Jiayi Liu

Assistant Professor, Virginia Tech

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2. The effect of competition on operational efficiency: Evidence from kidney transplantation


Working Paper


Jiayi Liu, Guihua Wang, Jun Li, Wallace Hopp
Under Revision at Management Science, 2025

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Cite

APA   Click to copy
Liu, J., Wang, G., Li, J., & Hopp, W. (2025). 2. The effect of competition on operational efficiency: Evidence from kidney transplantation. Under Revision at Management Science.


Chicago/Turabian   Click to copy
Liu, Jiayi, Guihua Wang, Jun Li, and Wallace Hopp. “2. The Effect of Competition on Operational Efficiency: Evidence from Kidney Transplantation.” Under Revision at Management Science (2025).


MLA   Click to copy
Liu, Jiayi, et al. “2. The Effect of Competition on Operational Efficiency: Evidence from Kidney Transplantation.” Under Revision at Management Science, 2025.


BibTeX   Click to copy

@article{jiayi2025a,
  title = {2. The effect of competition on operational efficiency: Evidence from kidney transplantation},
  year = {2025},
  journal = {Under Revision at Management Science},
  author = {Liu, Jiayi and Wang, Guihua and Li, Jun and Hopp, Wallace}
}

Among the 100,000 patients on the kidney transplant waiting list in the U.S., only about one-fifth receive a transplant each year, with thousands dying while waiting. Despite a critical kidney shortage, 20% of harvested kidneys are discarded annually. This study examines how competition among transplant centers affects kidney acceptance by leveraging the entries of new transplant centers into the kidney transplant market. Using kidney transplant data between 2002 and 2019 and a difference-in-differences approach, we find that a new entry increases kidney acceptance by 43.8%. This effect is primarily driven by high-risk kidneys, suggesting that transplant centers become more risk-taking after a new entry. We also find that the effect is heterogeneous across transplant centers. For example, the effect is larger for low-volume and low-efficiency centers and those close to the new entrant. In addition, we find that a new entry improves operational efficiency (e.g., reducing the number of kidneys discarded). The net result is that patients have shorter waits for kidneys and thus experience longer and healthier lives. Moreover, for patients who receive kidneys, we find that although a new entry does not significantly affect patient post-transplant outcomes on average, it positively affects high-volume and high-efficiency centers but negatively affects low-volume and low-efficiency centers.


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