IDEAS home Printed from https://ideas.repec.org/a/spr/scient/v129y2024i5d10.1007_s11192-024-04967-8.html
   My bibliography  Save this article

Determining scale and scope economies in Korean private universities: an input distance function approach

Author

Listed:
  • Mehdi Shamohammadi

    (Inha University)

Abstract

Over the past few decades, South Korea has prioritized higher education to boost knowledge-based economic development. This study investigates Korean private universities’ scale and scope economies using several input/output variables and employs them using a stochastic frontier analysis of the input distance function. As our dataset does not comprise price-based information, the duality approach between the cost and input distance functions enables us to use our data directly to test ray- and product-specific scale and scope economies. Our dataset comprises university-level data for 57 private universities from 2011 to 2016. The findings reveal ray-scale and global-scope economies for the sampled universities. Based on these empirical results, we provide several suggestions for future research.

Suggested Citation

  • Mehdi Shamohammadi, 2024. "Determining scale and scope economies in Korean private universities: an input distance function approach," Scientometrics, Springer;Akadémiai Kiadó, vol. 129(5), pages 2583-2613, May.
    • Handle: RePEc:spr:scient:v:129:y:2024:i:5:d:10.1007_s11192-024-04967-8
    DOI: 10.1007/s11192-024-04967-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11192-024-04967-8
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11192-024-04967-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    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. Malcolm Abbott & Chris Doucouliagos, 2009. "Competition and efficiency: overseas students and technical efficiency in Australian and New Zealand universities," Education Economics, Taylor & Francis Journals, vol. 17(1), pages 31-57.
    3. Feng, Guohua & Serletis, Apostolos, 2010. "Efficiency, technical change, and returns to scale in large US banks: Panel data evidence from an output distance function satisfying theoretical regularity," Journal of Banking & Finance, Elsevier, vol. 34(1), pages 127-138, January.
    4. Jiro Nemoto & Noriko Furumatsu, 2014. "Scale and scope economies of Japanese private universities revisited with an input distance function approach," Journal of Productivity Analysis, Springer, vol. 41(2), pages 213-226, April.
    5. Jill Johnes, 2014. "Efficiency and Mergers in English Higher Education 1996/97 to 2008/9: Parametric and Non-parametric Estimation of the Multi-input Multi-output Distance Function," Manchester School, University of Manchester, vol. 82(4), pages 465-487, July.
    6. Youtie, Jan & Shapira, Philip, 2008. "Building an innovation hub: A case study of the transformation of university roles in regional technological and economic development," Research Policy, Elsevier, vol. 37(8), pages 1188-1204, September.
    7. Abhiman Das & Subal C. Kumbhakar, 2012. "Productivity and efficiency dynamics in Indian banking: An input distance function approach incorporating quality of inputs and outputs," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 27(2), pages 205-234, March.
    8. Barra, Cristian & Lagravinese, Raffaele & Zotti, Roberto, 2018. "Does econometric methodology matter to rank universities? An analysis of Italian higher education system," Socio-Economic Planning Sciences, Elsevier, vol. 62(C), pages 104-120.
    9. repec:ebl:ecbull:v:4:y:2007:i:15:p:1-9 is not listed on IDEAS
    10. Jie Wu & Ganggang Zhang & Qingyuan Zhu & Zhixiang Zhou, 2020. "An efficiency analysis of higher education institutions in China from a regional perspective considering the external environmental impact," Scientometrics, Springer;Akadémiai Kiadó, vol. 122(1), pages 57-70, January.
    11. Agasisti, Tommaso & Barra, Cristian & Zotti, Roberto, 2016. "Evaluating the efficiency of Italian public universities (2008–2011) in presence of (unobserved) heterogeneity," Socio-Economic Planning Sciences, Elsevier, vol. 55(C), pages 47-58.
    12. Lee, Boon L. & Worthington, Andrew C., 2016. "A network DEA quantity and quality-orientated production model: An application to Australian university research services," Omega, Elsevier, vol. 60(C), pages 26-33.
    13. Svend Rasmussen, 2010. "Scale efficiency in Danish agriculture: an input distance--function approach," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 37(3), pages 335-367, September.
    14. Hajargasht, Gholamreza & Coelli, Tim & Rao, D.S. Prasada, 2008. "A dual measure of economies of scope," Economics Letters, Elsevier, vol. 100(2), pages 185-188, August.
    15. 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.
    16. Maria Olivares & Heike Wetzel, 2014. "Editor's Choice Competing in the Higher Education Market: Empirical Evidence for Economies of Scale and Scope in German Higher Education Institutions," CESifo Economic Studies, CESifo Group, vol. 60(4), pages 653-680.
    17. Tommaso Agasisti & Geraint Johnes, 2010. "Heterogeneity and the evaluation of efficiency: the case of Italian universities," Applied Economics, Taylor & Francis Journals, vol. 42(11), pages 1365-1375.
    18. Daraio, Cinzia & Bonaccorsi, Andrea & Simar, Léopold, 2015. "Efficiency and economies of scale and specialization in European universities: A directional distance approach," Journal of Informetrics, Elsevier, vol. 9(3), pages 430-448.
    19. Maican, Florin & Orth, Matilda, 2021. "Determinants of economies of scope in retail," International Journal of Industrial Organization, Elsevier, vol. 75(C).
    20. Geraint Johnes & Manuel Salas-Velasco, 2007. "The Determinants Of Costs And Efficiencies Where Producers Are Heterogeneous: The Case Of Spanish Universities," Economics Bulletin, AccessEcon, vol. 4(15), pages 1-9.
    21. Becker, William E, Jr, 1979. "Professorial Behavior Given a Stochastic Reward Structure," American Economic Review, American Economic Association, vol. 69(5), pages 1010-1017, December.
    22. Torben Schubert, 2014. "Are there scale economies in scientific production? On the topic of locally increasing returns to scale," Scientometrics, Springer;Akadémiai Kiadó, vol. 99(2), pages 393-408, May.
    23. 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.
    24. Zhang, Chonghui & Jiang, Nanyue & Su, Tiantian & Chen, Ji & Streimikiene, Dalia & Balezentis, Tomas, 2022. "Spreading knowledge and technology: Research efficiency at universities based on the three-stage MCDM-NRSDEA method with bootstrapping," Technology in Society, Elsevier, vol. 68(C).
    25. Subal Kumbhakar & Luis Orea & Ana Rodríguez-Álvarez & Efthymios Tsionas, 2007. "Do we estimate an input or an output distance function? An application of the mixture approach to European railways," Journal of Productivity Analysis, Springer, vol. 27(2), pages 87-100, April.
    26. Kao, Chiang & Pang, Rui-Zhi & Liu, Shiang-Tai & Bai, Xue-Jie, 2021. "Optimal expansion paths for hospitals of different types: Viewpoint of scope economies and evidence from Chinese hospitals," European Journal of Operational Research, Elsevier, vol. 289(2), pages 628-638.
    27. 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 325-332.
    28. Greene, William, 2005. "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model," Journal of Econometrics, Elsevier, vol. 126(2), pages 269-303, June.
    29. repec:pri:indrel:dsp01sj1391935 is not listed on IDEAS
    30. Philip Andrew Stevens, 2005. "A Stochastic Frontier Analysis of English and Welsh Universities," Education Economics, Taylor & Francis Journals, vol. 13(4), pages 355-374.
    31. 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.
    32. 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.
    33. Dolan, Robert C. & Schmidt, Robert M., 1994. "Modeling institutional production of higher education," Economics of Education Review, Elsevier, vol. 13(3), pages 197-213, September.
    34. Willam Greene, 2005. "Fixed and Random Effects in Stochastic Frontier Models," Journal of Productivity Analysis, Springer, vol. 23(1), pages 7-32, January.
    35. Färe, Rolf & Karagiannis, Giannis, 2018. "Inferring scope economies from the input distance function," Economics Letters, Elsevier, vol. 172(C), pages 40-42.
    36. Geraint Johnes & Jill Johnes, 2016. "Costs, efficiency, and economies of scale and scope in the English higher education sector," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 32(4), pages 596-614.
    37. David Saal & David Parker & Tom Weyman-Jones, 2007. "Determining the contribution of technical change, efficiency change and scale change to productivity growth in the privatized English and Welsh water and sewerage industry: 1985–2000," Journal of Productivity Analysis, Springer, vol. 28(1), pages 127-139, October.
    38. John M. Abowd, 1977. "An Econometric Model of the U.S. Market for Higher Education," Working Papers 482, Princeton University, Department of Economics, Industrial Relations Section..
    39. 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.
    40. 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 284-290, May.
    41. Sohn, Dong-Won & Kenney, Martin, 2007. "Universities, Clusters, and Innovation Systems: The Case of Seoul, Korea," World Development, Elsevier, vol. 35(6), pages 991-1004, June.
    42. Benoit Dervaux & Gary Ferrier & Herve Leleu & Vivian Valdmanis, 2004. "Comparing French and US hospital technologies: a directional input distance function approach," Applied Economics, Taylor & Francis Journals, vol. 36(10), pages 1065-1081.
    43. 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.
    44. Geraint Johnes & Astrid Schwarzenberger, 2011. "Differences in cost structure and the evaluation of efficiency: the case of German universities," Education Economics, Taylor & Francis Journals, vol. 19(5), pages 487-499, January.
    45. Fare, Rolf & Grosskopf, Shawna & Noh, Dong-Woon & Weber, William, 2005. "Characteristics of a polluting technology: theory and practice," Journal of Econometrics, Elsevier, vol. 126(2), pages 469-492, June.
    46. repec:fth:prinin:102 is not listed on IDEAS
    47. 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 424-431, August.
    48. Mydland, Ørjan & Kumbhakar, Subal C. & Lien, Gudbrand & Amundsveen, Roar & Kvile, Hilde Marit, 2020. "Economies of scope and scale in the Norwegian electricity industry," Economic Modelling, Elsevier, vol. 88(C), pages 39-46.
    49. Johnes, Jill, 2006. "Measuring teaching efficiency in higher education: An application of data envelopment analysis to economics graduates from UK Universities 1993," European Journal of Operational Research, Elsevier, vol. 174(1), pages 443-456, October.
    50. Bolli, Thomas & Olivares, Maria & Bonaccorsi, Andrea & Daraio, Cinzia & Aracil, Adela Garcia & Lepori, Benedetto, 2016. "The differential effects of competitive funding on the production frontier and the efficiency of universities," Economics of Education Review, Elsevier, vol. 52(C), pages 91-104.
    51. Shamohammadi, Mehdi & Oh, Dong-hyun, 2019. "Measuring the efficiency changes of private universities of Korea: A two-stage network data envelopment analysis," Technological Forecasting and Social Change, Elsevier, vol. 148(C).
    52. Tsu‐Tan Fu & Cliff J. Huang & Yung‐Lieh Yang, 2011. "Quality And Economies Of Scale In Higher Education: A Semiparametric Smooth Coefficient Estimation," Contemporary Economic Policy, Western Economic Association International, vol. 29(1), pages 138-149, January.
    53. G. Thomas Sav, 2004. "Higher education costs and scale and scope economies," Applied Economics, Taylor & Francis Journals, vol. 36(6), pages 607-614.
    54. Bramwell, Allison & Wolfe, David A., 2008. "Universities and regional economic development: The entrepreneurial University of Waterloo," Research Policy, Elsevier, vol. 37(8), pages 1175-1187, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gralka, Sabine, 2018. "Stochastic frontier analysis in higher education: A systematic review," CEPIE Working Papers 05/18, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    2. Liang-Cheng Zhang & Andrew C. Worthington, 2018. "Explaining Estimated Economies of Scale and Scope in Higher Education: A Meta-Regression Analysis," Research in Higher Education, Springer;Association for Institutional Research, vol. 59(2), pages 156-173, March.
    3. Shamohammadi, Mehdi & Oh, Dong-hyun, 2019. "Measuring the efficiency changes of private universities of Korea: A two-stage network data envelopment analysis," Technological Forecasting and Social Change, Elsevier, vol. 148(C).
    4. Vanesa D’Elia & Gustavo Ferro, 2019. "Empirical Efficiency Measurement in Higher Education: An Overview," CEMA Working Papers: Serie Documentos de Trabajo. 708, Universidad del CEMA.
    5. Kuo, Jenn-Shyong & Ho, Yi-Cheng, 2008. "The cost efficiency impact of the university operation fund on public universities in Taiwan," Economics of Education Review, Elsevier, vol. 27(5), pages 603-612, October.
    6. Jiro Nemoto & Noriko Furumatsu, 2014. "Scale and scope economies of Japanese private universities revisited with an input distance function approach," Journal of Productivity Analysis, Springer, vol. 41(2), pages 213-226, April.
    7. Mehdi Rhaiem, 2017. "Measurement and determinants of academic research efficiency: a systematic review of the evidence," Scientometrics, Springer;Akadémiai Kiadó, vol. 110(2), pages 581-615, February.
    8. Marvin A. Titus & Adriana Vamosiu & Kevin R. McClure, 2017. "Are Public Master’s Institutions Cost Efficient? A Stochastic Frontier and Spatial Analysis," Research in Higher Education, Springer;Association for Institutional Research, vol. 58(5), pages 469-496, August.
    9. Barra, Cristian & Lagravinese, Raffaele & Zotti, Roberto, 2018. "Does econometric methodology matter to rank universities? An analysis of Italian higher education system," Socio-Economic Planning Sciences, Elsevier, vol. 62(C), pages 104-120.
    10. Laureti, Tiziana & Secondi, Luca & Biggeri, Luigi, 2014. "Measuring the efficiency of teaching activities in Italian universities: An information theoretic approach," Economics of Education Review, Elsevier, vol. 42(C), pages 147-164.
    11. Sabine Gralka, 2018. "Persistent inefficiency in the higher education sector: evidence from Germany," Education Economics, Taylor & Francis Journals, vol. 26(4), pages 373-392, July.
    12. Thomas Bolli & Mehdi Farsi, 2015. "The dynamics of productivity in Swiss universities," Journal of Productivity Analysis, Springer, vol. 44(1), pages 21-38, August.
    13. Kristof De Witte & Laura López-Torres, 2017. "Efficiency in education: a review of literature and a way forward," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(4), pages 339-363, April.
    14. Agasisti, Tommaso & Barra, Cristian & Zotti, Roberto, 2016. "Evaluating the efficiency of Italian public universities (2008–2011) in presence of (unobserved) heterogeneity," Socio-Economic Planning Sciences, Elsevier, vol. 55(C), pages 47-58.
    15. T Agasisti & G Johnes, 2009. "Cost Structure, Efficiency and Heterogeneity in US Higher Education: An Empirical Analysis," Working Papers 599308, Lancaster University Management School, Economics Department.
    16. repec:lan:wpaper:4487 is not listed on IDEAS
    17. Longlong, Hou & Fengliang, Li & Weifang, Min, 2009. "Multi-product total cost functions for higher education: The case of Chinese research universities," Economics of Education Review, Elsevier, vol. 28(4), pages 505-511, August.
    18. repec:lan:wpaper:4792 is not listed on IDEAS
    19. Tommaso Agasisti & Sabine Gralka, 2019. "The transient and persistent efficiency of Italian and German universities: a stochastic frontier analysis," Applied Economics, Taylor & Francis Journals, vol. 51(46), pages 5012-5030, October.
    20. repec:lan:wpaper:4358 is not listed on IDEAS
    21. Bouzouita, Anis & Kooli, Imen, 2024. "Evaluating the performance of Tunisian higher Institutes of Technological Studies (ISETs) using a stochastic frontier analysis," Evaluation and Program Planning, Elsevier, vol. 107(C).
    22. Bolli, Thomas & Olivares, Maria & Bonaccorsi, Andrea & Daraio, Cinzia & Aracil, Adela Garcia & Lepori, Benedetto, 2016. "The differential effects of competitive funding on the production frontier and the efficiency of universities," Economics of Education Review, Elsevier, vol. 52(C), pages 91-104.
    23. Mehdi Rhaiem & Nabil Amara, 2020. "Determinants of research efficiency in Canadian business schools: evidence from scholar-level data," Scientometrics, Springer;Akadémiai Kiadó, vol. 125(1), pages 53-99, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:scient:v:129:y:2024:i:5:d:10.1007_s11192-024-04967-8. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.