This study examines factors influencing make or buy decisions corresponding to four generic services (housekeeping, laundry, food services, and maintenance and security) in the Spanish hospitals (3.160 transactions for 790 hospitals). The paper presents the empirical estimation of a logistic model based in the utility maximisation of hospitals. Factors included in the model are not only those related with transaction costs, but those related with public intervention and political dimension.

We find evidence that economies of scale are related with a higher level of vertical integration, while specialisation and for profit objective favour the contracting-out choice. Organisational choice for laundry services presents a different pattern from the other three services. Empirical results show that some asset specificity could be present in laundry services.