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University merging process

Author

Listed:
  • Marisa Hidalgo Hidalgo

    (Universidad de Alicante)

  • Guadalupe Valera Blanes

    (Universidad Pablo de Olavide)

Abstract

There is a recent tendency toward encouraging universities to merge. This policy is based on the idea that mergers create synergy gains that enhance universities’ prestige by increasing their international visibility. However, this process may reduce competition for both research funds and professors. This paper analyzes whether or not mergers among universities are optimal from an aggregate excellence point of view. We find that the relationship between cost differentials of competing universities, the amount of research funds and universities’ recruitment standard plays a key role when comparing aggregate excellence in a merging and a competition settings. In particular, we show that the higher the heterogeneity between potential merger institutions in terms of their reputation the greater the amount of funds needed to make mergers profitable.

Suggested Citation

  • Marisa Hidalgo Hidalgo & Guadalupe Valera Blanes, 2013. "University merging process," Working Papers. Serie AD 2013-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasad:2013-01
    as

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    File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2013-01.pdf
    File Function: Fisrt version / Primera version, 2013
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Should we see more university mergers?
      by Economic Logician in Economic Logic on 2013-03-12 19:39:00

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    More about this item

    Keywords

    Higher Education; University Competition; Mergers; University Funding System.;
    All these keywords.

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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