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Article
Intermediate input sharing in the hospital service industry
Regional Science and Urban Economics
  • Jing LI, Singapore Management University
Publication Type
Journal Article
Publication Date
12-2013
Abstract

This paper addresses two related questions that help to explain geographic variation in access to medical services. The first question examines the existence of agglomeration economies in the hospital service industry. The second considers whether the sharing of intermediate inputs contributes to spillovers from spatial concentration of hospital services. These questions are addressed by estimating a bivariate probit model that explicitly controls for potential correlations between whether a service is provided and how the service is provided. Three key findings are obtained. First, hospitals in more concentrated areas are more likely to outsource intermediate services to specialized intermediate service suppliers. This suggests that agglomeration economies exist in the hospital service industry and are generated in part through the sharing of intermediate inputs. Second, the presence of nearby small hospitals increases the tendency to outsource, which is consistent with a “Chinitz” effect identified elsewhere in the literature. Third, the agglomeration effect attenuates geographically.

Keywords
  • Agglomeration,
  • Health care,
  • Input sharing,
  • Outsourcing
Discipline
Identifier
10.1016/j.regsciurbeco.2013.09.004
Creative Commons License
Creative Commons Attribution-Noncommercial-No Derivative Works 4.0
Citation Information
Jing LI. "Intermediate input sharing in the hospital service industry" Regional Science and Urban Economics Vol. 43 Iss. 6 (2013) p. 888 - 902 ISSN: 0166-0462
Available at: http://works.bepress.com/jing_li/3/