Economies Of Scale And Scope Of Economic Phenomena In The College Enrollment Process Directly Under The Ministry Of Education, Colleges And Universities - Also On The Appropriate Scale

Universities (i.e. as in the case of almost all Chinese universities) can be viewed as typical multi-product organizations because they produce multiple products (i.e. undergraduate teaching, graduate teaching, research and often public service as well). A flexible fixed-cost quadratic function is employed to estimate multiple-outputs cost functions and calculate economies of scale and scope for Chinese universities in the year 1999-2001. Also through comparative static analysis, this paper discusses how to decide appropriate university scale.This paper is divided into five parts, it is more than 38,000 words altogether besides introduction.Part one has especially paid close attention to two questions: (1) Relation among economies of scale and returns to scale. Returns to scale changes must change with proportion to input, however, the economies of scale only requires the relation among the enlargement of the comparative scale and unit cost. Under a perfect competition condition, it will exhibit economies of scale that the returns to scale increase progressively; it will exhibit diseconomies of scale that the returns to scale decrease progressively. (2) Different from economies of scale, the economies of scope are not often the result that the firm pursues sedulously. Frequently, the firm confirms how many kinds of products are produced, concerning the enlargement of the occupation rate of market and how to reduce the risk.Part two is a review of some seminal research of the economies of scale and scope of institution of higher education. The results of theses research shown that the public university and private university have obviously different cost function, economies of scale phenomenon exist on different kinds of universities, but economies of scope have different form of expression across the countries. Almost all the researches show that the quality factor should offer more attention, but because of the difficulty to measure quality, few study has taken into account.The principal concern of the third part has been to examine whether economies of scale and scope existed in Chinese universities. Results from our estimates suggest a number of important and practical implications for policy-makers in Chinese higher education. (1) Our results indicate that there are cost complementarities between graduate teaching and teachers' salaries, but cost complementarities do not exist between graduate teaching and research. (2) After enrollment expansion, ray, undergraduate teaching and research are all changed from 1999 diseconomies of scale to 2001 economies of scale. There are five sources of economies of scale, first, the teaching thrift of cost. Before enrollment expansion, the resources of university were not fully utilized. Second, management thrift of the cost. After enrollment expansion, the service efficiency is improved. Third, thrift of transaction cost. So long as the transaction cost economized is greater than organization's administrative expenses increased, university will exhibit economies of scale. Fourth, The teachers of different discipline can carry on knowledge to exchange cheaply. The multi-disciplinary atmosphere helps students to obtain the knowledge in many aspects. Fifth, the university has carried on extensive system reform. (3) Global, research have all changed from 1999 diseconomies of scope to 2001 economies of scope. Namely, in general, the subordinate university of Ministry of Education jointly trained undergraduates, the graduate student trained and the scientific research activity was uneconomical in 1999, separating has efficiency even more independently. But by 2001, it shows efficiency when undergraduate, graduate student and research activity are organized in university at the same time. How to decide the appropriate scale of university is discussed in the fourth part. It is analyzed in two ways. (1) The results of our research shown that the different kinds of universities and colleges, with the expansion of enrollment; the economies of scale has caused cha...