This paper examines the investment decisions of not-for-profit hospitals. More than 20% of U.S. firms are not-for-profit, yet this organizational form has received little attention in corporate finance. This paper takes a step towards closing this gap. Our goal is to examine the role of...

Financial constraints can cause firms to reduce product quality when quality is difficult to observe. We test this hypothesis in the context of medical choices at hospitals. Using heart attacks and child deliveries, we ask whether hospitals shift towards more profitable treatment options after a...