Efficiency and economies of scale in academic knowledge production

This paper investigates the properties of knowledge production in academic research using a panel of 17 OECD countries reaching from 1989 to 1996. The production process is modelled using capital and labour as inputs and the number of published international journal articles and/or the number of graduates as outputs. First, we test for the existence of economies of scale in academic research. Our results give indication for decreasing returns to scale in the production of new academic knowledge. This empirical result might contribute to the recent controversy on the properties of the innovation technology used in endogenous growth models. Second, we determine efficiency scores for each individual country. For the estimation of efficiencies we apply parametric and non-parametric methods. Although results differ slightly with the method used, a stable efficiency ranking is found.