Managerial tenure under private and government ownership: the case of higher education
Economics of Education Review Volume 18, Number 1 ISSN 0272-7757 Publisher: Elsevier Ltd
The present paper offers statistical evidence which suggests that managers of firms in the higher education industry in the United States (universities and colleges) pursue a variety of goals consistent with economic theory in the context of firm ownership, and that the tenure of managers (university/college Presidents) in this industry differs according to the firm's organizational structure (public vs. private). The essentially non-transferable property rights (regarding government-owned firms) reduce incentives to police and detect managerial (in)efficiencies. Managers, therefore, face incentives to create internal decision-making processes which increase job security and tenure, along with other non-pecuniary sources of income and utility. Empirical results presented here point out that, ceteris paribus, the average tenure of public university presidents is about five years longer than their private counterparts, as a result of the disparity in incentive structures. ["JEL" D23, I21, I22, L33]
Mixon, F.G. & W. McKenzie, R. Managerial tenure under private and government ownership: the case of higher education. Economics of Education Review, 18(1), 51-58. Elsevier Ltd.