Essays on Stakeholder Welfare & Equality

Abstract

There is a growing interest among scholars and the public in understanding how firms impact the well-being of their stakeholders, especially customers and employees. The three chapters of my dissertation tackle this topic in various settings.

Chapter 1 looks at the association between hospital management practices and patient health outcomes across a representative large-scale sample of U.S. hospitals. It is one of the first papers to analyze the results of the Census-conducted Management and Organizational Practices Survey for hospitals. In multivariate adjusted analyses, hospitals adopting more structured management practices were associated with overall higher quality of care, including lower mortality (-1.3%, p=0.01) and lower readmissions (-1.2%, p=0.03) for acute myocardial infarction, and higher patient satisfaction (+13.4%, p=0.02). Hospitals adopting structured management practices were also associated with better financial performance, including higher profit margins (+1.3%, p=0.02). This suggests that improving the adoption of structured management practices in hospitals may be a critical element in translating national quality goals into improved value of care for patients and hospitals.

Chapter 2 looks at the impact of a food delivery platform on the welfare of gig workers. Gig work provides worktime flexibility and a sense of being one’s own boss, but comes without certain protections that employees enjoy. Thus, my co-author and I study the work patterns of a large sample of drivers in the food delivery business to better understand the value of worktime flexibility. Our results indicate that the vast majority of drivers place significant value on flexibility. We then use our estimates to study how flexibility concerns, earnings considerations, and worker welfare influence the regulation of gig work. Our context is Proposition 22, a recent California ballot initiative that protects gig workers’ worktime flexibility and provides an earnings guarantee. We find that counties where drivers drove longer hours were more likely to vote against Proposition 22, suggesting that voters seek to protect drivers who behave more like employees. However, we do not find that voters take the value of flexibility or the value of the earnings guarantee into account. Instead, the largest predictor of support for Proposition 22 is the share of registered Republicans in the county. These results suggest that voters do not have a holistic understanding of how Proposition 22 affects drivers in their county, so they mainly consider political ideology when making voting decisions.

Chapter 3 examines whether firms are pressured to ”walk the talk” of gender equality after they make public statements on the topic. I use a difference-in-differences approach to see if firms follow through on their statements in situations where they are likely to be accused of hypocrisy by monitors. To do this, I use #MeToo as a shock to the likelihood of these accusations and use firms’ gender-related tweets on Twitter as a measure of their statements. I find that, compared to firms who did not ”gender tweet” in the three years before #MeToo, firms who gender-tweeted add 32% more female board members in the four years after #MeToo. This change is larger for firms for whom hypocrisy accusations pose a bigger threat. However, I find no such effect for female senior managers. I speculate that this difference is due to the fact that adding female senior managers is more costly and less expected of firms than adding female board members. These results underscore the importance of monitoring to prevent firms from woke-washing, and suggests that efforts should be taken to make desired actions (such as hiring female senior managers) more feasible for firms.