Do universities which merge become more efficient post-merger?

What is it about?

This highly original paper develops a dynamic model of inefficiency and merger the estimation of which relies on Bayesian techniques organized around the use of Markov chain Monte Carlo, in order to investigate whether merging leads to greater efficiency.

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Photo by Tim Gouw on Unsplash

Photo by Tim Gouw on Unsplash

Why is it important?

The novelty of the method lies in the fact that it explicitly takes into account the possibility of a two-way relationship between merger and efficiency. The methodology itself can be extended to applications in other sectors. The work is rigorous in that it looks at the evolution of efficiency effects as they arise in the periods following the merger event.