The impact of firm-specific assets and the interaction of uncertainty: an examination of make or buy decisions in public and private hospitals

Coles, Jerilyn W.; Hesterly, William S.

doi:10.1016/s0167-2681(98)00102-4

Cited by 76 publications

(56 citation statements)

References 9 publications

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“…First, nonprofit and for-profit responses to physician-intensity and labor-intensity are distinct. Note how this contrast differs from a comparative static exercise of comparing outsourcing rates across services within an ownership types, as Coles andHesterly (1998), Lopez de Silanes et al (1997), or Levin and Tadelis (2010) do. We can say not only that nonprofits respond to physician-and laborintensity, but also that they respond for reasons distinct from profit motivation.…”

Section: Prediction 2: Outsourcing and Bias-intensive Servicesmentioning

confidence: 98%

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Cost versus control: Understanding ownership through outsourcing in hospitals

Dalton

Warren

2016

Journal of Health Economics

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For-profit hospitals in California contract out services much more intensely than either private nonprofit or public hospitals. To explain why, we build a model in which the outsourcing decision is a trade-off between net revenues and some non-monetary benefit to the manager, or "bias" in the manner of production. Since nonprofit firms must consume profits under restrictions, they trade off bias and income differently than forprofit firms. This difference is exaggerated in services where the benefits of controlling the details of production are particularly important but minimized when firms are hit with a fixed-cost shock. We test these predictions in a panel of California hospitals, finding evidence for each. These results suggest that a model of public or nonprofit make-or-buy decisions should be more than a simple relabeling of a model derived in the for-profit context. JEL Classification: I11, L24, L33

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Section: Prediction 2: Outsourcing and Bias-intensive Servicesmentioning

confidence: 98%

“…A handful of papers have taken advantage of this diversity. Coles and Hesterly (1998) touch on nonprofit and for-profit differences, but focus on how transaction costs influence which hospital services are outsourced. Balakrishnan et al (2010) describe outsourcing differentials at the level of the hospital.…”

Section: Introductionmentioning

confidence: 99%

Cost versus control: Understanding ownership through outsourcing in hospitals

Dalton

Warren

2016

Journal of Health Economics

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“…Empirical evidence that supports this proposition can be found in Anderson (1985), Coles and Hesterly (1998), Leiblein and Miller (2003), Leiblein, Reuer, and Dalsace (2002), Villalonga and McGahan (2005), and Walker and Weber (1987).…”

Section: Agency Costsmentioning

confidence: 81%

Testing Organizational Economics Theories of Vertical Integration

Lajili¹,

Madunic²,

Mahoney³

Research Methodology in Strategy and Management

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This article classifies empirical research on vertical integration under four approaches -value-added-to-sales, qualitative-quantitative, input-output, and microanalytic. The emphasis here is on the microanalytic approach which has accumulated the most systematic evidence to support its theoretical propositions. In particular, this article emphasizes theoretical and empirical contributions from organizational economics (especially transaction costs and agency theories) for both vertical integration and (vertical) contracting. Limitations and methodological challenges concerning the empirical testing of theories of vertical integration are addressed and suggestions for further research are provided.

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“…Hence, unpredictability per se does not favour vertical integration, and only does so in conjunction with asset specificity (Williamson 1979(Williamson , 1985. This interaction effect between unpredictability and asset specificity has been identified by Anderson (1985), Coles and Hesterly (1998), Leiblein and Miller (2003) and Díez-Vial (2007). The following hypothesis can therefore be proposed:…”

Section: H2mentioning

confidence: 92%

“…Following Coles and Hesterly (1998), this condition was operationalized by means of an interaction between a dummy variable (λ) and environmental uncertainty. This dummy variable takes a value of 1 if the value of all specificity items is above 1 (the minimal value on the scale), and 0 for values of 1.…”

Section: Environmental Uncertainty (H3)mentioning

confidence: 99%

Product Differentiation Strategy and Vertical Integration: An Application to the Doc Rioja Wine Industry

Olmos

Dejo‐Oricain

Martínez

2016

Journal of Business Economics and Management

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Abstract. This study evaluates the importance of product differentiation as a determinant of vertical integration in firms. The proposed model also controls for known determinants of integration, such as transaction costs and firm-level capabilities. By identifying transaction-, firm-and strategy-level determinants, we derive testable predictions about the vertical integration decision. To test these predictions we analyze the Rioja wine industry, using a representative sample of 187 firms. Our paper concludes that reaching judicious vertical integration decisions requires a thorough analysis of some very diverse aspects, especially those related to mitigating opportunism, dealing with unforeseen contingencies and product differentiation.

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The impact of firm-specific assets and the interaction of uncertainty: an examination of make or buy decisions in public and private hospitals

Cited by 76 publications

References 9 publications

Cost versus control: Understanding ownership through outsourcing in hospitals

Cost versus control: Understanding ownership through outsourcing in hospitals

Testing Organizational Economics Theories of Vertical Integration

Product Differentiation Strategy and Vertical Integration: An Application to the Doc Rioja Wine Industry

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