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The Economic Analysis of Universities

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The Economic Analysis of Universities

Strategic Groups and Positioning

9781845428334 Edward Elgar Publishing
Susanne Warning, Universität Augsburg, Germany
Publication Date: 2007 ISBN: 978 1 84542 833 4 Extent: 224 pp
This book provides a theoretical and empirical analysis of strategic positioning of public universities. The concept of strategic groups from management theory and a formal equilibrium model of differentiation under strategic interaction are developed to explain heterogeneity and the role of teaching and research quality as the two main strategic variables of universities. Using data for German publicly funded universities, the empirical tests apply Data Envelopment Analysis and econometric methods. The results offer important insights for all countries where publicly funded universities play a role. Recent shifts towards more competitive university systems further increase the relevance of this book.

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Higher education, especially that which is publicly funded, is under increasing scrutiny from politicians and the public as competition in this sector increases. Susanne Warning provides a comprehensive analysis of the strategic positioning of public universities as service providers in a competitive sector.

The author develops two distinct theoretical approaches to the analysis of public universities. The first is the concept of strategic groups, originating in management theory. It implies that due to different returns on investment in teaching quality and research quality, heterogeneity will exist in the university sector. The second approach involves a three-stage duopoly game of competition between universities, and is underpinned by the industrial economics literature. Universities in this formal equilibrium model of differentiation position themselves in terms of teaching and research quality in order to attract students. Although the analysis is based on data for German publicly funded universities, however, the author’s conclusions offer important insights for all countries where publicly funded universities play a role, particularly in the current climate of shifts towards more competitive university systems.

With an exclusive combination of economic analysis and institutional data, this book will prove invaluable for anyone with a particular interest in the economics of higher education.
Critical Acclaim
‘. . . the book offers some interesting insights into the specific position of public universities within an increasingly differentiated higher education system. . . The book addresses interesting research questions with strong relevance to higher education policies.’
– Vincent Carpentier, London Review of Education

‘The ideas, arguments and the theoretical and empirical tools developed in this book will be useful for further research in the higher education sector not only in Germany but also in rest of the world. Hence, with an exclusive combination of economic analysis and institutional data, this book will prove invaluable for anyone with a particular interest in the area of economics of higher education.’
– Pradeep Kumar Choudhury, Journal of Educational Planning and Administration

‘A reader not only learns about Germany’s system of higher education, but also is provoked into thinking about how product differentiation and strategic positioning increasingly affect the performance of colleges and universities worldwide.’
– John Siegfried, Vanderbilt University, US

Contents
Contents: Preface 1. Introduction 2. German Higher Education – Facts and Figures 3. A Review of the Literature 4. Strategic Groups in Higher Education 5. A Model of Competition: Positioning in the University Sector 6. Performance of German Universities: A DEA Approach 7. Teaching and Research as Strategic Variables of German Universities 8. Concluding Remarks Bibliography Appendices Index
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