collusion among hospitals in price competitive markets," Health Economics, John Wiley & Sons, Ltd., vol. 5(3), pages 183-193, May.
    5. Lindrooth, Richard C. & Lo Sasso, Anthony T. & Bazzoli, Gloria J., 2003. "The effect of urban hospital closure on markets," Journal of Health Economics, Elsevier, vol. 22(5), pages 691-712, September.
    6. Mobley, Lee R., 2003. "Estimating hospital market pricing: an equilibrium approach using spatial econometrics," Regional Science and Urban Economics, Elsevier, vol. 33(4), pages 489-516, July.
    7. Lee Mobley & W. David Bradford, 1997. "Behavioural differences among hospitals: it is ownership, or location?," Applied Economics, Taylor & Francis Journals, vol. 29(9), pages 1125-1138.
    8. Rexford E. Santerre & Debra Pepper, 2000. "Survivorship in the US hospital services industry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(5), pages 181-189.

    More about this item

    Keywords

    Closure; Growth; Survivor analysis; Hospitals; Scale economies; Competition; I11; L11; L31; L44; L84; O24;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

    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:taf:ijecbs:v:1:y:1994:i:1:p:77-93. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CIJB20 .

    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.