Taxes, bankruptcy costs, and capital structure in for-profit and not-for-profit hospitals.
Health Serv Manage Res
; 31(1): 21-32, 2018 02.
Article
em En
| MEDLINE
| ID: mdl-28876139
ABSTRACT
About 60% of the US hospitals are not-for-profit and it is not clear how traditional theories of capital structure should be adapted to understand the borrowing behavior of not-for-profit hospitals. This paper identifies important determinants of capital structure taken from theories describing for-profit firms as well as prior literature on not-for-profit hospitals. We examine the differential effects these factors have on the capital structure of for-profit and not-for-profit hospitals. Specifically, we use a difference-in-differences regression framework to study how differences in leverage between for-profit and not-for-profit hospitals change in response to key explanatory variables (i.e. tax rates and bankruptcy costs). The sample in this study includes most US short-term general acute hospitals from 2000 to 2012. We find that personal and corporate income taxes and bankruptcy costs have significant and distinct effects on the capital structure of for-profit and not-for-profit hospitals. Specifically, relative to not-for-profit hospitals (1) higher corporate income tax encourages for-profit hospitals to increase their debt usage; (2) higher personal income tax discourages for-profit hospitals to use debt; and (3) higher expected bankruptcy costs lead for-profit hospitals to use less debt. Over the past decade, the capital structure of for-profit hospitals has been more flexible as compared to that of not-for-profit hospitals. This may suggest that not-for-profit hospitals are more constrained by external financing resources. Particularly, our analysis suggests that not-for-profit hospitals operating in states with high corporate taxes but low personal income taxes may face particular challenges of borrowing funds relative to their for-profit competitors.
Palavras-chave
Texto completo:
1
Coleções:
01-internacional
Base de dados:
MEDLINE
Assunto principal:
Impostos
/
Falência da Empresa
/
Hospitais com Fins Lucrativos
/
Hospitais Filantrópicos
/
Administração Financeira de Hospitais
Tipo de estudo:
Health_economic_evaluation
/
Prognostic_studies
Limite:
Humans
País/Região como assunto:
America do norte
Idioma:
En
Ano de publicação:
2018
Tipo de documento:
Article