Do merger policies increase universities’ efficiency? Evidence from a fuzzy regression discontinuity design

This paper focuses on the effect of merger policies in Russia on universities’ efficiency. We consider one particular policy of non-voluntary mergers conducted by the Ministry of education based on universities’ performance indicators. In a first stage, efficiency scores of universities are estimated using a bootstrapped DEA non-parametric technique. The efficiency scores were evaluated for universities that were merged and for an appropriate control group formed through a propensity score matching approach before and after implemented policy. Then, a fuzzy regression discontinuity design is implemented in order to reveal the causal impact of mergers on efficiency level. We find positive, statistically significant effect of merger policy on universities’ efficiency. The results of the analysis suggest that merged universities experienced greater efficiency gains (smaller efficiency declines) after the merger was implemented.