Adopting the Hirschman–Herfindahl Index to estimate the financial sustainability of Vietnamese public universities

Trung Thanh Le; Thuy Linh Nguyen; Minh Thong Trinh; Mai Huong Nguyen; Minh Phuong Thi Nguyen; Hiep-Hung Pham

doi:10.1057/s41599-021-00927-2

Adopting the Hirschman–Herfindahl Index to estimate the financial sustainability of Vietnamese public universities

Trung Thanh Le, Thuy Linh Nguyen, Minh Thong Trinh, Mai Huong Nguyen, Minh Phuong Thi Nguyen, Hiep-Hung Pham^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

12 Citations (Scopus)

32 Downloads (Pure)

Abstract

Over several decades, the Vietnamese government has increasingly cut its investment in the public higher education system and has also introduced a cost-sharing mechanism. Under this scheme, Vietnamese public universities have been seeking other sources of revenue. Despite the bold emphasis on the need for revenue diversification in higher education in Vietnam, there is little empirical evidence of the status quo of Vietnamese public higher education finance. The purpose of this paper was to fill this research gap by using the Hirschman–Herfindahl Index to estimate the degree of financial diversity in 51 public universities in Vietnam between 2015 and 2017. Our findings revealed that all institutions in this study were unsustainable due to their weak financial diversity. Suggestions for policy makers and university leaders that may enhance financial sustainability include the adoption of performance-based financial allocations and the implementation of capacity-building programs for universities with regard to fund-raising and entrepreneurship skills.

Original language	English
Article number	118540
Number of pages	10
Journal	Humanities and Social Sciences Communications
Volume	8
Issue number	1
Early online date	26 Oct 2022
DOIs	https://doi.org/10.1057/s41599-021-00927-2
Publication status	Published - 26 Oct 2022
Externally published	Yes

Funding

financial support from the government, and students undertook their higher education free of charge. However, a gradual decrease in government funding for public higher education has occurred worldwide over the past few decades (Tandberg, 2010; Joaquim and Cerdeira, 2020). This change means that cost-sharing policies or the need for public universities to seek other sources of income, such as tuition fees, donations, and knowledge transfer services, have become necessary for public universities to maintain their operations (Ayalew, 2013; Yip et al., 2020). The concept of cost-sharing has appeared in the higher education reform agendas of many countries, including European nations and the US (Clark, 1998; Etzkowitz et al., 2000) and developing/emerging countries such as Jordan (Kanaan et al., 2011). Compared to public universities in developed countries, public universities in developing/emerging countries are under higher pressure to engage in cost-sharing, partly because developing and emerging governments are facing more budget constraints than their counterparts in the developed world (World Bank, 2000).

Keywords

Hirschman-Herfindahl index
financial sustainability
Vietnamese public universities

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10.1057/s41599-021-00927-2Licence: CC BY 4.0

Le-etal-HSSC-2022-Adopting-the-Hirschman–Herfindahl-Index-to-estimate-the-financial-sustainability-of-VietnameseFinal published version, 829 KBLicence: CC BY 4.0

Cite this

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abstract = "Over several decades, the Vietnamese government has increasingly cut its investment in the public higher education system and has also introduced a cost-sharing mechanism. Under this scheme, Vietnamese public universities have been seeking other sources of revenue. Despite the bold emphasis on the need for revenue diversification in higher education in Vietnam, there is little empirical evidence of the status quo of Vietnamese public higher education finance. The purpose of this paper was to fill this research gap by using the Hirschman–Herfindahl Index to estimate the degree of financial diversity in 51 public universities in Vietnam between 2015 and 2017. Our findings revealed that all institutions in this study were unsustainable due to their weak financial diversity. Suggestions for policy makers and university leaders that may enhance financial sustainability include the adoption of performance-based financial allocations and the implementation of capacity-building programs for universities with regard to fund-raising and entrepreneurship skills.",

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AU - Le, Trung Thanh

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Adopting the Hirschman–Herfindahl Index to estimate the financial sustainability of Vietnamese public universities

Abstract

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Keywords

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