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Best-practice benchmarking in UK higher education: new nonparametric approaches using financial ratios and profit efficiency methodologies

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  • J. Colin Glass
  • Gillian McCallion
  • Donal McKillop
  • Syamarlah Rasaratnam
  • Karl Stringer

Abstract

The neglected issue of using profit efficiency for the best-practice benchmarking of UK universities is explored to see whether this supports the policy stance of encouraging more specialized university production. The article also investigates whether nonparametric modelling with financial ratios, in contrast to nonparametric modelling based on the prices and quantities of each university's inputs and outputs, can yield ready insights into this profit efficiency issue. The empirical results, using two new approaches, confirm that more specialized university production yields relatively higher performance on average than less specialized production. The results also highlight certain advantages of financial ratios modelling.

Suggested Citation

  • J. Colin Glass & Gillian McCallion & Donal McKillop & Syamarlah Rasaratnam & Karl Stringer, 2009. "Best-practice benchmarking in UK higher education: new nonparametric approaches using financial ratios and profit efficiency methodologies," Applied Economics, Taylor & Francis Journals, vol. 41(2), pages 249-267.
    • Handle: RePEc:taf:applec:v:41:y:2009:i:2:p:249-267
    DOI: 10.1080/00036840600994278
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    References listed on IDEAS

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    1. Fried, Harold O. & Lovell, C. A. Knox & Schmidt, Shelton S. (ed.), 1993. "The Measurement of Productive Efficiency: Techniques and Applications," OUP Catalogue, Oxford University Press, number 9780195072181.
    2. Lovell, Knox, 2001. "Future Research Opportunities in Efficiency and Productivity Analysis," Efficiency Series Papers 2001/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
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    1. Kristof De Witte & Laura López-Torres, 2017. "Efficiency in education: a review of literature and a way forward," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(4), pages 339-363, April.
    2. Bruno De Borger & Kristiaan Kerstens & Diego Prior & Ignace Van de Woestyne, 2013. "Static efficiency decompositions and capacity utilization: integrating economic and technical capacity notions," Applied Economics, Taylor & Francis Journals, vol. 45(24), pages 3529-3529, August.
    3. Fu, Tsu-Tan & Sung, An-De & See, Kok Fong & Chou, Kuo-Wei, 2019. "Do optimal scale and efficiency matter in Taiwan's higher education reform? A stochastic cost frontier approach," Socio-Economic Planning Sciences, Elsevier, vol. 67(C), pages 111-119.
    4. Zofio, Jose Luis & Aparicio, Juan & Barbero, Javier & Zabala-Iturriagagoitia, Jon Mikel, 2024. "Benchmarking performance through efficiency analysis trees: Improvement strategies for colombian higher education institutions," Socio-Economic Planning Sciences, Elsevier, vol. 92(C).
    5. Sarbjeet Kaur & Gurcharan Singh, 2020. "Financial Comparative Analysis of State Public Universities of Punjab," International Journal of Economics and Financial Issues, Econjournals, vol. 10(5), pages 140-144.

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