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Research Abstracts Online
January 2009 - March 2010

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University of Minnesota Twin Cities
College of Liberal Arts
Department of Economics

PI: Minjung Park

Incentive to Merge: Estimates From a Matching Model of Hospital Mergers

This research examines the merger incentives of hospitals in the U.S. In particular, it investigates whether hospitals with different ownership types show different behaviors in their merger participation decisions and their choice of merger partners. The researchers model hospital mergers using a matching framework and estimate hospitals’ merger objective functions using the matching score estimator proposed by Fox (2009). The results suggest that for-profit hospitals’ merger behaviors are more strongly influenced by economic motivations, while not-for-profit hospitals’ merger behaviors are influenced by non-market considerations as well.

Group Member

Hyunchul Kim, Graduate Student