This study aims to explore the impact of funding for higher education from basic local governments on the teaching and research functions of universities and the economic development of these local governments. It also seeks to understand how this fun...
This study aims to explore the impact of funding for higher education from basic local governments on the teaching and research functions of universities and the economic development of these local governments. It also seeks to understand how this funding for higher education, in conjunction with the teaching and research functions of universities, influences the economic development of the local governments. Additionally, the study examines whether the impact of higher education funding for higher education on economic development varies based on the teaching and research functions of the universities.
To achieve its objectives, the study addresses the following research questions: What impact does the total amount of funding for higher education from basic local governments have on the teaching and research functions of universities? What impact does the total amount of funding for higher education from basic local governments have on the economic development (GRDP, employment rate, unemployment rate) of the basic local governments? What impact does total amount of funding for higher education from basic local governments and the teaching and research functions of universities have on the economic development of the basic local governments? What impact does the amount of funding for higher education from basic local governments where universities are located have on the universities' teaching and research functions? What impact does the amount of funding for higher education from basic local governments where universities are located have on the economic development (GRDP, employment rate, unemployment rate) of the basic local governments? What impact does the amount of funding for higher education from basic local governments where universities are located and the universities' teaching and research functions have on the economic development of the basic local governments?
To address the research questions, this study first analyzed previous research on the role and functions of universities and regional development. This analysis identified variables corresponding to the teaching and research functions of universities. And an analysis of prior studies on funding for higher education and economic growth helped to identify variables related to the current state of higher education funding for higher education by basic local governments and their economic development.
Based on these findings, a model was developed to analyze the impact of funding for higher education from basic local governments and the teaching and research functions of universities on the economic development of these governments. For the analysis, panel data were constructed using data from 2016 to 2020 obtained from the Higher Education in KOREA, the Korean Statistical Information Service, and public information from basic local governments. The study excluded universities with unavailable or missing data and utilized data and total of 1,405 observations of 281 universities over five years were used in the empirical analysis. The number of basic local governments included in the analysis were 125.
To account for the time lag in the impact of explanatory variables on dependent variables, data from t-1 and t-2 time points were used. To address potential bias due to absolute size, the amount of funding for higher education from basic local governments was converted to per-student funding for higher education by dividing by the number of enrolled students at the beneficiary universities. The study also examined the impact of funding for higher education from basic local governments, controlling for funding for higher education from metropolitan governments and the central government, as well as the impact of funding for higher education from the basic local governments where the universities are located, controlling for funding from other local governments.
The analysis method took into account the potential violation of OLS assumptions due to the characteristics of panel data. To obtain consistent estimators, panel Generalized Least Squares (GLS) analysis was used. The results of the study are presented in the following sections.
The study presents detailed findings on the effects of higher education funding for higher education from the basic local governments on universities' teaching and research functions, as well as on the economic development of these governments. The findings are summarized as follows:
Per-student funding for higher education from basic local governments positively influenced several aspects of a university's teaching function (student enrollment rate, faculty-to-student ratio, per-student educational expenses, sustained employment rate, and doctoral graduates per 10,000 people) at statistically significant levels at t-1 and t-2 time points. However, it negatively affected the academic persistence rate.
For the research function of universities, per-student funding for higher education positively impacted the number of SCI-grade papers published per faculty member at both t-1 and t-2 time points, and positively influenced papers in registered journals at the t-2 time point.
Per-student funding for higher education was found to positively affect the per capita GRDP of basic local governments at the t-1 time point and increased employment rates and decreased unemployment rates in metropolitan and basic local governments.
Only the per-student funding for higher education showed a statistically significant positive impact on the per capita GRDP of basic local governments at the t-1 time point. Various aspects of university functions (like sustained employment rate, faculty-to-student ratio, and per-student educational expenses) had mixed impacts, with some showing negative effects on economic indicators.
Interaction terms between per-student funding for higher education from basic local governments and various teaching and research metrics showed that these interactions can either strengthen or weaken the positive impact of funding for higher education on economic indicators like GRDP, employment rates, and unemployment rates.
When controlling for higher education funding for higher education from other basic local governments, the per-student funding for higher education from the university-based local government had various positive impacts on education and research functions. However, its impact on economic indicators was not always statistically significant.
The overall impact of per-student funding for higher education from university-based local governments on economic development was generally positive for employment rates and reducing unemployment but varied based on the specific teaching and research functions of the universities. These findings highlight the multifaceted role that funding for higher education from basic local governments plays in influencing the teaching and research capacities of universities, and how these, in turn, affect the economic development of local regions.
Based on the findings, this study recommended ways to cooperate with universities and basic local governments, legal and institutional arrangements for cooperation, and future financial support performance management.
Keywords : Basic Local Governments’ Funding for Higher Education, Functions of Higher Education Institutes, Economic development, Local University, Regional Extinction, Regional Innovation System & Education(RISE)