This thesis investigates economies of scale and scope in higher education. In a period of tighter budget constraints, declining government funding, and increasing competition for students, staff and non-commercial and commercial research funding, understanding the nature of any scale and scope economies in higher education is critically important for both policy change and ongoing institutional and structural reform. The thesis presents three separate but related research objectives to provide insights into this important area: first, an examination of new output sources of cost economies (including scale and scope) as they exist in the Australian higher education sector, second, an analysis of the link between university performance and cost economies, and finally, an evaluation of the factors affecting the estimated economies of scale and scope.