This study uses a hospital setting to explore incentives and performance in organizations that are subsidized by taxes and governed by elected boards of directors. This governance system introduces incentives to over-monitor CEO performance, constraining administrative decision-making and...

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>Drawing on transaction cost economics and institutional theory we argue that the effects of institutional constraints on the transaction costs of outsourcing vary systematically with the type of service outsourced and the ownership structure of the outsourcing firm. Using data from...

For the past few decades, transfer prices have been a major source of conflict between governments and multinational firms. During the late 1980s and early 1990s, many countries established regulations aimed at limiting firms' abilities to avoid taxes through transfer pricing policies that move...

This paper tests whether cost allocations are manipulated in response to cost-plus reimbursement. After 1983, Medicare started reimbursing hospitals for inpatient services on the basis of rates set prospectively, but continued to reimburse outpatient services based on cost. Using data from...

This paper studies the governance of a sample of California hospitals. We document a number of empirical relations about hospital governance: The composition of the board of directors varies systematically across ownership types; poor performance and high administrative costs increase board...

This paper studies the governance of a sample of California hospitals. We find a number of empirical relations about hospital governance: The composition of the board of directors varies systematically across ownership types; poor performance and high administrative costs increase board...

Variable costs need not be incurred unless a firm wants to produce goods or services; the opportunity to incur variable costs is therefore a real (European) option (McDonald and Siegel 1985). Moreover, fixed investments can usually be postponed; the ability to wait before investing is also a real...