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Financial Effects of Remote Product Delivery: Evidence from Hospitals

Author

Listed:
  • Kimberly Cornaggia
  • Xuelin Li
  • Zihan Ye

Abstract

We study financial effects of remote product delivery in the healthcare industry. Exploiting staggered law adoption for identification, we find that telehealth provision redistributes hospital operations and access to capital away from rural communities. As urban telehealth providers acquire rural patients, rural hospitals experience decreased revenue and profit, credit rating downgrades, increased cost of capital, and ultimately risk of closure. Although telehealth reduces travel costs, some communities lose access to acute care. Overall, we conclude that remote healthcare services have financial consequences as well as real effects, and their benefits are unequally distributed.

Suggested Citation

  • Kimberly Cornaggia & Xuelin Li & Zihan Ye, 2024. "Financial Effects of Remote Product Delivery: Evidence from Hospitals," The Review of Financial Studies, Society for Financial Studies, vol. 37(9), pages 2817-2854.
    • Handle: RePEc:oup:rfinst:v:37:y:2024:i:9:p:2817-2854.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhae024
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    More about this item

    Keywords

    G12; H74; H75; I11; L31;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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