Financial sustainability of a Ukrainian university due to the COVID-19 pandemic: A calculative approach
-
DOIhttp://dx.doi.org/10.21511/imfi.18(4).2021.28
-
Article InfoVolume 18 2021, Issue #4, pp. 340-354
- Cited by
- 648 Views
-
213 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
In 2020, due to the COVID-19 pandemic, university funding in Ukraine suffered significant losses due to unprecedented quarantine measures. The challenge for universities is to diversify funding sources, develop effective approaches to minimize existing and prevent future threats to ensure their financial stabilization (sustainability) in the post-pandemic period. The paper aims to consider financial sustainability of a university (the case of Taras Shevchenko National University of Kyiv) due to COVID-19 using the objective calculative approach on the statistical sample of data for 2011–2020. The tasks for achieving the aim are seen in determining, using regression methods, the number of lost receipts from general and special funds in the short and medium term, which will maintain a constant value of receipts at constant assets. The main idea of the paper is that financial sustainability is considered as a condition, and stabilization is considered as a process towards stability/sustainability.
The modeling approach reveals a fragile list of factors for the future preventing measures of the University to sustain. It is estimated that the University’s top management should consider financial strategy in dollar terms only. The challenge is that funding in hryvnia seems to be quite increasing and linear, but indeed, funding of the University is non-linear and has a quite intensive downward trend. Thus, for the financial sustainability strategy, this fact should be crucial.
The results indicate the need for a significant increase in university funding to mitigate the impact of macroeconomic instability due to various crises, including the COVID-19 pandemic.
Acknowledgment
The study is carried out under the grant funded from the National Research Fund of Ukraine within the competition Science for Human Security and Society, topic 2020.01/0265.
- Keywords
-
JEL Classification (Paper profile tab)I22, C01
-
References48
-
Tables4
-
Figures4
-
- Figure 1. Change in the amount of funding of the University under the general and special fund, UAH mln, 2011–2020
- Figure 2. Change in the amount of funding of the University under the general and special fund, USD mln, 2011–2020
- Figure 3. Dynamics (2011–2020) and short-term forecast (2021–2023) of the amount of the University’s funding under the general and special fund, USD mln
- Figure 4. Dynamics (2011–2020) and medium-term forecast (2021–2025) of the amount of the University’s funding under the general and special fund, USD mln
-
- Table 1. Average data on funding of the University
- Table 2. Absolute and relative indicators for funding of the University, 2011–2020
- Table 3. Estimated financing for the University during 2021–2025
- Table 4. Linear regression modeling and Ramsey RESET test
-
- Adamenko, I. (2019). Financial stabilization in economic transformations. University Economic Bulletin, 43, 126-133.
- Adams, W. (1977). Economic Problems Confronting Higher Education: Financing Public. The American Economic Review, 67(1).
- Alferov, V. (2014). Antikrizisnyye mekhanizmy finansovoy stabilizatsii i razvitiya organizatsii [Anti-crisis mechanisms of financial stabilization and development of the organization]. Strategicheskiye resheniya i risk-menedzhment – Strategic decisions and risk management. (In Russian).
- Bilinets, M. Yu., Bilinets, M. Yu., Buryachenko, A. E., Buryachenko, A. E., Paentko, T. V., & Paentko, T. V. (2021). Financing higher education in Ukraine in the XXI century: challenges and prospects for overcoming them.
- Bloom, D. E., & Canning, D. (2004). Epidemics and economics: Interactions between global change and human health. Scripta Varia, 106, 304-331.
- Cavallo, E., Galiani, S., Noy, I., & Pantano, J. (2013). Catastrophic natural disasters and economic growth. Review of Economics and Statistics, 95(5), 1549-1561.
- Cernostana, Z. (2018). Measuring financial sustainability of private higher education institutions. Engineering for Rural Development, 1173-1178.
- Das, P. (2019). Econometrics in Theory and Practice (574 p.). Springer.
- Davoodi, H. R., Tiongson, E. R., & Asawanuchit, S. S. (2003). How useful are benefit incidence analyses of public education and health spending? (IMF Working Paper WP/03/227). Washington, DC: International Monetary Fund.
- Donald, J. M. (1980). Financial reform and stabilization policy in a developing economy. Journal of Development Economics, 7(3), 359-395.
- Drayton, E., & Waltmann, B. (2020). Will universities need a bailout to survive the COVID-19 crisis? The Institute for Fiscal Studies.
- Estermann, T., & Bennetot Pruvot, E. (2011). Financially Sustainable Universities II. European Universities Diversifying Income Streams. Brussels: European University Association.
- Geiger, R. (2010). Impact of the financial crisis on higher education in the United States. International Higher Education.
- Giofré, M. (2017). Financial education, investor protection and international portfolio diversification. Journal of International Money and Finance, 71, 111-139.
- Grossi, G., Dobija, D., & Strzelczyk, W. (2019). The Impact of Competing Institutional Pressures and Logics on the Use of Performance Measurement in Hybrid Universities. Public Performance & Management Review.
- Hamilton, J. D. (2020). Time series analysis. Princeton University Press.
- Ignatyuk, A., Dikiy, A., Shevtsiv, L., Petlenko, Y., Klymash, N., & Zaitsev, O. (2021). Determination of the Company’s Value under the Influence of Various Factors. Journal of Optimization in Industrial Engineering, Special issue, 127-133.
- Keegan, D. (1996). Foundations of Distance Education (3rd ed.). Routledge.
- Kohtamäki, V. (2009). Financial Autonomy in Higher Education Institutions – Perspectives of Senior Management of Finnish AMK Institutions. Tampere: Tampere University Press.
- Kovalenko, Y., & Popovych, L. (2018). Financing of higher education institutions: problems and directions of improvement in Ukraine. Problems and Prospects of Economics and Management, 1(13), 150-159.
- Kretovics, M. A., & Steve, O. M. (2005). Financing Higher Education in a Global Market. Algora, 314.
- Leshanych, L., Miahkykh, I., & Shkoda, M. (2018). Models Of Financing Of Higher Education Institutions In Foreign Countries. Baltic Journal of Economic Studies, 4(5), 145-150.
- Maassen, P. (2000). Models of Financing Higher Education in Europe, Center for Higher Education Policy Studies (CHEPS) University of Twente.
- Martínez-Campillo, A., & Fernández-Santos, Y. (2020). The impact of the economic crisis on the (in)efficiency of public Higher Education institutions in Southern Europe: The case of Spanish universities. Socio-Economic Planning Sciences, 71, 100771.
- Ministry of Education and Science of Ukraine. (n.d.). Stratehiia rozvytku vyshchoi osvity v Ukraini na 2021–2031 roky [Strategy for the development of higher education in Ukraine for 2021–2031]. (In Ukrainian).
- Nakonechnyi, O., Pashko, A., Kapustian, O., Zinko, T. & Shevchuk, I. (2019). Proceedings of the 2019 IEEE International Conference on Advanced Trends in Information Theory (ATIT-2019). Kyiv, Ukraine.
- Onuoha, L. (2013). Financing Higher Education in Nigeria: The Role of Internally Generated Revenues and How University Managements Can Maximize the Sources. Canadian Social Science, 9(1), 9-14.
- Patel, K., & Assaf, F. (2013). Improving Financial Stability for Community College Students. John F. Kennedy School of Government.
- Petlenko Yu., Pohribna N., & Biliavska O. (2021). The new approach to budgeting in modern universities. The Scientific Heritage, 3(66), 3-6.
- Petlenko, Y., Stavytskyy, A., & Kharlamova, G. (2021). Is the endowment fund a panacea for the financial autonomy of classical universities in Ukraine? Problems and Perspectives in Management, 19(3), 396-407.
- Publications Office of the European Union. (n.d.). The impact of COVID-19 on higher education. A review of emerging evidence: analytical report.
- Ryzhov, A. Y. (2006). A test of the hypothesis about the homogeneity of components of a mixture with varying concentrations by using censored data. Theory of Probability and Mathematical Statistics, 72, 145-155.
- Schinasi, G. J. (2004). Defining Financial Stability (IMF Working Papers, 2004(187), A001).
- Slovo i Dilo. Analytical Portal. (n.d.). Education financing: how much the state spends on Ukrainian universities. (In Ukrainian).
- Smalley, A. (2021). Higher Education Responses to Coronavirus (COVID-19).
- Stachowiak-Kudła, M., & Kudła, J. (2017). Financial regulations and the diversification of funding sources in higher education institutions: selected European experiences.
- Stein, M., Braun, W., Villà, M. S., & Binding, V. (2014). Monte Carlo Cash Flows and Sustainability: How to Decide on Going Green. The Journal of Sustainable Real Estate, 6(1), 143-162.
- Taras Shevchenko National University of Kyiv. (2012). Zvit rektora Kyivskoho natsionalnoho universytetu imeni Tarasa Shevchenka Guberskogo L. V. pro robotu z hrudnia 2011 roku po hruden 2012 roku ta zavdannia na nastupnyi rik [Report of the Rector of the Taras Shevchenko National University of Kyiv L. V. Gubersky on the work from December 2011 to December 2012 and tasks for the next year]. Kyiv: TSNUK. (In Ukrainian).
- Taras Shevchenko National University of Kyiv. (2013). Zvit rektora Kyivskoho natsionalnoho universytetu imeni Tarasa Shevchenka Guberskogo L. V. pro robotu z hrudnia 2012 roku po hruden 2013 roku ta zavdannia na nastupnyi rik [Report of the Rector of the Taras Shevchenko National University of Kyiv L. V. Gubersky on the work from December 2012 to December 2013 and tasks for the next year]. (In Ukrainian).
- Taras Shevchenko National University of Kyiv. (2014). Zvit rektora Kyivskoho natsionalnoho universytetu imeni Tarasa Shevchenka Guberskogo L. V. [Report of the Rector of the Taras Shevchenko National University of Kyiv L. V. Gubersky]. (In Ukrainian).
- Taras Shevchenko National University of Kyiv. (2015). Zvit rektora Kyivskoho natsionalnoho universytetu imeni Tarasa Shevchenka Guberskogo L. V. [Report of the Rector of the Taras Shevchenko National University of Kyiv L. V. Gubersky]. (In Ukrainian).
- Taras Shevchenko National University of Kyiv. (2016). Zvit rektora Kyivskoho natsionalnoho universytetu imeni Tarasa Shevchenka Guberskogo L. V. [Report of the Rector of the Taras Shevchenko National University of Kyiv L. V. Gubersky]. (In Ukrainian).
- Taras Shevchenko National University of Kyiv. (2017). Zvit rektora Kyivskoho natsionalnoho universytetu imeni Tarasa Shevchenka Guberskogo L. V. [Report of the Rector of the Taras Shevchenko National University of Kyiv L. V. Gubersky]. (In Ukrainian).
- Taras Shevchenko National University of Kyiv. (2018). Zvit rektora Kyivskoho natsionalnoho universytetu imeni Tarasa Shevchenka Guberskogo L. V. [Report of the Rector of the Taras Shevchenko National University of Kyiv L. V. Gubersky]. (In Ukrainian).
- Taras Shevchenko National University of Kyiv. (2019). Zvit rektora Kyivskoho natsionalnoho universytetu imeni Tarasa Shevchenka Guberskogo L. V. [Report of the Rector of the Taras Shevchenko National University of Kyiv L. V. Gubersky]. (In Ukrainian).
- Treve, M. (2021). What COVID-19 has introduced into education: challenges Facing Higher Education Institutions (HEIs).
- Woods, M. (2008). The Theory, History and Practice of Resource allocation Models in UK Universities. The Journal of Finance and Management in Colleges and Universities, 5, 139-155.
- Yang, L., Brotherhood, T., & Chankseliani, M. (2021). A crisis of opportunity at English universities: Rethinking higher education through the common good idea. Educational Review, 1-18.