A DEA-Based Malmquist Productivity Approach for Assessing Total Factor Productivity Change in Malaysian Public Universities

Abstract

This study uses the non-parametric frontier method to examine the productivity growth of Malaysian public universities from 2017 to 2021. It examines changes in productivity at university groups and individual institutions, using three inputs (academic staff, undergraduate student enrolment, and postgraduate student enrolment) and three outputs (undergraduate and postgraduate qualifications awarded and publications). This study analyses productivity changes and breaks them down into technical efficiency and technological change using the Data Envelopment Analysis (DEA)-based Malmquist productivity index (MPI). The analysis reveals that public universities in Malaysia have seen an average annual increase in MPI of 0.5% over the period of the study. However, when the components of this productivity change are examined, it becomes evident that Malaysian public universities have had an annual average 1.3% increase in technology along with a 0.8% decline in technical efficiency. Further evaluation of the indexes reveals disparities between Malaysian university groups. Technical, comprehensive, and research universities make up the group that performs the best to the worst. Although Malaysian public universities’ productivity is increasing, it is mostly due to technology, which comes at the expense of decreased technical efficiency.