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How to compete in the higher education market? - Empirical evidence for economies of scale and scope of German higher education institutions


Olivares, Maria; Wetzel, Heike (2011). How to compete in the higher education market? - Empirical evidence for economies of scale and scope of German higher education institutions. Economics of Education. Leading House Working Paper 70, University of Zurich.

Abstract

Since 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.

Since 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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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:December 2011
Deposited On:30 Jan 2012 15:38
Last Modified:05 Apr 2016 15:21
Series Name:Economics of Education. Leading House Working Paper
Number of Pages:32
Additional Information:The paper was presented at XII European Workshop on Efficiency and Productivity Analysis (EWEPA), Verona, Italy, 21 June 2011 - 24 June 2011
Official URL:http://www.isu.uzh.ch/leadinghouse/WorkingPapers/0070_lhwpaper.pdf
Related URLs:http://www.ewepa.org/
Other Identification Number:merlin-id:5069
Permanent URL: http://doi.org/10.5167/uzh-54651

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