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Financial Clout, Global Reputation and Governance in UK Higher Education Institutions

Arshad Hasan, Waqas Anwar, Mohamed Elmagrhi Orcid Logo, Collins Ntim

Financial Accountability & Management, Pages: 1 - 62

Swansea University Author: Mohamed Elmagrhi Orcid Logo

Abstract

This paper investigates the link between financial clout and the global reputation of higher education institutions (HEIs), and consequently examines the extent to which the financial clout–global reputation nexus is moderated by HEIs’ governing board mechanisms. Using a sample of UK HEIs from 2015...

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Published in: Financial Accountability & Management
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URI: https://cronfa.swan.ac.uk/Record/cronfa68659
first_indexed 2025-01-09T20:34:05Z
last_indexed 2025-01-09T20:34:05Z
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spelling 2025-01-07T20:00:43.2413931 v2 68659 2025-01-07 Financial Clout, Global Reputation and Governance in UK Higher Education Institutions 4def956b7e2d996ad0bfbfcb710b7ef6 0000-0003-3803-8496 Mohamed Elmagrhi Mohamed Elmagrhi true false 2025-01-07 CBAE This paper investigates the link between financial clout and the global reputation of higher education institutions (HEIs), and consequently examines the extent to which the financial clout–global reputation nexus is moderated by HEIs’ governing board mechanisms. Using a sample of UK HEIs from 2015 to 2022, we find that financial clout, as measured by higher financial flexibility and greater operating efficiency, positively impacts HEIs’ global reputation. Specifically, we find that high financial flexibility, as captured by greater research grants and contracts, positively influences HEIs’ global reputation. In contrast, low financial flexibility, as captured by tuition fees dependency and reliance on funding body grants, negatively impacts HEIs’ reputation. Furthermore, we find that greater operating efficiency, as measured by net cash inflow from operating activities and net liquidity days, positively impacts HEIs’ global reputation. However, a higher net surplus margin negatively impacts HEIs’ global reputation, which may imply ineffective utilisation of excess resources on core teaching/research facilities. Further, we find that the extent to which financial clout influences HEIs’ global reputation is moderated by the quality of board governance mechanisms. Our findings offer empirical support for neo-institutional theory, which suggests that obtaining institutional legitimacy can help HEIs build competitive advantages, achieve a higher perception of quality, and ultimately achieve a higher global reputation. Our findings also offer important policy implications that emphasise the need for adopting governance practices that balance short-term financial health with long-term academic excellence. Journal Article Financial Accountability & Management 1 62 Higher Education Institutions, Financial Clout – Financial Flexibility and Operating Efficiency, Higher Education Institutions’ Reputation, Governance Mechanisms, UK. 0 0 0 0001-01-01 COLLEGE NANME Management School COLLEGE CODE CBAE Swansea University Not Required NA NA 2025-01-07T20:00:43.2413931 2025-01-07T19:51:02.6871199 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Arshad Hasan 1 Waqas Anwar 2 Mohamed Elmagrhi 0000-0003-3803-8496 3 Collins Ntim 4
title Financial Clout, Global Reputation and Governance in UK Higher Education Institutions
spellingShingle Financial Clout, Global Reputation and Governance in UK Higher Education Institutions
Mohamed Elmagrhi
title_short Financial Clout, Global Reputation and Governance in UK Higher Education Institutions
title_full Financial Clout, Global Reputation and Governance in UK Higher Education Institutions
title_fullStr Financial Clout, Global Reputation and Governance in UK Higher Education Institutions
title_full_unstemmed Financial Clout, Global Reputation and Governance in UK Higher Education Institutions
title_sort Financial Clout, Global Reputation and Governance in UK Higher Education Institutions
author_id_str_mv 4def956b7e2d996ad0bfbfcb710b7ef6
author_id_fullname_str_mv 4def956b7e2d996ad0bfbfcb710b7ef6_***_Mohamed Elmagrhi
author Mohamed Elmagrhi
author2 Arshad Hasan
Waqas Anwar
Mohamed Elmagrhi
Collins Ntim
format Journal article
container_title Financial Accountability & Management
container_start_page 1
institution Swansea University
college_str Faculty of Humanities and Social Sciences
hierarchytype
hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
document_store_str 0
active_str 0
description This paper investigates the link between financial clout and the global reputation of higher education institutions (HEIs), and consequently examines the extent to which the financial clout–global reputation nexus is moderated by HEIs’ governing board mechanisms. Using a sample of UK HEIs from 2015 to 2022, we find that financial clout, as measured by higher financial flexibility and greater operating efficiency, positively impacts HEIs’ global reputation. Specifically, we find that high financial flexibility, as captured by greater research grants and contracts, positively influences HEIs’ global reputation. In contrast, low financial flexibility, as captured by tuition fees dependency and reliance on funding body grants, negatively impacts HEIs’ reputation. Furthermore, we find that greater operating efficiency, as measured by net cash inflow from operating activities and net liquidity days, positively impacts HEIs’ global reputation. However, a higher net surplus margin negatively impacts HEIs’ global reputation, which may imply ineffective utilisation of excess resources on core teaching/research facilities. Further, we find that the extent to which financial clout influences HEIs’ global reputation is moderated by the quality of board governance mechanisms. Our findings offer empirical support for neo-institutional theory, which suggests that obtaining institutional legitimacy can help HEIs build competitive advantages, achieve a higher perception of quality, and ultimately achieve a higher global reputation. Our findings also offer important policy implications that emphasise the need for adopting governance practices that balance short-term financial health with long-term academic excellence.
published_date 0001-01-01T20:37:08Z
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score 11.04748

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