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Is the University Model an Organizational Necessity? Scale and Agglomeration Effects in Science

  • Brandt, Tasso

    ()

    (Fraunhofer ISI)

  • Schubert, Torben

    ()

    (CIRCLE, Lund University)

In this paper we argue that the emergence of the dominant model of university organization, which is characterized by a large agglomeration of (often loosely affiliated) many small research groups, might have an economic explanation that relates to the features of the scientific production process. In particular, we argue that there are decreasing returns to scale on the level of the individual research groups, which prevent them from becoming to large, while we argue for positive agglomeration effects on the supra-research-group-level inside the university. As a consequence an efficient university organization would precisely consist of tying together many small individual research groups without merging them. Basing our empirical analysis on a multilevel dataset for German research institutes from four disciplines we are able to find strong support for the presence of these effects. This suggests that the emergence of the dominant model of university organization may also be the result of these particular features of the production process, where the least we can say is that this model is under the given circumstances highly efficient.

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Paper provided by Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy in its series Papers in Innovation Studies with number 2012/1.

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Length: 30 pages
Date of creation: 27 Feb 2012
Date of revision:
Handle: RePEc:hhs:lucirc:2012_001
Contact details of provider: Postal: CIRCLE, Lund University, PO Box 117, SE-22100 Lund, Sweden
Phone: +46 (0) 46 222 74 68
Web page: http://www.circle.lu.se/

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  1. Olof Ejermo & Astrid Kander, 2011. "Swedish business research productivity," Industrial and Corporate Change, Oxford University Press, vol. 20(4), pages 1081-1118, August.
  2. 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.
  3. Schön, Lennart & Kander, Astrid, 2007. "Industrial dynamics and innovative pressure on energy - Sweden with European and Global outlooks," Papers in Innovation Studies 2007/5, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  4. E Thanassoulis & G Johnes & J Johnes, 2005. "An analysis of costs in institutions of higher education in England," Working Papers 566942, Lancaster University Management School, Economics Department.
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  6. Kander, Astrid & Enflo, Kerstin & Schön, Lennart, 2007. "In Defense of Electricity as a General Purpose Technology," Papers in Innovation Studies 2007/6, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  7. 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.
  8. Roland Andersson & John M. Quigley & Mats Wilhelmson, 2004. "University decentralization as regional policy: the Swedish experiment," Journal of Economic Geography, Oxford University Press, vol. 4(4), pages 371-388, August.
  9. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  10. Carayol, Nicolas & Matt, Mireille, 2004. "Does research organization influence academic production?: Laboratory level evidence from a large European university," Research Policy, Elsevier, vol. 33(8), pages 1081-1102, October.
  11. G. Thomas Sav, 2004. "Higher education costs and scale and scope economies," Applied Economics, Taylor & Francis Journals, vol. 36(6), pages 607-614.
  12. Marshall, Alfred, 1890. "The Principles of Economics," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number marshall1890.
  13. David N. Laband & Bernard F. Lentz, 2003. "New Estimates of Economies of Scale and Scope in Higher Education," Southern Economic Journal, Southern Economic Association, vol. 70(1), pages 172-183, July.
  14. Shih-Fang Lo & Wen-Min Lu, 2006. "Does Size Matter? Finding The Profitability And Marketability Benchmark Of Financial Holding Companies," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 23(02), pages 229-246.
  15. 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.
  16. Schubert, Torben, 2009. "Empirical observations on New Public Management to increase efficiency in public research--Boon or bane?," Research Policy, Elsevier, vol. 38(8), pages 1225-1234, October.
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