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

Nik Nazli Nik Ahmad (Department of Accounting, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Kuala Lumpur, Malaysia)
Siti Alawiah Siraj (Department of Accounting, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Kuala Lumpur, Malaysia)
Suhaiza Ismail (Department of Accounting, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Kuala Lumpur, Malaysia)

Journal of Applied Research in Higher Education

ISSN: 2050-7003

Article publication date: 6 February 2019

Issue publication date: 18 June 2019

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.

Keywords

Acknowledgements

The authors gratefully acknowledge the research funding obtained from the research grant LRGS14-002-0003 and the administrative support from the IIUM Centre of Islamic Economics (CIE). The authors also wish to extend our appreciation to all survey respondents for their participation in this research.

Citation

Nik Ahmad, N.N., Siraj, S.A. and Ismail, S. (2019), "Revenue diversification in public higher learning institutions: an exploratory Malaysian study", Journal of Applied Research in Higher Education, Vol. 11 No. 3, pp. 379-397. https://doi.org/10.1108/JARHE-04-2018-0057

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited