Performance, competition, and structural change in the university sector—the case of Germany

Abstract This article analyzes the development of performance and structure in the German higher education sector, with a particular focus on policy measures to strengthen university autonomy (2009) and the Excellence Initiative (2006–2012). The analysis is based on data at the university level, covers the period 2000–2016, and uses a conditional, nonparametric approach to measure productivity as well as its dynamics using the Malmquist index. With regard to autonomy policy, we note that the decline in productivity growth in teaching observed since 2005, which even turned negative in 2012, could be related to the fact that autonomous universities were unable to match the growth in academic staff to the growth in graduate numbers. With regard to the Excellence Initiative and its goal of promoting research performance, we find significant differences between excellence-funded and non-excellence-funded universities. Research productivity follows a U-shaped pattern over time, with a recovery of productivity growth starting around 2010. Here, non-excellence-funded universities show stronger recovery and performance gains than excellence-funded universities, especially in quality-adjusted research. Overall, the Excellence Initiative promoted competition and structural change by enabling in particular non-excellence-funded universities to improve their performance even more.