Competing in the Higher Education Market: Empirical Evidence for Economies of Scale and Scope in German Higher Education Institutions
AbstractSince the late 1990s, the European higher education system has had to face deep structural changes. With the public authorities seeking to create an environment of quasi-markets in the higher education sector, the increased competition induced by recent reforms has pushed all publicly financed higher education institutions to use their resources more efficiently. Higher education institutions increasingly now aim at differentiating themselves from their competitors in terms of the range of outputs they produce. Assuming that different market positioning strategies will have different effects on the performance of higher education institutions, this paper explores the existence of economies of scale and scope in the German higher education sector. Using an input-oriented distance function approach, we estimate the economies of scale and scope and the technical efficiency for 154 German higher education institutions from 2001 through 2007. Our results suggest that comprehensive universities should indeed orientate their activities to the concept of a full-university that combines teaching and research activities across a broad range of subjects. In contrast, praxis-oriented small and medium-sized universities of applied sciences should specialise in the teaching and research activities they conduct.
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Bibliographic InfoPaper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 223.
Length: 37 pages
Date of creation: Dec 2011
Date of revision:
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Higher Education Production; Economies of Scale and Scope; Technical Efficiency; Stochastic Frontier Analysis; Input Distance Function;
Other versions of this item:
- Maria Olivares & Heike Wetzel, 2011. "Competing in the Higher Education Market: Empirical Evidence for Economies of Scale and Scope in German Higher Education Institutions," Economics of Education Working Paper Series 0070, University of Zurich, Institute for Strategy and Business Economics (ISU).
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-01-03 (All new papers)
- NEP-EDU-2012-01-03 (Education)
- NEP-EFF-2012-01-03 (Efficiency & Productivity)
- NEP-EUR-2012-01-03 (Microeconomic European Issues)
- NEP-IND-2012-01-03 (Industrial Organization)
- NEP-LAB-2012-01-03 (Labour Economics)
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