Does merging improve efficiency? A study of English universities. Issue 8 (3rd August 2019)

• Record Type: Journal Article
• Authors: Papadimitriou, Maria; Johnes, Jill
• Is Part Of: Studies in higher education. Volume 44:Issue 8(2019)
• Page Start: 1454
• Page End: 1474
• Publication Date: 2019-08-03
• Subjects: Mergers -- higher education -- efficiency; Education, Higher -- Periodicals; 378.005
• DOI: 10.1080/03075079.2018.1450851
• Languages: English
• ISSNs: 0307-5079

Abstract

ABSTRACT: This paper focuses on the effect of merger on university efficiency. In a first stage analysis, efficiency scores of English universities are derived for a 17-year period using the frontier estimation method data envelopment analysis. A second stage analysis explores the effect of merger and other factors on efficiency. We find that mean efficiency for the sector has varied from around 60% to 70%, but that the efficiency levels of the vast majority of individual higher education institutions (HEIs) are not significantly different from each other. Merged HEIs have an efficiency which is around five percentage points higher post-merger than non-merging HEIs holding all else constant; but we find that the efficiency impact of merger does not last long (not more than a year) after the merger. The transitory nature of the efficiency gain is an important finding which should be noted by politicians and managers considering a policy of merger.