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Scale and scope economies of Japanese private universities revisited with an input distance function approach

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  • Jiro Nemoto
  • Noriko Furumatsu

Abstract

This paper examines the scale and scope economies of higher education institutions in Japan assuming the presence of productive inefficiency. The standard approach to testing the scope economies is to apply the cost function. However, the cost function approach often entails the difficulty of obtaining reliable data on input prices, especially the input prices of capital for higher education institutions. This paper proposes a duality approach based on the input distance function. The scope economies are tested under a necessary and sufficient condition by retrieving the costs of joint and separate production from the input distance function. We apply the testing procedure to data pertaining to 218 Japanese private universities in 1999 and 2004. The results indicate the scale economies and the scope diseconomies. Copyright The Author(s) 2014

Suggested Citation

  • Jiro Nemoto & Noriko Furumatsu, 2014. "Scale and scope economies of Japanese private universities revisited with an input distance function approach," Journal of Productivity Analysis, Springer, vol. 41(2), pages 213-226, April.
    • Handle: RePEc:kap:jproda:v:41:y:2014:i:2:p:213-226
    DOI: 10.1007/s11123-013-0378-3
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    More about this item

    Keywords

    Scale economies; Scope economies; Input distance function; Higher education cost; D24; I23;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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