Managerial Tenure Under Private and Government Ownership: The Case of Higher Education

Document Type

Article

Publication Date

2-1-1999

Department

Management and International Business

Abstract

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 nonpecuniary 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, 121, 122, L33] (C) 1998 Elsevier Science Ltd. All rights reserved.

Publication Title

Economics of Education Review

Volume

18

Issue

1

First Page

51

Last Page

58

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