Findings on economies of scale in higher education: Implications for strategies of merger and alliance

Abstract

Studies on economies of scale seek to establish at what size an institution functions at an optimal level of efficiency. Higher education mergers produce an increase in the scale and scope of an institution, and are commonly driven on an expectation of economic benefit. To what extent are greater value for money, savings in government expenditure, significant institutional financial benefit, achieved through the pursuit of economics‐of‐scale‐focused policies? The paper investigates the varied findings of sixteen studies into economies of scale and scope in higher education, associated cost factors and cost/size relationships, and considers the strategic implications.