5.5.1 Different hospital sizes
In this part of the thesis the additional regression models are shown. The additional regression models are about testing the hypotheses on another level. The 3 different sizes of hospitals will be individually investigated on the influence of governance quality on the financial performance. All the financial ratios will be tested individually as independent variables. The solvency, current, margin of profit, DSCR and the profitability will all be tested on whether or not any governance variable has influence on these individual financial performance ratios. At first, the different sizes of hospitals could play a role in the outcomes of the regressions which were taken in the last part (5.4). The regression analysis regarding the different hospital sizes are shown in the table below.
Table 10 Regression different hospital sizes
Model
* Correlation is significant at the 10% level
** Correlation is significant at the 5% level
In the table above it is clear that there are more significant results compared to the regression made with all the sizes in one dataset. In the dataset regarding to the big hospitals there are no significant effects of the governance variables related to the total financial performance. In the dataset of medium and small hospitals there are significant results. For small hospitals there is one correlation which is significant at a 10% level. This is the effect of the number of meetings of the supervisory board on the financial performances. The Standardized Coefficients Beta of this variable is 0,451.
Within small hospitals, the number of meetings have a positive significant effect. In hypothesis 3 it was expected that a greater number of meetings would have a negative influence on the financial performance. For small hospitals it is the other way round.
For the medium size hospitals there are 2 correlations which are significant at a 5% level. This is the evaluations of the supervisory board and also about the number of meetings of the board. The Standardized Coefficients Beta of the evaluations variable is 0,681. So the existence of board evaluations in medium size hospitals has a significant positive effect on the total financial performance. The Standardized Coefficients Beta of the meetings variable is -0,683. The number of meetings during one year has a significant negative effect on the total financial performances.
These effects were expected in hypothesis 3 and 4.
The research to the sizes of hospitals has led to three significant effects regarding the governance variables. In big hospitals there are no significant effects and in medium size hospitals are the most significant effects of governance variables. In the big hospitals it appears to be that the supervisory board has less influence on the financial performance and in the medium size hospitals it appears to be that the supervisory has the most influence on financial performance.
All the outcomes and significant results above, could be interpreted too firm. However these findings are not very hard so further research should still be done on this subject. In the restrictions and possibilities for further research chapter of this thesis I will come back to this subject.
5.5.2 Individual financial performance
In this section of the additional regressions the individual financial performance ratios will be investigated. Whether or not the governance variables have a significant influence on the individual financial performance ratios. The individual performance ratios are: solvency ratio, current ratio, margin of profit, debt service coverage ratio and profitability ratio. The analysis focusses on the complete dataset and on the individual sizes of hospitals. There are no significant effects of the governance variables related to the current ratio, the debt service coverage ratio and the margin of profit ratio. However for the solvency ratio and the profitability ratio there are significant effects
of the governance variables. The other regression analyses without significant effects is shown in
a. Dependent Variable: Solvency
(Constant) -0,014 0,013 -1,109 0,272
Board_nrof
members 0,004 0,002 0,272 2,132 ,037**
a. Dependent Variable: Profitability
* Correlation is significant at the 10% level
** Correlation is significant at the 5% level
The regression analysis give a clear significant effect of the number of board members in relation to the ratios of solvency and profitability. These significant effects are both positive. The Standardized Coefficients Beta for solvency is 0,241 and for profitability 0,272. That means the higher the number of members in a supervisory board is, has a positive influence on the solvency and profitability ratio. This is not what was expected beforehand in hypothesis 3. The expectation was a negative influence of a higher number of board members on the financial performance.
In this additional regression analysis the small, medium and big hospitals are analyzed individually related to the financial performance ratios individually. The significant results are presented below.
The letter “A” under all tables are giving the different titles. The first two are the margin of profit and the profitability ratio in big hospitals. The third is the current ratio in medium sized hospitals.
The last two are the profitability and DSCR ratio in small hospitals.
Table 12 additional regression individual ratios/different sizes Coefficientsa
a. Dependent Variable: Margin of profit (big hospitals)
1 (Constant) ,062 ,029 2,131 ,049
Board commitees ,003 ,005 ,132 ,663 ,517
Evaluations ,010 ,015 ,136 ,705 ,491
Nr of meetings -,006 ,002 -,635 -3,240 ,005**
Nr. of members -,003 ,003 -,226 -1,119 ,280
a. Dependent Variable: Profitability (big hospitals)
1 (Constant) 2,212 ,614 3,606 ,003
Board commitees ,043 ,087 ,120 ,497 ,628
Evaluations ,299 ,195 ,445 1,530 ,150
Nr of meetings -,059 ,042 -,417 -1,392 ,187
Nr. of members -,139 ,072 -,503 -1,925 ,076*
a. Dependent Variable: Current ratio (medium hospitals)
1 (Constant) ,042 ,022 1,853 ,087
Board commitees -,005 ,003 -,372 -1,629 ,127
Evaluations ,013 ,007 ,517 1,881 ,083*
Nr of meetings -,001 ,002 -,261 -,921 ,374
Nr. of members -,001 ,003 -,119 -,481 ,639
a. Dependent Variable: Profitability (small hospitals)
1 (Constant) -,588 1,046 -,562 ,583
Board commitees ,070 ,218 ,065 ,320 ,754
Evaluations ,656 ,529 ,251 1,238 ,235
Nr of meetings ,280 ,096 ,629 2,911 ,011**
Nr. of members -,029 ,162 -,040 -,180 ,859
a. Dependent Variable: DSCR (small hospitals)
* Correlation is significant at the 10% level
** Correlation is significant at the 5% level
In the tables above the regressions of the different sizes of hospitals are worked out related to individual financial performance ratios. In these tables only the results with significance are presented.
Within the big hospitals I see two significant effects related to two different financial ratios. For the financial ratios margin of profit and profitability the number of board meetings have a correlation which is significant at 1% level. The Standardized Coefficients Beta is -0,583 for the margin of profit and -0,635 for profitability. The effect of the number of meetings of the supervisory board on these financial performance ratios is negative, which was expected in hypothesis 2.
Within the medium sized hospitals there is one significant effect. It is the effect of the number of members in a supervisory board related to the current ratio. The correlation is significant at a 10%
level. The Standardized Coefficients Beta is -0,503. The effect of the number of members of the supervisory board on the current ratio is negative, which was expected in hypothesis 3.
Within the small sized hospitals there are two significant effects: the effect of the existence of board evaluations on the profitability and the effect of the number of meetings on the debt service coverage ratio. The correlation of the existence of board evaluations is significant at a 10% level.
The Standardized Coefficients Beta is 0,517. The effect of the existence of board evaluations on the profitability is positive, which was expected in hypothesis 4. The correlation of the number of meetings on the DSCR is significant at a 5% level. The Standardized Coefficients Beta is 0,629. So the effect of the number of meetings of the supervisory board on the DSCR is positive, which was not expected in hypothesis 2.
All the outcomes and significant results above, could be interpreted too firm. However these findings are not very hard so further research should still be done on this subject. In the restrictions and possibilities for further research chapter of this thesis I will come back to this subject.
6 Conclusion and discussion
In this chapter the conclusion will be formulated and also the discussion. The restrictions of the research will also being presented in this chapter. In part 6.1 the conclusion will be described. In part 6.2 the discussion of this thesis will be discussed. In the last part of the chapter the restrictions and the possibilities of further research will be explained.