The Effect of Tuition Fee Constraints on Financial Management: Evidence from Korean Private Universities
Abstract
:1. Introduction
2. Literature Review
3. Theoretical Background
3.1. University Accounting System in Korea
3.2. Korean University Tuition Policy, Government Subsidy Mechanism
3.3. Conceptual Framework
4. Research Design
4.1. Data
4.2. Method of Analysis
5. Results
6. Discussion
7. Conclusions
Author Contributions
Funding
Conflicts of Interest
References
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Category | 2006 | 2007 | 2008 | 2009 | 2010 |
---|---|---|---|---|---|
Tuition fee income | 11,042,157 | 11,740,739 | 12,670,596 | 13,160,818 | 13,735,532 |
Government transfer and endowment income | 1,696,934 | 1,872,182 | 2,001,802 | 2,531,757 | 2,619,801 |
Education-related administrative fee income | 423,100 | 479,569 | 536,024 | 625,224 | 718,247 |
Non-education income | 637,659 | 756,620 | 832,873 | 878,081 | 806,131 |
Income from investments and other assets | 773,985 | 993,405 | 744,290 | 895,250 | 980,278 |
Income from sale of fixed assets | 94,701 | 89,610 | 41,390 | 28,896 | 36,678 |
Receipts for current liabilities | 2057 | 2090 | 3043 | 644 | 2644 |
Receipts for fixed liabilities | 102,857 | 98,865 | 186,425 | 150,581 | 203,458 |
Unused balance carried forward from the previous term | 1,256,314 | 1,241,322 | 1,450,637 | 1,744,106 | 1,864,169 |
Category | 2011 | 2012 | 2013 | 2014 | 2015 |
Tuition fee income | 13,724,007 | 13,781,492 | 13,725,653 | 13,395,827 | 13,657,620 |
Transfer and endowment income | 2,704,543 | 3,994,669 | 4,686,934 | 5,168,779 | 5,712,058 |
Education-related administrative fee income | 766,296 | 924,573 | 990,304 | 1,004,594 | 1,079,303 |
Non-education income | 803,171 | 739,496 | 578,832 | 547,841 | 425,648 |
Income from investments and other assets | 1,629,779 | 1,230,731 | 1,082,146 | 1,348,758 | 1,404,353 |
Income from sale of fixed assets | 25,073 | 65,699 | 59,364 | 156,265 | 155,745 |
Receipts for current liabilities | 635,149 | 345,378 | 2865 | 1466 | 1538 |
Receipts for fixed liabilities | 239,273 | 137,209 | 220,868 | 180,160 | 169,693 |
Unused balance carried forward from the previous term | 1,852,146 | 2,144,458 | 1,950,733 | 1,448,032 | 1,335,294 |
Category | 2006 | 2007 | 2008 | 2009 | 2010 |
---|---|---|---|---|---|
Remuneration | 6,078,237 | 6,326,260 | 6,818,692 | 7,273,686 | 7,735,373 |
Management and operating expenses | 1,683,451 | 1,830,510 | 1,998,206 | 2,131,326 | 2,304,174 |
Expenditure on research and students | 2,846,651 | 3,141,699 | 3,476,399 | 4,017,846 | 4,270,347 |
Non-education expenses | 147,816 | 152,705 | 169,697 | 205,459 | 176,330 |
Transfer expenses | 23,793 | 17,436 | 14,682 | 31,671 | 29,612 |
Expenditure from investments and other assets | 1,464,843 | 1,755,249 | 1,770,188 | 1,895,335 | 1,761,906 |
Fixed asset purchase expenses | 2,345,657 | 2,465,258 | 2,458,940 | 2,483,390 | 2,603,733 |
Repayments for current liabilities | 11,512 | 10,968 | 14,302 | 12,282 | 17,301 |
Repayments for fixed liabilities | 101,982 | 133,637 | 118,034 | 114,185 | 112,007 |
Unused balance carried forward to the following term | 1,325,820 | 1,440,680 | 1,627,939 | 1,850,177 | 1,974,108 |
Category | 2011 | 2012 | 2013 | 2014 | 2015 |
Remuneration | 7,966,689 | 8,590,134 | 8,895,711 | 8,865,079 | 9,299,141 |
Management and operating expenses | 2,420,198 | 2,536,298 | 2,531,540 | 2,477,145 | 2,532,611 |
Expenditure for research and students | 4,570,886 | 5,851,675 | 6,607,738 | 7,039,274 | 7,527,429 |
Non-education expenses | 160,657 | 125,146 | 111,182 | 100,329 | 93,943 |
Transfer expenses | 16,061 | 4413 | 5188 | 6001 | 6485 |
Expenditure from investments and other assets | 1,884,229 | 1,294,934 | 1,224,080 | 1,354,988 | 1,417,681 |
Fixed asset purchase expenses | 2,568,536 | 2,528,381 | 2,208,582 | 2,097,255 | 1,799,602 |
Repayments for current liabilities | 8244 | 8570 | 10,091 | 14,829 | 23,231 |
Repayments for fixed liabilities | 168,805 | 150,449 | 142,292 | 227,812 | 144,819 |
Unused balance carried forward to the following term | 1,997,045 | 1,950,127 | 1,562,814 | 1,272,696 | 1,119,711 |
Category | Variable | Note |
---|---|---|
Control variables | Fiscal year: 2006–2015 | |
Size: Fewer than 5000 students = 1, 5000 to fewer than 10,000 students = 2, 10,000 students and more = 3 | ||
Finance size: Fewer than 10 billion KRW = 1, 10 billion KRW to fewer than 50 billion KRW = 2, 50 billion to 100 billion KRW = 3, 100 billion KRW to 200 billion KRW = 4, 200 billion KRW and more = 5 | ||
University establishment year | ||
Independent variables | Tuition fee | |
Government subsidies | ||
Dependent variables | Operating expenses | shirking |
Expenditure from investments and other assets | shirking | |
Fixed asset purchase expenses | shirking | |
Unused balance carried forward to the following term | budget maximization | |
Labor costs | cross-subsidization | |
Research expenses | cross-subsidization | |
Laboratory fees | cross-subsidization | |
Student support fees | cross-subsidization |
Mean | Min. | Max. | |
---|---|---|---|
Tuition fees | 93,513,167 | 7,366,817 | 383,330,038 |
Government subsidies | 9,853,121 | 1 | 66,359,084 |
Labor costs | 60,953,790 | 4,532,384 | 482,828,806 |
Operating expenses | 16,242,164 | 1,443,113 | 123,557,121 |
Research expenses | 4,221,199 | 1 | 79,950,857 |
Laboratory fees | 1,801,100 | 56,887 | 9,283,436 |
Student support fees | 2,658,183 | 5029 | 22,782,981 |
Expenditure from investments and other assets | 12,704,207 | 1 | 180,521,886 |
Fixed asset purchase expenses | 17,184,608 | 220,055 | 142,486,789 |
Unused balance carried forward to the following term | 8,764,900 | 1 | 120,581,735 |
Variable | LLC | Fisher | |
---|---|---|---|
Label variables | Tuition fees | −5.0838 *** | 4.5162 *** |
Government subsidies | 5.5706 | 7.8925 *** | |
Labor costs | −1.4675 * | 0.2549 *** | |
Operating expenses | −4.0846 *** | 1.7872 ** | |
Research expenses | −10.3454 *** | 3.9814 *** | |
Laboratory fees | −5.2519 *** | 6.2017 | |
Student support fees | −2.5769 ** | 2.5867 ** | |
Expenditure from investments and other assets | −23.0822 *** | 6.4828 *** | |
Fixed asset purchase expenses | −9.0398 *** | 9.3314 *** | |
Unused balance carried forward to the following term | −8.3428 *** | 2.9690 ** | |
Log-trans variables | Tuition fee | −5.8952 *** | 8.9989 *** |
Government subsidies | −26.1368 *** | 14.2754 *** | |
Labor costs | −3.6059 *** | 3.4120 *** | |
Operating expenses | −9.0974 *** | 1.8012 ** | |
Research expenses | −5.3402 *** | 2.0106 *** | |
Laboratory fees | −6.4330 *** | 8.4936 *** | |
Student support fees | −5.2303 *** | 1.3841 ** | |
Expenditure from investments and other assets | −12.3069 *** | 10.6963 *** | |
Fixed asset purchase expenses | −9.8209 *** | 8.6506 *** | |
Unused balance carried forward to the following term | −16.2357 *** | 7.5542 ** |
Labor Costs | Operating Expenses | Research Expenses | Laboratory Fees | Student Support Fees | Expenditure from Investments and Other Assets | Fixed Asset Purchase Expenses | Unused Balance Carried Forward to the Following Term |
---|---|---|---|---|---|---|---|
0.5 | 0.18 | 0.28 | 5.18 * | 4.16 | 0.72 | 6.37 * | 1.27 |
2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | Average | |
---|---|---|---|---|---|---|---|---|---|---|
Tuition fee | 9.092 | 7.794 | 1.304 | 3.883 | 3.386 | −2.284 | −0.135 | 0.890 | −0.995 | 2.548 |
Government subsidies | 8.570 | 36.428 | 100.466 | 19.575 | 7.403 | 107.680 | 39.059 | 20.077 | 8.675 | 38.659 |
Labor costs | 6.505 | 8.107 | 4.458 | 6.322 | 5.941 | 4.715 | 3.357 | 2.310 | 2.461 | 4.908 |
Operating expenses | 11.252 | 9.158 | 3.802 | 7.533 | 6.180 | 1.036 | 0.628 | 2.441 | −0.980 | 4561 |
Research expenses | 14.125 | −5.551 | 1.927 | 1.509 | 2.516 | −1.755 | −3.494 | −6.026 | −4.796 | −0.172 |
Laboratory fees | 4.033 | 6.036 | 8.768 | 6.212 | 8.435 | −3.512 | 0.278 | −1.520 | −3.624 | 2.790 |
Student support fees | 13.043 | 13.765 | 19.309 | 15.078 | 12.918 | 11.496 | −0.341 | −0.655 | 1.671 | 9.587 |
Expenditure from investments and other assets | 30.744 | −4.078 | 5.594 | −4.745 | 11.735 | −32.190 | −2.244 | 5.537 | −2.232 | 0.902 |
Fixed asset purchase expenses | 8.164 | −4.974 | −5.409 | 9.149 | 0.230 | −5.029 | −9.313 | −4.372 | −9640 | −2.355 |
Unused balance carried forward to the following term | 9.675 | 18.619 | 11.833 | 7.212 | 10.941 | −7.980 | −22.097 | −13.076 | −8.729 | 0.711 |
Labor Costs | Operating Expenses | Research Expenses | Laboratory Fees | Student Support Fees | Expenditure from Investments and Other Assets | Fixed Asset Purchase Expenses | Unused Balance Carried forward to the Following Term | |
---|---|---|---|---|---|---|---|---|
Variables | Estimate | Estimate | Estimate | Estimate | Estimate | Estimate | Estimate | Estimate |
(Std. Error) | (Std. Error) | (Std. Error) | (Std. Error) | (Std. Error) | (Std. Error) | (Std. Error) | (Std. Error) | |
2007 | −0.01476 | 0.02942 | −0.29437 | −0.03216 | 0.07339 | 0.19713 | −0.0895 | 0.06827 |
(0.02828) | (0.03829) | (0.21530) | (0.05692) | (0.08135) | (0.27129) | (0.10077) | (0.33895) | |
2008 | −0.00123 | 0.05373 | −0.37764 | −0.04957 | 0.08899 | 0.26373 | −0.03832 | 0.32757 |
(0.02891) | (0.03914) | (0.22010) | (0.05819) | (0.08316) | (0.27734) | (0.10302) | (0.34651) | |
2009 | 0.02181 | 0.06809 | −0.19920 | −0.00080 | 0.17710 | 0.22303 | −0.05294 | 0.78988 * |
(0.03016) | (0.04084) | (0.22962) | (0.06070) | (0.08676) | (0.28933) | (0.10747) | (0.36149) | |
2010 | 0.04474 | 0.10817 * | −0.34752 | 0.02670 | 0.25682 * | 0.45069 | −0.06073 | 1.04254 ** |
(0.03096) | (0.04192) | (0.23570) | (0.06231) | (0.08905) | (0.29699) | (0.11032) | (0.37107) | |
2011 | 0.08719 ** | 0.16186 *** | −0.13834 | 0.09393 | 0.33886 *** | 0.29161 | −0.06897 | 1.18069 ** |
(0.03137) | (0.04247) | (0.23882) | (0.06314) | (0.09023) | (0.30092) | (0.11178) | (0.37598) | |
2012 | 0.14862 *** | 0.17923 *** | −0.23124 | 0.03539 | 0.34256 *** | 0.01490 | −0.10851 | 1.10039 ** |
(0.03314) | (0.04487) | (0.25233) | (0.06671) | (0.09534) | (0.31794) | (0.11810) | (0.39724) | |
2013 | 0.17934 *** | 0.16132 *** | −0.36277 | 0.02197 | 0.31807 ** | −0.22887 | −0.29921 * | 0.74546 * |
(0.03404) | (0.04609) | (0.25916) | (0.06851) | (0.09792) | (0.32655) | (0.12130) | (0.40800) | |
2014 | 0.19776 *** | 0.16181 *** | −0.33982 | 0.01604 | 0.29624 ** | −0.19081 | −0.37022 ** | 0.57306 |
(0.03460) | (0.04685) | (0.26341) | (0.06964) | (0.09953) | (0.33191) | (0.12329) | (0.41470) | |
2015 | 0.22787 *** | 0.15175 *** | −0.40713 | 0.00869 | 0.30619 ** | 0.19899 | −0.55517 *** | 0.40590 |
(0.03478) | (0.04709) | (0.26478) | (0.07000) | (0.10004) | (0.33363) | (0.12393) | (0.41684) | |
Size 2 | 0.00568 | −0.16353 *** | 1.07321 *** | −0.39731 *** | 0.12522 | 0.02251 | −0.30039 * | 0.49460 |
(0.03377) | (0.04573) | (0.25712) | (0.06797) | (0.09715) | (0.32399) | (0.12035) | (0.40480) | |
Size 3 | 0.20578 *** | −0.19757 ** | 0.84919 * | −0.46930 *** | 0.16738 | −0.57829 | −0.24054 | 1.27007 * |
(0.04993) | (0.06761) | (0.38016) | (0.10050) | (0.14364) | (0.47902) | (0.17794) | (0.59850) | |
Finance size 2 | −0.08645 | −0.04505 | −1.26558 * | −0.12601 | 0.25969 | −1.34524 * | −0.89541 *** | −3.43467 *** |
(0.07106) | (0.09622) | (0.54104) | (0.14303) | (0.20442) | (0.68173) | (0.25324) | (0.85177) | |
Finance size 3 | 0.11619 * | 0.24477 ** | −0.50636 | 0.48793 *** | 0.54865 ** | −0.34339 | −0.08124 | −1.35397 * |
(0.06669) | (0.09031) | (0.50778) | (0.13424) | (0.19186) | (0.63983) | (0.23767) | (0.79941) | |
Finance size 4 | 0.56976 *** | 0.37265 *** | −0.14532 | 0.64218 *** | 0.60163 ** | 0.52592 | −0.06373 | −2.31693 * |
(0.07855) | (0.10636) | (0.59806) | (0.15811) | (0.22597) | (0.75359) | (0.27993) | (0.94155) | |
Finance size 5 | 0.62062 *** | 0.82258 *** | −0.41478 | 0.51976 *** | 0.83239 *** | 0.47565 | 0.63097 * | 0.31588 |
(0.07778) | (0.10531) | (0.59218) | (0.15655) | (0.22374) | (0.74617) | (0.27717) | (0.93228) | |
Year | −0.00084 * | 0.00003 | −0.0065 * | −0.00450 *** | 0.00235 | −0.01328 *** | −0.00436** | −0.0033 |
(0.00042) | (0.00057) | (0.00322) | (0.00085) | *(0.00122) | (0.00406) | (0.00151) | (0.00507) | |
tuition fee | 0.71858 *** | 0.739 *** | 1.31021 *** | 0.91076 *** | 0.72633 *** | 1.57892 *** | 0.65774 *** | −0.32858 |
(0.02958) | (0.04006) | (0.22523) | (0.05954) | (0.08510) | (0.28380) | (0.10542) | (0.35459) | |
government subsidies | 0.01338 *** | 0.02026 *** | 0.01060 | 0.02347 * | 0.07606 *** | −0.07408 | 0.00344 | −0.02347 |
(0.00506) | (0.00685) | (0.03851) | (0.01018) | (0.01455) | (0.04852) | (0.01802) | (0.06062) |
Labor Costs | Operating Expenses | Research Expenses | Laboratory Fees | Student Support Fees | Expenditure from Investments and Other Assets | Fixed Asset Purchase Expenses | Unused Balance Carried Forward to the Following Term | |
---|---|---|---|---|---|---|---|---|
Estimate | Estimate | Estimate | Estimate | Estimate | Estimate | Estimate | Estimate | |
(Std. Error) | (Std. Error) | (Std. Error) | (Std. Error) | (Std. Error) | (Std. Error) | (Std. Error) | (Std. Error) | |
Size 2 | 0.10932 ** | −0.0755 | 0.90783 ** | −0.36045 *** | 0.35643 ** | −0.33384 | −0.31036 ** | −0.18047 |
(−0.03547) | (−0.04949) | (−0.28127) | (−0.07475) | (−0.10414) | (−0.35398) | (−0.1323) | (−0.44232) | |
Size 3 | 0.28677 *** | −0.12888 * | 0.74141 * | −0.44008 *** | 0.34773 ** | −0.82654 * | −0.24356 | 0.76844 |
(−0.04893) | (−0.06826) | (−0.38799) | (−0.10311) | (−0.14366) | (−0.4883) | (−0.1825) | (−0.61015) | |
Finance size 2 | −0.02854 | 0.00312 | −1.11739 ** | −0.10065 | 0.38524 * | −1.20538 * | −0.84749 ** | −3.52164 *** |
(−0.06824) | (−0.09521) | (−0.54119) | (−0.14382) | (−0.20038) | (−0.6811) | (−0.25456) | (−0.85106) | |
Finance size 3 | 0.15811 ** | 0.28038 ** | −0.57538 | 0.50281 ** | 0.6422 ** | −0.49051 | −0.08574 | −1.62956 ** |
(−0.06394) | (−0.08922) | (−0.50708) | (−0.13475) | (−0.18776) | (−0.63818) | (−0.23852) | (−0.79744) | |
Finance size 4 | 0.55514 *** | 0.35987 ** | −0.03909 | 0.63863 *** | 0.56775 ** | 0.69299 | −0.0439 | −2.12168 ** |
(−0.07513) | (−0.10482) | (−0.59578) | (−0.15833) | (−0.2206) | (−0.74981) | (−0.28024) | (−0.93692) | |
Finance size 5 | 0.52856 *** | 0.7445 *** | −0.29402 | 0.4865 ** | 0.62742 ** | 0.75534 | 0.63401 ** | 0.88397 |
(−0.07529) | (−0.10504) | (−0.59706) | (−0.15866) | (−0.22107) | (−0.75142) | (−0.28083) | (−0.93893) | |
Year | −0.00055 | 0.00029 | −0.00848 ** | −0.00442 *** | 0.00305 ** | −0.01638 *** | −0.00472 ** | −0.00705 |
(−0.00041) | (−0.00058) | (−0.00328) | (−0.00087) | (−0.00121) | (−0.00413) | (−0.00154) | (−0.00516) | |
tuition fee | −2.79458 *** | −2.26815 ** | 12.46893 ** | −0.2286 | −7.1948 ** | 21.48103 ** | 2.23008 | 29.25179 ** |
(−0.6576) | (−0.91749) | (−5.21486) | (−1.38582) | (−1.93091) | (−6.56308) | (−2.45289) | (−8.20085) | |
tuition fee square | 0.09578 *** | 0.08202 ** | −0.31302 ** | 0.03089 | 0.21609 *** | −0.55498 ** | −0.04482 | −0.81707 ** |
(−0.01818) | (−0.02537) | (−0.1442) | (−0.03832) | (−0.05339) | (−0.18149) | (−0.06783) | (−0.22678) | |
government subsidies | −0.07617 *** | −0.05399 ** | −0.2761 ** | −0.01689 | −0.11722 ** | −0.37141 ** | −0.08345 | 0.04165 |
(−0.01381) | (−0.01927) | (−0.10951) | (−0.0291) | (−0.04055) | (−0.13782) | (−0.05151) | (−0.17221) | |
government subsidies square | 0.00556 *** | 0.00461 *** | 0.01864 ** | 0.00252 | 0.01198 *** | 0.01965 ** | 0.00558 | −0.00302 |
(−0.00082) | (−0.00115) | (−0.00654) | (−0.00174) | (−0.00242) | (−0.00823) | (−0.00307) | (−0.01028) |
© 2020 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).
Share and Cite
Lee, Y.-H.; Kim, K.-S.; Lee, K.-H. The Effect of Tuition Fee Constraints on Financial Management: Evidence from Korean Private Universities. Sustainability 2020, 12, 5066. https://doi.org/10.3390/su12125066
Lee Y-H, Kim K-S, Lee K-H. The Effect of Tuition Fee Constraints on Financial Management: Evidence from Korean Private Universities. Sustainability. 2020; 12(12):5066. https://doi.org/10.3390/su12125066
Chicago/Turabian StyleLee, Young-Hwan, Kwon-Sik Kim, and Kwang-Hoon Lee. 2020. "The Effect of Tuition Fee Constraints on Financial Management: Evidence from Korean Private Universities" Sustainability 12, no. 12: 5066. https://doi.org/10.3390/su12125066