Economies of scale and scope of universities – towards bigger size and specialization?

Tommaso Agasisti (), Alice Bertoletti and Giacomo Pignataro
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Tommaso Agasisti: Politecnico di Milano, School of Management

Economics Bulletin, 2021, vol. 41, issue 2, 405-416

Abstract: This paper provides an estimation of the specific cost structure of the Italian public universities, considering their complex function of producing teaching and research. The analysis employs a quadratic cost function and an innovative dataset for the year 2016. When modelling the cost structure, we explicitly take the potential inefficiency into account, using a Stochastic Frontier Analysis. Current levels of marginal and average costs suggest that economies of scale can be still exploited. Strong diseconomies of scope between teaching and research also exist. Policies dealing with mergers and specialization are justified from the cost-efficiency point of view.

Keywords: Universities; cost functions; economies of scale; economies of scope; stochastic frontier (search for similar items in EconPapers)
JEL-codes: H8 I2 (search for similar items in EconPapers)
Date: 2021-04-09
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