Economies of Scale and Scope in Japanese Private Universities

Abstract

A flexible fixed-cost quadratic function is employed to estimate multiple-output cost functions for 94 private universities in Japan for the year 1991. The three outputs employed are undergraduate teaching, graduate teaching and research. Our results provide evidence of ray economics of scale and both global and product-specific economies of scope. Product-specific economics of scale are shown for undergraduate and graduate teaching in relatively small universities and for research in relatively large universities. Implications of the findings are discussed.