Corporate Ownership and Firm Performance: Evidence from Fertility Clinics

90 Pages Posted: 17 May 2023

See all articles by Ambar La Forgia

Ambar La Forgia

Haas School of Business, UC Berkeley

Julia Bodner

Copenhagen Business School

Date Written: April 24, 2023

Abstract

Corporate investors are often credited with boosting target firm performance but criticized for prioritizing profits over consumer well-being. This tension is particularly evident in the healthcare sector, where information frictions contribute to underinvestment in quality. This paper finds that corporate ownership can improve healthcare outcomes in a setting where patients have access to service pricing and quality information – the market for In Vitro Fertilization (IVF). After acquisition by a fertility chain, clinic volume increases by 28.2%, and IVF success rates increase by 13.6%. Fertility chains also implement changes that enhance quality, benefit underperforming clinics, and expand the IVF market.

Note:
Funding Information: None.

Conflict of Interests: No competing interests.

Keywords: Corporate Ownership, Private Equity, Clinic Acquisitions, Healthcare Chains, Fertility, IVF

JEL Classification: G3, G34, I1, I11, L2, L20

Suggested Citation

La Forgia, Ambar and Bodner, Julia, Corporate Ownership and Firm Performance: Evidence from Fertility Clinics (April 24, 2023). Available at SSRN: https://ssrn.com/abstract=4428107 or http://dx.doi.org/10.2139/ssrn.4428107

Ambar La Forgia (Contact Author)

Haas School of Business, UC Berkeley ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

Julia Bodner

Copenhagen Business School ( email )

Kilen
Frederiksberg, 2000
Denmark

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