Cross-country analysis of higher education institutions’ efficiency: The role of strategic positioning Tommaso Agasisti 1 and Jasmina Berbegal-Mirabent 2, * 1 School of Management, Politecnico di Milano, Via Lambruschini 4B, Milano, 20156, Italy and 2 Department of Economy and Business Organization, Universitat Internacional de Catalunya C. Immaculada, 22, Barcelona, 08017, Spain *Corresponding author. E-mail: jberbegal@uic.es Abstract Universities are highly heterogeneous institutions and this diversity needs to be acknowledged when assessing their performance. Using an unbalanced panel that covers a 3-year period (2011– 3) with 761 observations coming from 307 universities located in 8 European countries, this study examines the extent to which strategic choices regarding international positioning and scope de- termine how efficient universities are in the allocation of their internal resources. Three main groups of universities are identified, according to their internationalisation and scope: world-class, flagship, and regional. Next, we model universities’ objective function as a mix of teaching, re- search, and third mission endeavours, and calculate efficiency scores. A meta-frontier analysis based on data envelopment analysis is used. This approach allows comparing efficiency frontiers across groups and relative to a common frontier. Policy implications within and between groups are discussed. Key words: efficiency; higher education institutions; international comparison; strategic positioning 1. Introduction Universities are key actors in promoting the economic development of countries (Hanushek 2016), and serve as a major source for fostering innovation and well-being (Smith 2007). For this reason, policy mak- ers care about the performance of universities, and invest resources and energies to make them more productive and able to provide the society with the necessary levels of teaching and research. Therefore, the financial crisis in 2008 and subsequent years posed severe chal- lenges for public budgets to be dedicated to the development of uni- versities’ activities. In this vein, academic institutions are asked to improve their efficiency, through increasing their ability to produce more results (graduates, publications, applied research projects, etc.) with the available resources—and, in many cases, even to work with less resources. The issue of universities’ productivity is particularly stark in Europe, as previous studies demonstrate that European ones have lower performance than their US counterparts (Aghion et al. 2010), the regulation setting being one major cause of this difference. A recent study by Wolszczak-Derlacz (2017) also suggests that US 4- year academic institutions are slightly more efficient (not only highly performing) than European ones, the latter being also characterised by higher heterogeneity. The European Commission is well aware of the necessity of strengthening the efficiency and effectiveness of higher education in the Area, and dedicated one specific stimulus to this ob- jective in its last Communication to Member States (European Commission 2017). Universities are not at all similar to each other, thus. They have very different traditions and using their operational and strategic au- tonomy (Fumasoli et al. 2014), they develop their activities in quite heterogeneous way. To the extent that universities are conceived as autonomous organisations, they can develop specific strategies and diversified plans which can result in different mixes of teaching, re- search, and engagement with society. In this vein, the evaluation of their performance cannot assume that each institution is pursuing the same objectives, and hypotheses can be formulated about the re- lationship between strategic choices and performance/efficiency. Strategic choices can be thought, in first approximation, to deal with the orientation towards internationalisation and/or regional needs, that is, to the primary needs to be served and goals to be reached. According to this choice, universities then adjust their ‘mis- sion-mix’, that is, the intentional decision to devote priority, atten- tion, and effort to one or more of the missions described above— teaching, research, and third mission—for coherence with the stra- tegic goals of international/regional positioning (a description of this dynamic is in the Section 2.1). V C The Author(s) 2020. Published by Oxford University Press. All rights reserved. For permissions, please email: journals.permissions@oup.com 1 Science and Public Policy, 2020, 1–14 doi: 10.1093/scipol/scaa058 Article Downloaded from https://academic.oup.com/spp/advance-article/doi/10.1093/scipol/scaa058/6032846 by guest on 13 May 2021