Mergers boost efficiency, research suggests

Higher education institutions tend to be more efficient post-merger, suggesting that such activity is “positive”, according to research.

The typical merged institution is more efficient than its constituent parts and those that are unmerged, says a paper by Jill Johnes, lecturer in economics at Lancaster University Management School.

However, her paper also points out that since the characteristics of pre-, post- and non-merging institutions can vary considerably, “the efficiency differences may be a consequence of something other than the merger”.

A number of higher education mergers have taken place in recent years. Notable examples include London Metropolitan University (formed from the union of the University of North London and London Guildhall University in 2002) and the University of Manchester (created when Victoria University of Manchester and the University of Manchester Institute of Science and Technology joined forces in 2004).

The Welsh government, in particular, has seen mergers as a way to improve university performance.

The study, published online in economics journal The Manchester School, considers 19 mergers in the English academy between 1996-97 and 2008-09.

It calculates university efficiency by looking at “inputs” and “outputs” constructed from Higher Education Statistics Agency data.

Inputs include student numbers and entrants’ average A-level scores, academic numbers and infrastructure spending. Outputs include the number of first-class degrees awarded and research income.

The efficiency results suggest that “former colleges of higher education and post-1992 [bodies] are, on average, more efficient than their pre-1992 counterparts”, although this may be a consequence of many pre-92s “being involved in teaching medical and veterinary sciences”, which are resource-intensive.

The study concludes: “Of particular interest to institutions considering merger is the result that the typical merged HEI is significantly more efficient than either pre-merger or non-merging HEIs, suggesting that…merging is a positive activity.”

john.morgan@tsleducation.com