The Dynamics of Productivity in the Swiss and German University Sector: A Non-Parametric Analysis that Accounts for Heterogeneous Production

Abstract

Based on a disaggregate cross-country analysis, we investigate the performance of 10 public Swiss universities and 77 public German universities from [2001][2002][2003][2004][2005][2006][2007]. During this period the universities in both countries have faced two major reforms aimed at improving efficiency and productivity in the European higher education sector. We assess the change in productivity and its sources, that is technological change, technical efficiency change and scale effects, obtained by computing the non-parametric Malmquist productivity index by benchmarking the non-science disciplines and the science disciplines of both countries separately against a common frontier. Given the lack of statistical inference of non-parametric productivity analyses, we employ bootstrapping techniques and estimate confidence intervals, allowing us to verify the statistical significance of our results. The results indicate that improvements in technical efficiency were by far the most important driver for productivity growth, followed by gains realised through exploiting economies of scale; thereby technological change partly reduced the increases in productivity. Our findings, however, suggest reform-related differences between the Swiss and the German public university sector. Further, the results point to structural differences across the scientific disciplines, as we found divergent patterns for the development in productivity and its sources in the non-sciences and the sciences.

The dynamics of productivity in Swiss universities

“…While the authors do not examine the scale effects, their regression results indicate decreasing returns to scale suggesting that the expansion of universities could have detrimental productivity effects. This is in direct contrast to Olivares and Schenker-Wicki (2012) but also to other studies. Namely, Filippini and Lepori (2007) report significant economies of capacity utilization, suggesting that output expansion can increase productivity.…”

“…The topic has received attention in two recent studies (Olivares and Schenker-Wicki 2012;Agasisti and Bolli 2013), but the results show some conflicting trends warranting further research. While the former study points to important gains due to scale effects combined with a negative technological progress, the latter suggests a general decline in productivity but with little evidence of positive scale effects.…”