Entrepreneurship and Subjective vs. Objective Institutional Performance: A Decade of US Hospital Data Shelby Renee Meek and Matthias A. Tietz
Research Policy, Vol. 51, No. 9 (November 2022), 104652
OVERVIEW
Regional entrepreneurial activity can strongly affect the performance of local public service institutions. However, the literature explaining these relationships suffers from five methodological problems: (1) inferred direction of influence; (2) blurring of objective and subjective performance; and lack of (3) representative; (4) longitudinal; and (5) fine-grained regional data. Our empirical approach applies econometric, mixed-effects regression models merging two sources of entrepreneurial activity at the county level with a rich longitudinal dataset representing the ubiquitous institution of hospitals; specifically, the entire hospital population in over 3,000 US counties between 2006 and 2018. We discriminate objective from subjective institutional performance, with striking results: regional entrepreneurial activity positively affects objective institutional performance and negatively affects subjective performance, although the hospital's research designation attenuates the latter. These findings, suggesting that institutional performance is a byproduct of regional entrepreneurial activity, have significant theoretical and policy implications.
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