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University merging process

Marisa Hidalgo Hidalgo () and Guadalupe Valera Blanes
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Marisa Hidalgo Hidalgo: Universidad de Alicante
Guadalupe Valera Blanes: Universidad Pablo de Olavide

Authors registered in the RePEc Author Service: Marisa Hidalgo-Hidalgo ()

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: There is a recent tendency toward encouraging universities to merge. This policy is based on the idea that mergers create synergy gains that enhance universities’ prestige by increasing their international visibility. However, this process may reduce competition for both research funds and professors. This paper analyzes whether or not mergers among universities are optimal from an aggregate excellence point of view. We find that the relationship between cost differentials of competing universities, the amount of research funds and universities’ recruitment standard plays a key role when comparing aggregate excellence in a merging and a competition settings. In particular, we show that the higher the heterogeneity between potential merger institutions in terms of their reputation the greater the amount of funds needed to make mergers profitable.

Keywords: Higher Education; University Competition; Mergers; University Funding System. (search for similar items in EconPapers)
JEL-codes: H52 I22 D78 I23 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2013-01
New Economics Papers: this item is included in nep-edu
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Published by Ivie

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http://www.ivie.es/downloads/docs/wpasad/wpasad-2013-01.pdf Fisrt version / Primera version, 2013 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2013-01

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