IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

The cost efficiency impact of the university operation fund on public universities in Taiwan

  • Kuo, Jenn-Shyong
  • Ho, Yi-Cheng
Registered author(s):

    This study uses the stochastic frontier multiple-product cost function that is modeled after Battese and Coelli [Battese, G. E., & Coelli, T. J. (1995). A model for technical inefficiency effects in a stochastic frontier production for panel data. Empirical Economics 20(2), 325-332.] in order to empirically measure the cost efficiency of the University Operation Fund (UOF) on Taiwan's public universities. The original purpose of the UOF's implementation was to reduce the government's financial burden by increasing cost efficiency in higher education institutions. By nature, the UOF differs from the traditional governmental budget regimes in three major respects. First of all, institutional operations and programs are no longer fully funded by government appropriations. Secondly, the universities can now retain surplus resources. Finally, the regulations on the use of funds raised by each institution itself are now less cumbersome. These differences provide universities with incentives for higher cost-efficiency and more active fund-raising. The empirical results from our study, which are based on panel data gathered from 34 public universities during the academic years 1992-2000, suggest that the adoption of the UOF has had a significantly negative impact on cost efficiency.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.sciencedirect.com/science/article/B6VB9-4PX7B89-2/2/a32fe21c74e9f5f8df6f4fc32f69acb3
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Elsevier in its journal Economics of Education Review.

    Volume (Year): 27 (2008)
    Issue (Month): 5 (October)
    Pages: 603-612

    as
    in new window

    Handle: RePEc:eee:ecoedu:v:27:y:2008:i:5:p:603-612
    Contact details of provider: Web page: http://www.elsevier.com/locate/econedurev

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. J. Glass & Donal McKillop & Gary O'Rourke, 1998. "A Cost Indirect Evaluation of Productivity Change in UK Universities," Journal of Productivity Analysis, Springer, vol. 10(2), pages 153-175, October.
    2. Levin, Henry M., 1997. "Raising school productivity: An x-efficiency approach," Economics of Education Review, Elsevier, vol. 16(3), pages 303-311, June.
    3. Dundar, Halil & Lewis, Darrell R., 1995. "Departmental productivity in American universities: Economies of scale and scope," Economics of Education Review, Elsevier, vol. 14(2), pages 119-144, June.
    4. John Robst, 2000. "Do state appropriations influence cost efficiency in public higher education?," Applied Economics Letters, Taylor & Francis Journals, vol. 7(11), pages 715-719.
    5. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
    6. Throsby, C D, 1986. "Cost Functions for Australian Universities," Australian Economic Papers, Wiley Blackwell, vol. 25(47), pages 175-92, December.
    7. de Groot, Hans & McMahon, Walter W & Volkwein, J Fredericks, 1991. "The Cost Structure of American Research Universities," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 424-31, August.
    8. Hung-jen Wang & Peter Schmidt, 2002. "One-Step and Two-Step Estimation of the Effects of Exogenous Variables on Technical Efficiency Levels," Journal of Productivity Analysis, Springer, vol. 18(2), pages 129-144, September.
    9. Niskanen, William A, 1975. "Bureaucrats and Politicians," Journal of Law and Economics, University of Chicago Press, vol. 18(3), pages 617-43, December.
    10. Cohn, Elchanan & Rhine, Sherrie L W & Santos, Maria C, 1989. "Institutions of Higher Education as Multi-product Firms: Economies of Scale and Scope," The Review of Economics and Statistics, MIT Press, vol. 71(2), pages 284-90, May.
    11. Banker, Rajiv D. & Potter, Gordon & Schroeder, Roger G., 1995. "An empirical analysis of manufacturing overhead cost drivers," Journal of Accounting and Economics, Elsevier, vol. 19(1), pages 115-137, February.
    12. Beasley, J. E., 1990. "Comparing university departments," Omega, Elsevier, vol. 18(2), pages 171-183.
    13. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    14. Caves, Douglas W & Christensen, Laurits R & Tretheway, Michael W, 1980. "Flexible Cost Functions for Multiproduct Firms," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 477-81, August.
    15. Glass, J C & McKillop, Donal G & Hyndman, N, 1995. "Efficiency in the Provision of University Teaching and Research: An Empirical Analysis of UK Universities," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(1), pages 61-72, Jan.-Marc.
    16. Antreas Athanassopoulos & Estelle Shale, 1997. "Assessing the Comparative Efficiency of Higher Education Institutions in the UK by the Means of Data Envelopment Analysis," Education Economics, Taylor & Francis Journals, vol. 5(2), pages 117-134.
    17. Coates, Dennis & Humphreys, Brad R, 2002. " The Supply of University Enrollments: University Administrators as Utility Maximizing Bureaucrats," Public Choice, Springer, vol. 110(3-4), pages 365-92, March.
    18. Quinn Weninger, 2003. "Estimating multiproduct costs when some outputs are not produced," Empirical Economics, Springer, vol. 28(4), pages 753-765, November.
    19. Keiji Hashimoto & Elchanan Cohn, 1997. "Economies of Scale and Scope in Japanese Private Universities," Education Economics, Taylor & Francis Journals, vol. 5(2), pages 107-115.
    20. Mensah, Yaw M. & Werner, Robert, 2003. "Cost efficiency and financial flexibility in institutions of higher education," Journal of Accounting and Public Policy, Elsevier, vol. 22(4), pages 293-323.
    21. George E. Battese & Greg S. Corra, 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 21(3), pages 169-179, December.
    22. Kim, H Youn, 1987. "Economies of Scale in Multi-product Firms: An Empirical Analysis," Economica, London School of Economics and Political Science, vol. 54(214), pages 185-206, May.
    23. Koshal, Rajindar K. & Koshal, Manjulika, 1999. "Economies of scale and scope in higher education: a case of comprehensive universities," Economics of Education Review, Elsevier, vol. 18(2), pages 269-277, April.
    24. Battese, George E. & Corra, Greg S., 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(03), December.
    25. Johnes, Jill & Johnes, Geraint, 1995. "Research funding and performance in U.K. University Departments of Economics: A frontier analysis," Economics of Education Review, Elsevier, vol. 14(3), pages 301-314, September.
    26. Izadi, Hooshang & Johnes, Geraint & Oskrochi, Reza & Crouchley, Robert, 2002. "Stochastic frontier estimation of a CES cost function: the case of higher education in Britain," Economics of Education Review, Elsevier, vol. 21(1), pages 63-71, February.
    27. Gary Madden & Scott Savage & Steven Kemp, 1997. "Measuring Public Sector Efficiency: A Study of Economics Departments at Australian Universities," Education Economics, Taylor & Francis Journals, vol. 5(2), pages 153-168.
    28. Verry, D W & Layard, P R G, 1975. "Cost Functions for University Teaching and Research," Economic Journal, Royal Economic Society, vol. 85(337), pages 55-74, March.
    29. Dennis Coates & Brad Humphreys & Michelle Vachris, 2004. "More evidence that university administrators are utility maximizing bureaucrats," Economics of Governance, Springer, vol. 5(1), pages 77-101, 04.
    30. Shirley Kress, 1989. "Niskanen effects in the California Community Colleges," Public Choice, Springer, vol. 61(2), pages 127-140, May.
    31. G. Johnes & J. Johnes, . "Measuring the Research Performance of UK Economics Departments: An Application of Data Envelopment Analysis," Working Papers ec17/90, Department of Economics, University of Lancaster.
    32. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
    33. Koshal, Rajindar K. & Koshal, Manjulika & Gupta, Ashok, 2001. "Multi-product total cost function for higher education: a case of bible colleges," Economics of Education Review, Elsevier, vol. 20(3), pages 297-303, June.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eee:ecoedu:v:27:y:2008:i:5:p:603-612. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.