Persistent inefficiency in the higher education sector: evidence from Germany

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractEvaluations of the Higher Education Sector are receiving increased attention, due to the rising expenditures and the absence of efficiency enhancing market pressure. To what extent universities are able to eliminate inefficiency is a question that has only partially been answered. This paper argues that heterogeneity among universities as well as persistent inefficiency hinder the institutions to achieve full efficiency -at least in the short run. Two standard and one novel specification of the Stochastic Frontier Analysis are applied to a new, comprehensive set of panel data to show how the standard efficiency evaluation changes when both aspects are taken into account. It is the first time that the idea of persistent inefficiency is considered in the analysis of the German Higher Education Sector. The comparison reveals that the disregard of heterogeneity distorts the estimation results towards lower efficiency values. The newly introduced specification improves the accuracy of the heterogeneity assumption and exposes that inefficiency tends to be long term and persistent rather than short term and residual. This implies that increasing efficiency requires a comprehensive change of the university structure.

The transient and persistent efficiency of Italian and German universities: a stochastic frontier analysis

“…Looking at the US, Titus et al (2016) shows that cost inefficiency tends to be persistent rather than short term in the local HE sector. Gralka (2016) confirms this results for German universities and concludes that a comprehensive change of the university structure seems to be necessary to increase efficiency. The fact that a persistent inefficiency component is prevalent in the HE sector of both countries, can be seen as a first indication that long-term factors could also be a reason behind efficiency variations between nations, validating the relevance of the present analysis.…”

“…Our findings are therefore important for expanding the literature about the cross-national comparison of universities' efficiency that, despite its relevance, is still in its infancy [Agasisti and Johnes (2009); Wolszczak-Derlacz and Parteka (2011), De Witte and López-Torres (2017)]. It additionally complements the studies by Titus et al (2016) and Gralka (2016) where, given the fact that the studies consider single countries, the implications can be interpreted only at managerial level (factors that can be addressed by universities' decision makers) and not also at policy level (design of the system's governance features, which lie in the hands of policy-makers).…”

“…In comparison Kempkes and Pohl (2010) as well as Johnes and Schwarzenberger (2011) displayed that the German universities work at a constantly high level of efficiency. While the idea of persistent inefficiency was not applied to the Italian HE sector, Gralka (2016) revealed that inefficiency of the German institutions is mainly caused by long term factors. We complement the study by Agasisti and Pohl (2012) as well as Lehmann et al (2016) who compared Italian and German institutions, using the Data Envelopment Analysis (DEA) and showed that, while universities from the latter country are more efficient, the Italian universities are catching up.…”

“…14 Both datasets have been used previously in separate efficiency analysis and where merged for the following analysis, see Agasisti (2011) and Gralka (2016).…”

Using archetypoid analysis to classify institutions and faculties of economics

“…The performance measurement of research institutions and universities takes up an increasing role in current policy discussions. While the associated debate on rankings and efficiency evaluations has been taken up in the scientific literature (Bolli et al 2016;Gnewuch and Wohlrabe 2018;Gralka 2018) the underlying classification of institutions seems to have been largely neglected. However, a classification-a creation of a framework for 1 3 diverse institutions-is one of the most challenging tasks a researcher can be confronted with (Hazelkorn 2007).…”