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Research Abstracts Online
January 2010 - March 2011

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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 examined the merger incentives of hospitals in the U.S. In particular, it investigated whether hospitals with different ownership types show different behaviors in their merger participation decisions and their choice of merger partners. The researchers modeled hospital mergers using a matching framework and estimate hospitals’ merger objective functions using the matching score estimator proposed by Fox (2009). The results suggested 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