The study developed the model to test returns to scale of the project
enhancing the universities's educational competency(: PEUEC) for searching
the standard to select a target of the government’s financial support. For
this purpose, the study used cross-sectional data and panel data related with
PEUEC and assumed the product process of universities's educational
competency to be Cobb-Douglas production function.
The study analysed whether PEUEC is constant returns to scale, increasing
returns to scale or decreasing returns to scale by the total cost of the
university. The result showed that PEUEC seems to be the decreasing
returns to scale as the total cost on the education increases. This means
that as the total cost increases, universities's educational competency
increases but marginal product of universities's educational competency
decreases.