EFFICIENCY AND TOTAL FACTOR PRODUCTIVITY GROWTH OF PUBLIC CHARTERED UNIVERSITIES IN KENYA
Abstract
Purpose of the study: The study aimed at assessing efficiency and growth in productivity of public universities in Kenya from 2017/2018 to 2021/2022 academic years.
Problem statement: University education is critical in economic development. Public universities are funded by government. Despite of their importance, Kenyan public universities face huge funding gaps which have affected their efficiency and productivity over time.
Methodology: The study employed the Malmquist Index to evaluate total factor productivity growth of public chartered universities in Kenya. Additionally, a two-stage Data Envelopment Analysis was used to determine the technical efficiency of these institutions.
Findings: The study found out that average TE score of 31 DMUs was 0.760. Out of the 31 public universities only 11 public universities were found to be technically efficient. The DMUs recorded a mean TFP growth of 0.018 representing a decline by 98.2%. TFP change was driven more by technical progress. Employee cost negatively affected technical efficiency while other variables positively influenced efficiency.
Conclusion: The study concluded that the public universities experienced negative growth in total factor productivity and overall, they were technically inefficient.
Recommendations: The study recommends that public universities should strive to improve their performance by 24% without altering their current input levels, while the government should rationalize staffing and increase funding to address financial challenges. Policymakers should prioritize efficient resource allocation strategies and set targets for monitoring efficiency changes in universities over time. Additionally, universities should be encouraged to develop innovative ways of generating internal revenue to supplement their income, given the current financial constraints.
Keywords: Total factor productivity, technical efficiency, decision making unit, data envelopment analysis, public chartered universities, Kenya
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