Approaching effects of the economic crisis on university efficiency: A comparative study of Germany and Italy

In this paper, we compare the efficiency of the Italian and German university system in the process of translating public funding into the multiple outputs of a university, i.e. graduating students, publishing research, and patenting activity. We do this with a particular focus on the policies implemented following the financial crisis in 2007/08. Using a sample of 133 public universities, of which 73 public universities in Germany and 60 public Italian universities, observed over the period 2006-2011, we find that Italian universities are significantly better in terms of cost efficiency than German universities. The crisis does not show a general impact, while the treatment effect indicates that Italian universities coped better during the crisis than their German counterparts at a highly significant level.