We thank Philip Berger (the editor), an anonymous reviewer, and workshop participants at Boston University, Georgia State University, Harvard University, University of Wisconsin at Madison, the 2009 Government and Nonprofit Section Annual meeting, and the 2009 AAA Annual meeting for their comments.
Institutional Drivers of Reporting Decisions in Nonprofit Hospitals
Article first published online: 7 MAR 2011
©, University of Chicago on behalf of the Accounting Research Center, 2011
Journal of Accounting Research
Volume 49, Issue 4, pages 1001–1039, September 2011
How to Cite
KRISHNAN, R. and YETMAN, M. H. (2011), Institutional Drivers of Reporting Decisions in Nonprofit Hospitals. Journal of Accounting Research, 49: 1001–1039. doi: 10.1111/j.1475-679X.2011.00413.x
- Issue published online: 18 JUL 2011
- Article first published online: 7 MAR 2011
- Accepted manuscript online: 14 FEB 2011 07:22PM EST
- Received 19 March 2010; accepted 12 January 2011
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 toward 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.