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Size and economies of scale in higher education and the implications for mergers

Nyasha Tirivayi (), H. Maasen van den Brink () and W.N.J. Groot ()
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H. Maasen van den Brink: TIER, Maastricht University, and Faculty of Economics, UvA
W.N.J. Groot: CAPHRI, Department of Health Services Research, Maastricht University

No 2014-066, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: This paper carries out a meta regression analysis to estimate the optimal size of higher education institutions HEI and identify its implications for strategies of mergers in higher education. This study finds an optimal institutional size of 24,954 students. We find potential opportunities for merging different HEIs relative to their mean sample size public universities by nearly 190 per cent, private universities by 131 per cent, small colleges by around 952 per cent, and non-US HEIs by about 118 per cent. However, if we compare with actual sizes of top ranked universities we find that in some parts of the world top ranked universities seem to be below optimal size, while in others they appear above optimal size. We urge caution in the interpretation of the findings due to the limited data. We recommend further research and that policymakers around the world refer to their own cost structures to determine the optimal size for efficiency.

Keywords: Econmies of scale; Higher education; Institutional size; Mergers (search for similar items in EconPapers)
JEL-codes: I21 I22 I23 (search for similar items in EconPapers)
Date: 2014-07-31
New Economics Papers: this item is included in nep-edu, nep-eff and nep-ind
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