Entry, Donor Market Size, and Competitive Conduct Among Nonprofit Firms

36 Pages Posted: 8 Dec 2016

See all articles by Philip Garland Gayle

Philip Garland Gayle

Kansas State University - Department of Economics

Teresa D. Harrison

Drexel University - Department of Economics & International Business

Jeremy P. Thornton

Samford University - Brock School of Business

Date Written: October 19, 2016

Abstract

This paper empirically characterizes competitive behavior among charitable nonprofits where prices and output are difficult to observe. Using a model tailored to donative nonprofits and an empirical methodology that exploits cross-sectional variation in market size and various measurable demographic and cost characteristics applicable for nonprofits, this paper estimates the threshold number of potential donors required for nonprofit economic viability in five major charitable sectors. We find that our sample markets generally reach competitive levels once five or more nonprofits in a given nonprofit sector are observed. The paper offers several possible interpretations of these findings and directions for future research.

Keywords: Nonprofit, Entry, Competition

Suggested Citation

Gayle, Philip Garland and Harrison, Teresa D. and Thornton, Jeremy P., Entry, Donor Market Size, and Competitive Conduct Among Nonprofit Firms (October 19, 2016). International Journal of Industrial Organization, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2882205

Philip Garland Gayle

Kansas State University - Department of Economics ( email )

Manhattan, KS 66502-4001
United States

Teresa D. Harrison

Drexel University - Department of Economics & International Business ( email )

3141 Chestnut St.
Philadelphia, PA 19104
United States

Jeremy P. Thornton (Contact Author)

Samford University - Brock School of Business ( email )

800 Lakeshore Drive
Birmingham, AL 35229
United States
2057262128 (Phone)

HOME PAGE: http://https://www.samford.edu/business/directory/Thornton-Jeremy

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