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The differential effect of competitive university funding on production frontier and efficiency


Bolli, Thomas; Olivares, Maria (2011). The differential effect of competitive university funding on production frontier and efficiency. In: First Lisbon Research Workshop on Economics and Econometrics of Education, Lissabon, Portugal, 7 January 2011 - 8 January 2011.

Abstract

This paper uses a panel data set containing universities across eight European countries to model an output distance function and analyze the impact of three competitive funding types on the production frontier and the university effciency. We find little evidence for an effect of the budget share financed by tuition fees or private funds on the production frontier, but a significantly negative impact of international public funds. Similarly, only international public funds have an effect on effiency. These findings are consistent with the hypothesis, that competitive funding reduces the frontier due to monitoring costs, but increases competition and therefore decreases ineffciency. Our findings remain robust to the inclusion of country-specific dummies and time trends, the use of lagged values and country averages as instruments and the variation of the identification strategy for university effciency.

Abstract

This paper uses a panel data set containing universities across eight European countries to model an output distance function and analyze the impact of three competitive funding types on the production frontier and the university effciency. We find little evidence for an effect of the budget share financed by tuition fees or private funds on the production frontier, but a significantly negative impact of international public funds. Similarly, only international public funds have an effect on effiency. These findings are consistent with the hypothesis, that competitive funding reduces the frontier due to monitoring costs, but increases competition and therefore decreases ineffciency. Our findings remain robust to the inclusion of country-specific dummies and time trends, the use of lagged values and country averages as instruments and the variation of the identification strategy for university effciency.

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Additional indexing

Item Type:Conference or Workshop Item (Paper), refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Event End Date:8 January 2011
Deposited On:02 Feb 2012 08:14
Last Modified:07 Dec 2017 11:11
Additional Information:Titel des Papers: Effects of Competitive Funding on University Effciency
Official URL:http://cemapre.iseg.utl.pt/events/1e3/papers/Maria%20Olivares.pdf
Related URLs:http://cemapre.iseg.utl.pt/events/1e3/
Other Identification Number:merlin-id:5067

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