Spatial dependence in hospital efficiency: a spatial econometric approach for Ecuadorian public hospitals

This study analyses whether the efficiency of Ecuadorian public hospitals experiences spatial dependence. We investigate whether demand variations have affected public hospitals' efficiency performance through direct and spillover effects since the adoption of the current constitution in 2008. Our analysis exploits an innovative two-stage approach to estimate hospital efficiency in the first stage and then applies a spatial econometric framework to disentangle direct and spillover effects in the second. The results confirm positive spatial interactions among public hospitals' efficiency, as well as positive direct and spillover effects coming from demand increases, which have been reinforced since 2008.