Institutional Drivers of Reporting Decisions in Nonprofit Hospitals

Journal of Accounting Research, Forthcoming

55 Pages Posted: 13 Jun 2008 Last revised: 28 Jan 2011

Ranjani Krishnan

Michigan State University - Department of Accounting & Information Systems

Michelle Yetman

University of California, Davis - Graduate School of Management

Date Written: January 26, 2011

Abstract

We examine the influence of normative and regulative institutional factors on cost shifting by nonprofit hospitals in their publicly reported statements. We explore whether normative constraints imposed by stakeholders, who prefer that nonprofit hospitals allocate their resources toward patient-related program services, influence the extent to which nonprofit hospitals shift costs towards program services and away from administrative and fundraising categories, thereby appearing more efficient. We also explore whether regulative factors, such as oversight, influence cost shifting behaviors. Results indicate that nonprofit hospitals facing higher normative pressures to demonstrate efficiency shift costs to a greater extent, and hospitals facing higher regulatory oversight shift costs to a lesser extent. Consistent with prior research, we also find that hospitals that obtain higher donations revenue shift costs to a greater extent. Our results show that, in addition to economic factors documented by prior literature, institutional factors also influence nonprofit hospitals’ cost shifting behaviors.

Keywords: Hospitals, cost shifting, institutional theory

JEL Classification: M41, M43, M48, L31

Suggested Citation

Krishnan, Ranjani and Yetman, Michelle, Institutional Drivers of Reporting Decisions in Nonprofit Hospitals (January 26, 2011). Journal of Accounting Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1144314

Ranjani Krishnan

Michigan State University - Department of Accounting & Information Systems ( email )

270 North Business Complex
East Lansing, MI 48824-1034
United States
517-353-4687 (Phone)
517-432-1101 (Fax)

Michelle Yetman (Contact Author)

University of California, Davis - Graduate School of Management ( email )

128 AOB IV
One Shields Avenue
Davis, CA 95616
United States
530-754-7808 (Phone)
530-752-2924 (Fax)

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