Productivity and efficiency in Spanish regional university systems in 2009-2013

In recent years, the Spanish economic crisis has led to a significant reduction of regional budgets for tertiary education. The level of funding for the whole public university system has dropped a 12% in the period 2009-2013. It is mainly due to the current transfers decrease, which is its main source of funding. Autonomous communities have followed an increasing credit prices policy with the aim of compensating the incomes loss. Considering the principles of income adequacy, stability and flexibility of the financial model, regional government's decisions have pursued different policies. Some have noticeable increased credit prices achieving a significant growth of private incomes, while others have kept the price on credit. Thus, a new financing model is being set up, and it tends to provide a greater self-financing capacity to public universities. Within this economic context, in which universities must adapt their management strategy to the new financial structure, this work aims to define a production function from a financial perspective for the regional university systems, to estimate the level of technical efficiency and to analyze the productivity change from 2009 to 2013. In regard to the production function definition, it is remarkable that unlike the existing literature, this article proposes a statistical process of selection of variables applicable to other studies that using the DEA methodology. The results obtained in this statistical analysis have allowed to define the production function that approximates the efficiency of the regional public university systems from a financial point of view. In this study is used the Data Envelopment Analysis, which is widely used to assess technical efficiency of university systems at an international and national level. This methodology is a non-parametric technique that allows the construction of an efficient frontier based on the best practices observed, considering the inputs and outputs that are involved in the production process. In this way, a relative measure of the efficiency of evaluated units is obtained. Units placed on the frontier will be considered efficient and those located below will measure their inefficiency from the distance that separates them from the frontier. Regarding to the measurement of productivity change, it is used the Malmquist Index. It allows to decompose the productivity change into two components: technical efficiency change and technological progress change. The production function is defined by funding as input variable and students and articles pondered by an impact factor as outputs. The correlations analysis lets corroborate its appropriateness for this case study. Efficiency scores evince an increasing room for improvement between 2009 and 2013. In fact, the volume of efficient Autonomous Communities decreases in such length of time. The only ones that have been capable to keep an efficient score are Baleares and La Rioja regions. Results suggest that there is no a relationship between de financial model implemented in the Autonomous Community and the efficiency score achieved. This could indicate that current funding models are not geared towards efficiency in the resources management. Finally, financial reductions experimented by the regional university systems, have supposed, in the short term, an approach to the optimum scale of production as well as an improvement of the technical frontier. However, there is a worsening of technical efficiency for most of the Spanish public university system.