Is human and financial investment in Chinese universities effective?

To obtain high-quality human resources and to gain advantages in the context of global competition, countries are constantly promoting the development of higher education. Enormous human and financial resources were invested in this “battle”. However, the “inputs” consumed by universities are largely ignored. A major issue, evaluating how well a country's universities make use of input resources in their output path, is of economic and social significance. The focus of this study is to embed the concept of capacity utilization in education and to assess the university's performance. We construct an attainable output-oriented capacity utilization measurement model by taking into account the heterogeneity of the region. According to the usage of the input, we divide the decision making units into four areas and identify the causes of inefficiency. Thus, the methodology proposed in this study provides policymakers an applicable tool on differences in educational inputs across regions. To illustrate the method, we conduct an empirical analysis using data from 54 universities directly under the Ministry of Education in China.