Debt and bargaining outcomes: Evidence from U.S. Hospitals

Research output: Contribution to journalArticlepeer-review

4 Scopus citations


Using the healthcare industry as a novel laboratory, I study whether a firm's use of debt enhances its bargaining power during negotiations with nonfinancial stakeholders. I find that reimbursement rates negotiated between a hospital and insurers for two homogeneous procedures are higher when the hospital has more debt. This relation is stronger among hospitals with less bargaining power relative to insurers ex ante. The evidence is consistent with the idea that debt improves a firm's bargaining power.

Original languageEnglish (US)
Pages (from-to)2083-2098
Number of pages16
JournalManagement Science
Issue number5
StatePublished - May 2020
Externally publishedYes


  • Bargaining
  • Capital structure
  • Debt
  • Healthcare
  • Leverage

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research


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