Revenue diversification in public higher learning institutions: an exploratory Malaysian study

Abstract

Purpose The purpose of this paper is to explore the extent of revenue diversification of selected Malaysian public higher learning institutions (HLIs) and the perceptions of senior officers of Malaysian public HLIs on matters related to revenue diversification. Design/methodology/approach The study analyses data from the HLIs’ financial statements to compute the Hirschman-Herfindahl Index (HHI) for revenue diversification and a perception survey with senior officers of the Malaysian public HLIs. Findings The results suggest that while a majority of the Malaysian public HLIs were still dependent largely on government funding, the more established and larger HLIs had a slightly more diversified revenue structure. The survey suggested that overall the senior officers were receptive to the need for revenue diversification. Research limitations/implications The paper is largely based on a perception survey. Future work should utilise in-depth interviews and/or focus groups and a more in-depth analysis of financial statement data to provide richer data. Practical implications The study’s findings provide useful baseline data upon which further work may be built, particularly in the less explored developing country context. They will also prove useful to the administrators of public HLIs in other parts of the world facing a similar financial austerity situation. Originality/value The present study examines both the extent of revenue diversification of HLIs as well as senior HLI officers’ perceptions on revenue diversification strategies. Most prior studies on revenue diversification have examined non-profit organisations, not HLIs and most were either only perception-based studies or only looked at the extent of revenue diversification using the HHI.