University merging process

  1. Marisa Hidalgo-Hidalgo 1
  2. Guadalupe Valera 1
  1. 1 Universidad Pablo de Olavide
    info

    Universidad Pablo de Olavide

    Sevilla, España

    ROR https://ror.org/02z749649

Revista:
Working papers = Documentos de trabajo: Serie AD

Ano de publicación: 2013

Número: 1

Páxinas: 1-36

Tipo: Documento de traballo

Resumo

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.