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Efficiency Analysis of Public

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a a
Saranya Kantabutra & John C. S. Tang
a
School of Management , Asian Institute of Technology , Thailand
Published online: 10 Mar 2010.

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Public Universities in Thailand, Tertiary Education and Management, 16:1, 15-33, DOI:
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 Tertiary Education and Management
Vol. 16, No. 1, March 2010, pp. 15–33

Efficiency Analysis of Public

Universities in Thailand
Saranya Kantabutra and John C. S. Tang*
School of Management, Asian Institute of Technology, Thailand
0Tang@ait.ac.th
Professor
00000March
Tertiary
10.1080/13583881003629798
RTEM_A_463488.sgm
1358-3883
Original
Taylor
12010
16 and
& JohnTang
2010and Management
Education
Article
Francis
(print)/1573-1936
Francis (online)
Downloaded by [University of Boras] at 20:52 05 October 2014

This paper examines the performance of Thai public universities in terms of efficiency, using a
non-parametric approach called data envelopment analysis. Two efficiency models, the teaching
efficiency model and the research efficiency model, are developed and the analysis is conducted at
the faculty level. Further statistical analyses are also performed to examine the difference in
performance between two types of public universities, namely the government universities and the
autonomous universities. Then, the differences in efficiency between university locations and
types of faculties are examined. The results indicate that the autonomous universities outperform
the government universities in terms of research efficiency. In addition, the universities in provin-
cial areas and the faculties in the health science group are efficient in terms of teaching. Recom-
mendations are also provided for the university administrators to improve the performance of
public universities in Thailand.

Introduction
Quality education is one of the critical pillars sustaining the well-being of a country
and its people. The performance evaluation of higher education institutes (HEIs)
has, therefore, attracted considerable attention from many researchers. With the
advent of the globalization era, the need for performance evaluation of HEIs has
been even more intensified. International competitions necessitate a self-evaluation
for every country that wants to compete on an even footing on the world stage. Fully
realizing the importance of higher education, the Thai government has set out to
overhaul the tertiary education in Thailand in order to remain competitive in the
global economy. As a result, the transformation of the Thai public universities from
the bureaucratic system has begun and several reforms have been initiated. These
transformed universities are generally referred to as autonomous public universities.

*Corresponding author. School of Management, Asian Institute of Technology, Klong Luang,

Pathumthani 12120, Thailand. Email: tang@ait.ac.th

ISSN 1358-3883 (print)/ISSN 1573-1936 (online)/10/010015–19

© 2010 European Higher Education Society
DOI 10.1080/13583881003629798
 16 S. Kantabutra and J. C. S. Tang

In this study, the authors aim to evaluate the efficiency of two types of Thai public
universities, namely the government public universities and the autonomous public
universities. Efficiency is defined in this study as how well the HEIs utilize their
existing academic resources to produce the maximum level of academic outputs. An
efficiency assessment of Thai public universities is essential because annually
approximately 65% of the higher education budget goes solely to subsidizing public
universities (Commission on Higher Education [CHE], 2008). More precisely, the
authors want to comparatively examine efficiency at the faculty level of government
public universities and autonomous public universities. In addition, the authors also
want to examine whether university locations and types of faculties affect efficiency.
Efficiency analyses of HEIs have been conducted in various countries using a non-
parametric approach called data envelopment analysis (DEA). DEA has been widely
used as a performance evaluation tool in different types of organizations such as
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business firms, governmental entities, and non-profit organizations (Cooper,

Seiford, & Tone, 2006). Using DEA, multiple inputs and outputs of the organiza-
tions can be simultaneously evaluated, unlike regression analysis that can handle
only one output at a time. The linear programming technique is used in the DEA
approach to calculate a single index called efficiency score for each unit under analy-
sis. The performance of each unit is assessed by comparing these efficiency scores.
Units that are relatively efficient have their efficiency scores equal to 1 and they can
be used as a reference group in the analysis. Therefore, the DEA technique also
provides a benchmark for improving performance of the inefficient units by either
expanding the production of outputs or reducing the consumption of inputs,
depending on the objective of the analysis.
Since research in performance evaluation of public universities and other types of
HEIs in Thailand is very rare, this study provides a framework to assess the effi-
ciency of public universities in Thailand. It also provides empirical results that
enable the university administrators to develop performance-based policies to
improve the performance of Thai public universities.
The rest of this paper is divided into five sections. Background of the Thai higher
education system is discussed in the next section. Literature reviews in the following
section survey earlier studies on efficiency in higher education. Subsequently, data
and methods are described, followed by results and discussion. Finally, a conclusion
and policy implications are presented.

Background of the Thai Higher Education System

Higher education in Thailand started in the nineteenth century with the main objec-
tive of producing personnel for the civil service. The first five public universities were
founded in Bangkok between 1917 and 1942. To decentralize higher education,
three provincial public universities were later established in the 1960s. From the
1970s to the 1990s, more public universities were formed through either the amal-
gamations of colleges or the upgrades of colleges to university status by the Ministry
of Education. Many private universities were also founded during this period in
 Efficiency Analysis of Public Universities in Thailand 17

Bangkok and provincial areas. Currently, there are 67 private HEIs and 96 public
HEIs in Thailand (CHE, 2007).
Educational expenses for attending a public university are considerably lower than
those for a private university because the Thai government spends approximately
17% of the annual education budget on subsidizing public HEIs while private
universities receive nothing. Approximately 65% of the higher education budget is
used to subsidize public universities, which are categorized into government and
autonomous universities (CHE, 2008).
In 1999, the House of the Representatives passed the National Education Act
with the goal of developing Thailand into a knowledge-based society. Public univer-
sities are facing major transitions in many areas. To increase flexibility, efficiency,
and accountability in university management, a reform of structure and administra-
tive systems has been initiated. To produce university graduates who can respond to
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societal needs and to strengthen quality research activities, a reform of teaching and
research systems has also begun (Office of Education Council [OEC], 2003).
Government universities in Thailand operate under the bureaucratic system with
many restrictions and rules, which are also applied to the other civil service agencies.
Such rules and regulations lead to an inefficient management structure in the
government universities. Moreover, the salary structure of faculty members in the
government universities is much lower in comparison with those in the private
sector, which generally makes it difficult for these universities to attract and keep
excellent professors. Thus, the transformation of government universities to autono-
mous universities has been strongly encouraged by the government to promote
operational flexibility and efficiency (Kirtikara, 2001).
Autonomous public universities, unlike government public universities, are
allowed to independently set their own regulations related to academic affairs,
personnel administration, and budget and asset managements (Chandarasorn,
2002; Kirtikara, 2001). Autonomous universities can set their own salary scales that
are normally higher than those of government universities. To justify the high sala-
ries, a performance evaluation and a periodic renewal of work contracts are strictly
enforced under the autonomous system. On the other hand, the personnel of
government universities acquire permanent work employment until the age of 60
without rigorous performance assessments (Kirtikara, 2004). This study attempts to
propose a framework to evaluate public universities in Thailand in terms of opera-
tional efficiency. A performance comparison between government universities and
autonomous universities is also conducted with a view to enhancing the performance
of Thai public universities.

Literature Reviews
In this section, previous studies on efficiency in higher education are surveyed. More
specifically, we look into the two most popular techniques for estimating efficiency
in higher education: stochastic frontier estimation (parametric) and data envelop-
ment analysis or DEA (non-parametric) (Salerno, 2003). The first subsection
 18 S. Kantabutra and J. C. S. Tang

discusses all literatures using stochastic frontier estimation to evaluate efficiency in

HEIs. We then discuss literatures using DEA in higher education in the second
subsection.

Efficiency Studies Using Stochastic Frontier Estimation

Traditionally, stochastic frontier estimation has been used to estimate the efficiency
of a firm. The level of technical efficiency of a particular firm is often characterized
by the relationship between observed production and some ideal production
(Herrero & Pascoe, 2002). The measurement of firm-specific technical efficiency is
based upon deviations of observed output from the best production or the so-
called efficient production frontier. If a firm’s actual production point lies on the
frontier, it is considered efficient. If it lies below the frontier, it is technically
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inefficient.
In the higher education context, many literatures applied the stochastic frontier
estimation technique to determine efficiency. A study by Robst (1997) examined the
relationship between the size of the university system and efficiency in US higher
education in a frontier cost function framework. The results showed that larger
university systems were more efficient than smaller university systems. Recognizing
that each institution likely faced a different cost function, Johnes and Johnes (2009)
used methods that had recently become available to estimate frontier cost functions
for higher education institutions within the context of a random parameter model.
By allowing parameters to vary across institutions, different cost functions can be
estimated within a single and unified framework. Stochastic frontier analysis was
also used to examine the costs and efficiency of English and Welsh higher education
institutions as suppliers of teaching and research in Stevens (2005). This study
investigated the impact of staff and student characteristics on efficiency and found
convergence in the inefficiency of institutions, implying that less efficient institutions
were “catching up” with those nearer to the cost frontier. Mensah and Werner
(2003) examined the relationship between financial flexibility and institutional
efficiency using the method of stochastic frontier function. The degree of financial
flexibility was used as a measure of the degree to which institutional performance
may be constrained by donor restrictions. Their results showed a positive relation-
ship between the degree of financial flexibility and cost inefficiency for all types of
US private higher education institutions. In Taiwan, the implementation of the so-
called university operation fund was introduced to reduce the government’s financial
burden by increasing cost efficiency in higher education institutions. Researchers in
Taiwan used the stochastic frontier multiple-product cost function to study the cost
efficiency impact of the university operation fund on 34 public universities (Kuo &
Ho, 2008). They empirically showed that the adoption of the university operation
fund had a significantly negative impact on cost efficiency. Agasisti and Johnes
(2008) studied the efficiency of Italian universities. They considered a random
parameter stochastic frontier model, applied it in the context of the Italian higher
education system, and uncovered some very substantial inter-university differentials
 Efficiency Analysis of Public Universities in Thailand 19

in the cost of providing education to non-science undergraduates as well as in the

cost of undertaking research.

Efficiency Studies Using Data Envelopment Analysis

Previous studies on efficiency evaluations of HEIs with DEA have been conducted
in many countries such as the UK (Glass, McCallion, McKillop, Rasaratnam, &
Stringer, 2006; Johnes, 2006; Johnes & Johnes, 1995), Norway (Førsund &
Kalhagen, 1999), Germany (Fandel, 2007; Warning, 2004), Spain (Caballero,
Galache, Gómez, Molina, & Torrico, 2004), the Netherlands (Cherchye & Abeele,
2005), Finland (Korhonen, Tainio, & Wallenius, 2001), the USA (Bougnol & Dulá,
2006; Colbert, Levary, & Shaner, 2000; Moreno & Tadepalli, 2002), Australia
(Abbot & Doucouliagos, 2001, 2003; Avkiran, 2001; Carrington, Coelli, & Prasara
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Rao, 2005), and Taiwan (Kao & Hung, 2008; Kuo, Kuo, & Ho, 2005). In these
studies, DEA has been applied as an approach to assess efficiency, by which effi-
ciency was defined as the ability of each HEI, relative to other HEIs under consider-
ation, to utilize its academic resources at a minimum level to produce an optimal
level of educational outcomes. Staff, capitals, equipments, and spaces were mostly
used as measurements of academic resources. Educational outcomes were differ-
ently measured depending on the objectives of the studies. Some studies considered
the combination of teaching and research outputs as educational outcomes (Abbott
& Doucouliagos, 2003; Avkiran, 2001; Carrington et al., 2005; Fandel, 2007;
Førsund & Kalhagen, 1999; Glass et al., 2006; Johnes, 2006; Kuo et al., 2005;
Moreno & Tadepalli, 2002; Warning, 2004). Others considered only research
outputs (Bougnol & Dulá, 2006; Cherchye & Abeele, 2005; Johnes & Johnes, 1995;
Korhonen et al., 2001) or teaching outputs (Abbott & Doucouliagos, 2001;
Caballero et al., 2004; Colbert et al., 2000).
In previous studies, measurement variables for academic resources represented
only a quantity of utilized resources such as the number of staff or the value of fund-
ing. Academic outcomes, on the other hand, should reflect both the quality and
quantity of the outputs (Abbott & Doucouliagos, 2003; Carrington et al., 2005;
Cherchye & Abeele, 2005; Glass et al., 2006; Johnes, 2006; Johnes & Johnes, 1995;
Korhonen et al., 2001). In the efficiency evaluation of HEIs, units of analysis could
be universities, academic departments, research units, administrative units, or the
graduates. Since the DEA model can be constructed as input orientation or output
orientation, this choice thus depends on the objective of the study. The input-
orientation model was developed when the study focused on the efficiency of
academic resource utilization. On the other hand, the output-orientation model was
normally employed in the investigation of efficiency in producing academic
outcomes.
Results from previous efficiency studies vary due to different study objectives.
Some studies broadly examined efficiency of HEIs. Avkiran (2001) and Abbot and
Doucouliagos (2003) reported that Australian universities operated at a high level of
efficiency. Abbot and Doucouliagos (2001) studied the efficiency of colleges of
 20 S. Kantabutra and J. C. S. Tang

advanced education (CAEs) in Australia during the 1980s and found that the effi-
ciency growth of the CAEs was low, which might be due to the fact that these CAEs
already operated at a high level of efficiency. Ahn, Charnes, and Cooper (1988),
Kuo et al. (2005), and Johnes (2006) comparatively assessed efficiency between
different types of universities such as public versus private universities. The studies
indicated that there are differences in the efficiency levels of different types of
universities. Other studies examined the efficiency of academic departments within a
specific university. The inefficient departments were reported and their potential
improvements in terms of input utilization or output productions were identified
(Kao & Hung, 2008; Moreno & Tadepalli, 2002; Sarrico & Dyson, 2000; Sinuany-
Stern, Mehrez, & Barboy, 1994). Sinuany-Stern et al. (1994) used efficiency results
to justify the departmental merging policy and concluded that merged departments
could result in either higher or lower efficiency levels, depending on the departments
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merged. DEA can also be applied to justify the government policy regarding HEIs.
Førsund and Kalhagen (1999) reported that the merging of regional colleges in 1994
as a consequence of the government policy to overhaul higher education resulted in
higher efficiency. DEA efficiency evaluation of UK universities in Glass et al. (2006)
supported the government policy goals for public universities to expand their sizes
and to specialize in either teaching or research. Fandel (2007) justified the results of
funding distribution among universities in Germany by examining their efficiencies.
Colbert et al. (2000) and Bougnol and Dulá (2006) also used DEA efficiency scores
to rank MBA programs and research universities in the USA, respectively. Results
from efficiency studies can also be used as criteria for resource allocation, such as
allocating more resources to the efficient units or re-allocating resources from the
over-utilized units to those that were under-utilized (Avkiran, 2001; Calballero
et al., 2004; Korhonen et al., 2001; Moreno & Tadepalli, 2002).
In addition to investigating the efficiency of HEIs, some studies attempted to
identify factors that influenced efficiency. Warning (2004) and Carrington et al.
(2005) found that a university’s location had a significant impact on research and
teaching efficiency. Førsund and Kalhagen (1999) concluded that teaching effi-
ciency varied in different types of departments. Cherchye and Abeele (2005)
reported that types of universities significantly affect research performance. Simi-
larly, in Kuo et al. (2005), types of universities and types of departments were found
to significantly influence the operational efficiency of the universities in Taiwan.

Data and Methods

This section identifies the weaknesses of previous studies that used stochastic fron-
tier estimation and supports the use of DEA in determining the efficiency of HEIs.
Stochastic frontier estimation has been used widely in higher education and other
contexts. The often quoted advantage of this technique is its applicability of statisti-
cal inference. But this advantage also comes at a price. The stochastic frontier
estimation imposes an explicit functional form and distribution assumption on the
data. Hence, it is prone to misspecification. Moreover, stochastic frontier estimation
 Efficiency Analysis of Public Universities in Thailand 21

is not easily applied in the context of higher education, where there are multiple
inputs and outputs. In contrast, DEA is a non-parametric approach and uses linear
programming methods to assign an observation-specific set of weights to outputs
and inputs such that the ratio of weighted output to weighted input is maximized for
each observation, subject to certain constraints. This ratio can then be used as a
measure of efficiency. Unlike the method of stochastic frontier estimation, each
observation in DEA comes with its own set of weights (i.e., coefficients). Recogniz-
ing that each observation is different is indeed a salient aspect of the DEA. In
addition, DEA can help identify the best practice among the HEIs under study.

Data Envelopment Analysis

DEA was used in many previous studies to investigate the technical efficiency of
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organizations such as bank branches, hospitals, retail stores, schools, or military

units (Cooper et al., 2006). This technique was developed in 1978 by Charnes
Cooper and Rhodes to evaluate non-profit and public organizations (Avkiran, 2001;
Colbert et al., 2000). Generally, most organizations utilize many resources or inputs
to produce different types of outputs. Therefore, the DEA is considered a better
approach than other statistical techniques such as regression analysis since it can
handle multiple inputs and outputs simultaneously (Colbert et al., 2000; Johnes,
2006; Johnes & Johnes, 1995; Sarrico & Dyson, 2000). Moreover, the DEA can also
be used to differentiate efficient units from inefficient ones. These units in turn can
be used by policy makers as performance benchmarks or reference groups to
measure against the performance of other units under consideration in order to iden-
tify the potential of efficiency improvement (Cooper et al., 2006).
When the DEA is used to evaluate efficiency, units under consideration must be
homogenous, that is, using the same types of inputs to produce the same types of
outputs, and are usually called decision making units or DMUs. The DEA uses a
linear programming technique to calculate the efficiency score for each DMU and to
identify a benchmark or an efficient frontier based on the data of DMUs under
consideration (Colbert et al., 2000; Sarrico & Dyson, 2000). A DEA model can be
input- or output-oriented depending on the objective of the analysis at hand. An
input-oriented model focuses on reducing input amounts by as much as possible
while keeping at least the current level of outputs. On the other hand, an output-
oriented model tries to maximize output amounts by using the current input level
(Johnes, 2006). An example of efficiency analysis using an output-oriented model
for four DMUs (A, B, C, D) that use one input to produce two outputs (Y1, Y2) is
displayed in Figure 1.
From Figure 1, the efficient frontier is derived from the DMUs that can produce
Figure 1. A two-output, one-input efficient frontier

the maximum level of outputs with the existing level of input, which are DMUs A
and B. These two DMUs are considered efficient or exhibit the best practice. On the
other hand, DMUs C and D, which do not lie on the frontier, are the units that
produce fewer outputs with the same amount of input, compared to DMUs A and
B. DMUs C and D are thus relatively inefficient. In this approach, the efficient or
 22 S. Kantabutra and J. C. S. Tang
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Figure 1. A two-output, one-input efficient frontier

inefficient units are considered relative as they are comparatively measured with
other DMUs. In addition, if any DMU is excluded from the study, the efficient
frontier may change (De Lancer Julnes, 2000; Sherman & Zhu, 2006).
The efficiency score is calculated by a ratio of the distance to where an individual
DMU lies and the distance to where it is supposed to be if it is efficient (Førsund &
Kalhagen, 1999; Johnes & Johnes, 1995). In this example, the efficiency scores of
DMUs A and B are equal to 1 since both of them lie on the efficient frontier (Glass
et al., 2006). The efficiency score of DMU C is OC/OC′ and that of DMU D is OD/
OD′. Thus, the efficiency scores of the inefficient units, C and D in this example, are
less than 1 (Førsund & Kalhagen, 1999; Johnes & Johnes, 1995). To be more
specific, the efficiency scores of the DMUs in the analysis are the real numbers,
ranging from 0 to 1. The ratios of OC/OC′ and OD/OD′ also represent the potential
proportionate increment in outputs of DMUs C and D using the given level of input
in order to become efficient.

Analytical DEA Model

In this study, two DEA models to measure teaching and research efficiencies were
each developed to assess the efficiencies of public universities in Thailand. Unlike
some of the previous studies, this study did not develop an overall performance
model that uses both teaching and research outputs. The individual assessment of
teaching and research efficiencies should provide more insight in the Thai higher
 Efficiency Analysis of Public Universities in Thailand 23

education context as a further analysis could be performed to investigate whether

teaching and research performances complement each other. Moreover, two DEA
models can also differentiate research-efficient and teaching-efficient faculties.
Since the objective of this study was to maximize the production of teaching and
research outputs, the output-orientation models to assess the efficiency of Thai
public universities were developed. The selection of input and output variables in
our teaching model was based on the studies of Abbot and Doucouliagos (2001) and
Warning (2004), both of which examined teaching efficiency of HEIs. In addition,
the studies of Korhonen et al. (2001) and Cherchye and Abeele (2005), which
assessed the efficiency of research units, were also used in identifying input and
output variables of the research efficiency model in this study. The reason that our
variable selection is based on these studies is that, similar to the above studies, we
want to separately assess teaching and research efficiencies. The input and output
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variables in both models are summarized in Table 1.

As suggested by Ahn et al. (1988), input variables in a DEA model must represent
labor and capital utilized in the operation of HEIs. The input variables in Abbot and
Doucouliagos (2001) were appropriate in evaluating teaching efficiency since they
included both types of university personnel and financial resources that were neces-
sary to provide teaching services to students. Therefore, these variables are included
in Table 1. However, Abbot and Doucouliagos (2001) defined the number of
students to be their teaching output. In this study, we feel that the number of
students did not appropriately reflect the teaching output. Instead, we use the
numbers of graduates at both undergraduate and graduate levels as teaching
outputs, which are similar to teaching outputs in Warning (2004). The last output
variable in our teaching model is the employment rate. We acknowledge that the
higher employment rate is not a definitive indicator of quality teaching since other
factors such as prevailing economic situation and academic fields with traditionally
low employment rates like Thai studies and history need to be considered. However,
Førsund and Kalhagen (1999) and Colbert et al. (2000) have recommended the use

Table 1. Input and output variables in DEA models

DEA model Inputs Outputs

1. Teaching efficiency 1. Annual operating budget 1. Number of the graduates at

model 2. Number of academic staff
3. Number of non-academic staff
2. Research efficiency 1. Amount of internal research
model fund
2. Amount of external research
fund
3. Number of academic staff
the undergraduate level
2. Number of the graduates at
the master degree level
3. Employment rate
1. Number of publications in
internationally refereed
journals
2. Number of publications in
nationally refereed journals
3. Number of doctoral
graduates
 24 S. Kantabutra and J. C. S. Tang

of variables that reflect market demand for the university graduates as a measure of
teaching quality. For this reason, the employment rate is used to serve that purpose.
For our research efficiency model, variables that represent labor and capital in
producing research outputs are also employed. Labor in this case is academic staff as
suggested by Cherchye and Abeele (2005). Financial resources were measured by
research funds as proposed by Korhonen et al. (2001). External and internal funds
are thus used as input variables. Korhonen et al. (2001) and Cherchye and Abeele
(2005) suggested the number of internationally refereed journal publications as a
research output. Since Thailand is not an English-speaking country, a significant
portion of research publications is published in Thai. As a result, the number of
nationally and internationally refereed journal publications should also be consid-
ered as research outputs. However, the relative importance of each can be addressed
by assigning different weights to each category of the publication. For example, a
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faculty of social science may assign higher weight to nationally refereed publications
while a faculty of science may give more weight to internationally refereed publica-
tions. The final variable used in our model is the number of doctoral graduates. This
variable measures the outcome of research activities as suggested by Korhonen et al.
(2001) and Cherchye and Abeele (2005).

Data Collection
Data of 22 public universities, which consisted of 18 government universities and 4
autonomous universities, were collected at the faculty level. Two universities were
excluded from this study since both of them were newly established from the amal-
gamation of colleges in 2005/2006. Therefore, statistical data of these universities
were not available during the time of study.
Data of 267 faculties were collected from three secondary sources: reports from
Commission on Higher Education, university/faculty library (annual reports), and
university/faculty websites. All data were averaged using data from the period of 2003–
2006. The analysis was conducted at the faculty level using software DEAP version
2.1 to calculate efficiency scores. Then, statistical analyses were also performed
using SPSS version 13.

Results and Discussion

Teaching Efficiency
The teaching efficiency analysis was conducted among 267 faculties in 22 public
universities. The faculties were categorized by university location, university type,
and faculty type. Numbers and proportions of the faculties in each category are
summarized in Table 2.
In efficiency analysis, the faculties that are relatively efficient have their efficiency
scores equal to 1. In Table 2, the results in this study revealed that the average
teaching efficiency score of faculties in Thai public universities was 0.7629 and the
 Efficiency Analysis of Public Universities in Thailand 25

Table 2. Descriptive statistics for teaching efficiency model

Public universities No. of faculties Percentages

1. By location
In Bangkok 107 40.07
In other provinces 160 59.93
2. By university type
Government university 239 89.51
Autonomous university 28 10.49
3. By faculty type
Health science 68 25.47
Science and technology 98 36.70
Humanities and social science 101 37.83
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Total 267
Average efficiency score 0.7629
Standard deviation 0.1737

standard deviation was 0.1737, indicating a fairly high level of teaching efficiency.
Ranges of teaching efficiency scores are summarized in Table 3.
In Table 3, only 34 faculties (12.73%) were found to be relatively efficient.
However, most faculties (41.20%) performed at the upper moderate level in terms of
teaching efficiency while only 0.75% of the faculties performed at the least efficient
level. Further statistical analyses were conducted to examine differences in teaching
efficiency mean scores between autonomous and government universities as well as
between universities in Bangkok and other provinces by using the t-test. The
summary of results is presented in Table 4.
In Table 4, the first t-test was used to test the difference in the mean teaching effi-
ciency scores between autonomous and government universities. The result was not
significant at the 95% confidence interval (α = 0.05). Therefore, there was no differ-
ence in teaching efficiency mean scores between faculties in autonomous universities
and their counterparts in government universities (p-value = 0.1393). However,
between the universities in Bangkok and in other provinces, the result from the
second t-test indicated that the teaching efficiency mean scores were significantly
different. To be more precise, the average teaching efficiency score of faculties in
Table 3. Teaching efficiency scores of faculties in Thai public universities

Teaching efficiency score No. of faculties Percentages

1.00 34 12.73
0.75–0.99 110 41.20
0.50–0.74 107 40.07
0.25–0.49 14 5.24
Less than 0.25 2 0.75
Total 267 100.00
 26 S. Kantabutra and J. C. S. Tang

Table 4. Summary of statistical results of teaching efficiency analysis

Statistical analyses Mean p-value

1. t-test
Autonomous universities 0.8089 0.1393
Government universities 0.7755
2. t-test
Universities in Bangkok 0.7064 0.0049*
Universities in other provinces 0.8007
3. ANOVA
Faculties in health science 0.8757
Faculties in science and technology 0.7116 0.0000*
Faculties in humanities and social science 0.7367
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4. Multiple comparison
Health science vs. science and technology 0.0000*
Health science vs. humanities and social science 0.0000*
Science and technology vs. humanities and social science 0.3270

*Significant at α = 0.05.

universities in Bangkok was less than that of faculties in universities in other prov-
inces (p-value = 0.0049). Therefore, location affected university performance in
terms of efficiency, which was similar to the result found in the studies of Warning
(2004) and Carrington at al. (2005). When considering the output produced in
terms of the number of bachelor-degree graduates and the input utilized in terms of
operating expenses, academic staff, and non-academic staff, the result obtained was
also not surprising. Universities in Bangkok produced approximately 57% of the
graduates while consuming 60% of the government budget. Similarly, the propor-
tion of both types of staffs currently employed by universities in Bangkok constituted
60% of the total staffs in universities around the country. Obviously, universities in
Bangkok consumed more resources but produced fewer teaching outcomes.
The analysis of variance (ANOVA) was also performed to compare the difference
of teaching efficiency mean scores among three groups of faculties: health science,
science and technology, and humanities and social science. The result showed that
the average teaching efficiency scores of the three types of faculties were significantly
different (p-value = 0.00). In addition, results from the multiple comparison test
showed that the average teaching efficiency score of faculties in health sciences was
higher than that of faculties in sciences and technology (p-value = 0.00) as well as
that of faculties in humanities and social sciences (p-value = 0.00). However, the
average teaching efficiency scores were not different between faculties in sciences and
technology and humanities and social sciences (p-value = 0.3270). This finding was
similar to the study of Førsund and Kalhagen (1999) in Norway, which concluded
that teaching efficiency varied in different types of departments since they possessed
different teaching production functions. In our study, the employment rate, a
 Efficiency Analysis of Public Universities in Thailand 27

teaching output in the teaching efficiency model, also contributed to the difference in
teaching efficiency among faculty groups. Two factors affected the employment rate
of the graduates from Thai public universities. One was the work contract of the
graduates from some faculties in the health sciences group such as medicine,
dentistry, and pharmaceutical science, which required the graduates to work for
governmental organizations for some periods of time to repay the government subsi-
dies for their educations. Therefore, the faculties in health sciences definitely had a
higher employment rate, which subsequently led to a higher teaching efficiency.
Another factor was the low market demand of the graduates from some faculties in
science and technology and the humanities and social science group. At some univer-
sities during the time of this study, employment rates of the graduates from some
faculties such as faculty of science and faculty of laws were less than 50%, and this
also contributed to the lower teaching efficiency for the universities concerned.
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Research Efficiency
Data from 250 out of 267 faculties were used in research efficiency investigation
because some faculties failed to produce research outputs during the period of study.
Descriptive statistics of the analyzed faculties are displayed in Table 5.
The results show that public universities did not perform well in producing
research outputs, with an average research efficiency score of 0.4561 and a standard
deviation of 0.3262 (see Table 5). The grouping of research efficiency scores of
faculties in Thai public universities is presented in Table 6.
The result in Table 6 reveals that 40 faculties were relatively efficient in research.
This accounted for only 16% of all faculties. Moreover, most of the faculties performed
very poorly in producing research outputs, considering the highest percentage

Table 5. Descriptive statistics for research efficiency model

Public universities No. of faculties Percentages

1. By location
In Bangkok 96 38.40
In other provinces 154 61.60
2. By university type
Government university 227 90.80
Autonomous university 23 9.20
3. By faculty type
Health science 64 25.60
Science and technology 97 38.80
Humanities and social science 89 35.60
Total 250
Average efficiency score 0.4562
Standard deviation 0.3262
 28 S. Kantabutra and J. C. S. Tang

Table 6. Research efficiency score of faculties in Thai public universities

Research efficiency score No. of faculties Percentages

1.00 40 16.00
0.75–0.99 18 7.20
0.50–0.74 34 13.60
0.25–0.49 59 23.60
Less than 0.25 99 39.60
Total 250 100.00

(39.60%) fell in the lowest range of the efficiency score. Using data in Tables 2 and
3 to compare the performances in terms of teaching efficiency and research efficiency,
it was clearly seen that public universities in Thailand were more efficient in teaching
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rather than in research as the average teaching efficiency score was higher. The higher
standard deviation in research efficiency score also indicated more variation in research
efficiency performance among faculties in Thai public universities. To examine the
difference in research efficiency among faculties in Thai public universities, a further
statistical analysis was conducted and the results are summarized in Table 7.
The t-test was used to investigate the difference in the average research efficiency
scores between two datasets. The first t-test was to examine the difference in the
average research efficiency scores between autonomous universities and government
universities. The result shows that the mean difference was significant (p-value =
0.0065) at the 95% confidence interval. It meant that the average research efficiency
score of faculties in the autonomous universities was different from that of faculties
in the government universities. A further analysis revealed that the average research
efficiency score of faculties in the autonomous universities was higher. This finding
was similar to the study of Cherchye and Abeele (2005) in the Netherlands which
concluded that the type of a university had an impact on research performance, as

Table 7. Summary of statistical results of research efficiency analysis

Statistical analyses Mean p-value

1. t-test
Autonomous universities 0.6166 0.0065*
Government universities 0.4399
2. t-test
Universities in Bangkok 0.4556 0.9779
Universities in other provinces 0.4567
3. ANOVA
Faculties in health science 0.5449
Faculties in science and technology 0.4355 0.0995
Faculties in humanities and social science 0.4204

*Significant at α = 0.05.
 Efficiency Analysis of Public Universities in Thailand 29

well as the study of Kuo et al. (2005) in Taiwan, which found that universities of
different types operated at different efficiency levels since they had different adminis-
tration and management systems.
The result from the second t-test in Table 7 shows that the average research effi-
ciency scores of universities in Bangkok and in other provinces were similar (p-value
= 0.9779). In addition, the comparison of mean differences of research efficiency
scores among three types of faculties was made. The ANOVA shows that there was
no difference in the average research efficiency scores among the three types of
faculties (p-value = 0.0995).
The relationship between teaching and research efficiency scores was also
examined using Pearson correlation statistics. The result shows that there is a signif-
icant relationship between the teaching efficiency scores and research efficiency
scores of faculties in Thai public universities (p-value = 0.00) with positive correla-
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tion (Pearson correlation = 0.2673), which is similar to the study of Warning

(2004). The finding indicates that faculties that were efficient in producing research
outputs were also efficient in producing teaching outputs.

Conclusion and Policy Implications

This study provides a framework to examine the performance of public universities
in Thailand in terms of efficiency in teaching and research. All public universities in
Thailand are substantially subsidized by the government. The taxpayers, therefore,
have the right to know how their money is spent and whether their money is used in
the most efficient way. This study serves this purpose by revealing how efficiently
public universities generate academic outputs. In this study, the operational
efficiency of all public universities was evaluated at the faculty level. Unlike most of
the previous studies, the teaching and research efficiencies were separately analyzed
to reveal the actual capability of Thai public universities.
Results from this study revealed that public universities in Thailand were more
efficient in teaching than in research. A further statistical analysis was performed to
identify factors that affected research efficiency. This study also found that the
autonomous universities were more efficient than the government universities in
producing research outputs. Since most of the faculties at the time of this study oper-
ated under the government universities, the reason might arise from the differences
in the operation and management systems between the two types of universities. The
dissimilarity between autonomous and government universities that leads to a major
difference on research efficiency is the employment contracts of faculty members.
While faculty members of the autonomous universities work under employment
contracts, their counterparts in government universities acquire permanent work
employments until their retirements at 60 years of age (Kirtikara, 2004). To renew
their employment contracts, faculty members at the autonomous universities must
satisfy both teaching and research requirements which are imposed upon them by
the management of each faculty (Chandarasorn, 2002; Kirtikara, 2004). As a result,
research outputs of the autonomous universities significantly surpassed those of the
 30 S. Kantabutra and J. C. S. Tang

government universities. In addition, a performance appraisal system for faculty

members in the government universities is less vigorous (Kirtikara, 2004). Although
faculty members in the government universities are required to teach and do
research, the research requirement is not strictly enforced. In all cases conforming
merely to the teaching requirement is considered sufficient. Consequently, this
practice results in very few research outputs.
Although autonomous universities in Thailand were efficient in producing research
outputs, the research performance of Thai public universities in general was very poor
since most faculties in Thai public universities were clustered in the lowest research
efficiency groups as shown in Table 6. The reason for poor research performance in
public universities might be the fact that there is relatively little demand for research
from the private sector. Most of the companies in Thailand consist of small- and
medium-sized enterprises with limited investments and technological capabilities.
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Thus, these companies would mainly focus on low-technology production or buying

machinery and technology from abroad. Most of these companies also fail to realize
the importance of the innovative research that may enable them to become competitive
in the market and later lead to higher profitability. Thus, the investment in research
and development (R&D) as well as the technological development of Thai companies
are insignificant if compared with those in other developed countries (National
Economic and Social Development Board [NESDB], 2003). Without a strict enforce-
ment of the research requirement in performance evaluation for faculty members in
government universities, together with the lack of research demands from the private
sector, public universities in Thailand have little incentive to conduct research.
To increase research efficiency in the government universities, the university
administrators should provide incentives for research publications and innovation,
which have been successfully used at the autonomous universities such as King
Mongkut’s University of Technology Thonburi (KMUTT). For instance, the
Research and Intellectual Property Promotion Center at KMUTT was established to
provide research grants to junior researchers. In addition, cooperation with national
organizations such as the Thailand Research Fund (TRF) has also been successfully
implemented at several universities. The TRF is a national organization with the
objective of promoting research in Thailand. It accomplishes this goal by providing
research grants and funds to university personnel and honoring outstanding research-
ers. As a result, the TRF has been able to improve the research outputs of HEIs both
quantitatively and qualitatively (Sangnapaboworn, 2003). Private and industrial
sectors can also play a crucial role in supporting university research. A university body
called Science Park at the autonomous Suranaree University of Technology is a good
example of the cooperation between private sectors and the university. One of its
missions is to provide the technological and research expertise of its university staff to
private sectors and, in the process, it directly gives incentives to its university staff to
do research. In addition, university administrators should establish a more vigorous
performance evaluation and strictly execute it. This policy has already been found to
be successful for KMUTT, where the number of research outputs rose significantly
during the five-year period of its implementation (Kirtikara, 2004). However,
 Efficiency Analysis of Public Universities in Thailand 31

because government universities operate under strict rules and procedures similar to
those of other governmental offices, major reforms are difficult, at least in the short
term. Nevertheless, the transformation of the government universities to an autono-
mous status is strongly encouraged since the results in this study also indicate that
faculties in the autonomous universities were more efficient in producing research
outputs compared to their counterparts in the government universities. In terms of
teaching, our analysis reveals that universities in Bangkok were less efficient than their
counterparts in the provincial areas. To improve the teaching efficiency of public
universities in Bangkok, the university administrators should firstly identify the facul-
ties that need improvement. Once they are identified, one possible way to achieve
higher teaching efficiency is to increase the admission rate in the faculties whose grad-
uates are of high demand in the job market.
Since the comparative study of performance assessment between two types of
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public universities in Thailand has never been conducted, this study provides the
initial empirical results suggesting that the autonomous universities were better at
producing research outcomes. The results also support the government’s effort to
encourage the transformation of government universities into autonomous universi-
ties since this will strengthen the research capacity of Thai public universities. As
previously mentioned, the 1999 National Education Act was enacted with the aim to
transform Thailand into a knowledge-based society. As a consequence, research
activities should be strongly encouraged in Thai public universities. In order to
enable Thailand to become competitive in the global economy, it is important that
public universities in Thailand also concentrate their efforts and resources to
improve their research performance.
In addition, an efficiency analysis can be conducted within individual universities
at the faculty or departmental levels to provide insights for the university administra-
tors. Inefficient units can be discovered and a quick response can be made to
improve their performance, which can result in improving the overall performance of
the universities. Moreover, the results from the efficiency analysis can also provide
budgetary allocation criteria for the university administrators, with higher budgets to
be allocated to the units that are relatively efficient.
The focus on this study was limited to only public universities in Thailand and the
analysis was conducted using the average values over a specific timeframe. Future
research can be conducted using time-series data to investigate the improvement in
efficiency of public universities over time. In addition, an efficiency analysis in other
types of HEIs should be performed. Input and output variables might be adjusted in
the analysis of different types of HEIs. The authors hope that this study will offer a
new perspective in the performance evaluation of HEIs in Thailand and can be used
to support future research in higher education.

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