Is it worth it? Using DEA to analyze the efficiency gains and costs of merging university departments: a case study of the Complutense University of Madrid

Abstract

The aim of this paper is to analyze the benefits of the university department merger undertaken by the Complutense University of Madrid (UCM) in 2017. The merger led to a new structure in which the original 184 departments were reduced to 97. To do this, we use the data envelopment analysis (DEA) to evaluate the efficiency gains of a merger process decomposing efficiency into three savings effects: learning, harmony, and scale effects. They decomposed efficiency into three savings effects: learning, harmony, and scale effects. Additionally, we introduce a new regulatory effect, which accounts for other potential recursive savings not included in the DEA analysis. Our results suggest that the merger process undertaken by the UCM achieved savings of around 20.5 million euros, approximately 6.6 million euros, which is accounted for by the regulatory effect. These savings will reproduce and accumulate annually over time. The results also show that, as a result of the intense negotiations, academic staff based at faculties engaged in the merger process may have taken more days of sick leave than academics from unmerged faculties in 2017, although the increase is not significant at standard levels.