The distinction between the exogenous x and endogenous q is important for
the modelling of managerial decision making and for the interpretation of the
regression results. However, our particular assumptions about whether quality and
the numbers of fundholding GPs are endogenous or exogenous are illustrative, not
essential. We test for the endogeneity of our quality measure and for the numbers
of fundholding GPs in the empirical section.