The Influence of Administrative Intensity on Efficiency: An Empirical Analysis of Australian Universities

Abstract

While a voluminous empirical literature has investigated university efficiency, much less attention has focused on the impact of administrative intensity on university performance. In this article, we seek to contribute to the empirical literature by examining the relationship between operational efficiency and administrative intensity in the Australian higher education sector over the period 2009/10–2018/19 using a second stage bootstrapping Data Envelopment Analysis (DEA) fractional regression model. We find that administrative intensity positively affects the performance of universities for both the standard and bias‐corrected efficiency models. Moreover, administrative intensity exhibits an inverted U‐shaped relationship with university efficiency. We also find that administrative intensity has a differential impact on the efficiency of the different types of university. Various public policy implications are considered.