Performance-based research funding allocation for excellence: Evidence from central and western Chinese higher education institutions

Research funds from the government play an essential role in the scientific research of public higher educational institutions (HEIs). To promote the development of central and western HEIs, the government, as a central decision maker, has increased the financial budget for research through educational policy. To achieve better improvement under this funding limitation, it is necessary to develop a reasonable resource allocation plan. Thus, a novel two-stage network DEA method with shared input is proposed to address this issue. Considering the roles of other HEIs in the allocation process, this study further combines the concept of cross-efficiency to obtain an optimal allocation plan. Finally, the proposed method is applied to reallocate government funds among the evaluated central and western HEIs (“Revitalization plan” HEIs), share them in each stage without decreasing efficiency, and set the output target simultaneously. The results show that the output will achieve a significant increase in the whole evaluated HEI after the reallocation of government funds. Moreover, the in-depth analysis provides a direction for future fund allocation for the government.