Economic value creation and financial sustainability in Brazilian higher education institutions

Ronaldo Lamounier Locatelli, Alan Sales da Fonseca, José Edson Lara, Wendel Alex Silva

Abstract


Objective: The article aims to analyze the creation of economic value, as well as the value vectors and the impacts caused by the number of students, value of tuition and costs on the economic results achieved in a higher education institution (HEI).

Methodology/approach: This is a case study with adaptation of the EVA (Economic Value Added) model and the use of multivariate econometric analysis.

Relevance/originality: Despite the representativeness of private organizations in the educational sector in the Brazilian economy, academic articles were not identified dealing with their capacity to create value, which is one of the necessary conditions for self-sustained growth of an organization.

The main results: The University Center was able to generate value in the recent period. The disaggregated analysis showed the good performance of engineering and that most courses in the business area have destroyed the organization's value.

Theoretical/methodological contributions: An incursion into the theory of corporate finance made it possible to adapt methods and procedures that led to an adequate application to the study of value generation in a HEI. The study can be replicated and contributes for HEIs to incorporate the dimension of value generation in their management model.

Social contributions to management: Two segments were identified that demand differentiated strategies to improve the IES' market position. In the business area, given the competition, a policy of low prices is imposed, with revision/consolidation of the offer of courses. In the healthcare and engineering segment, the strategy to be followed is not price competition, but differentiation, with the pursuit of excellence being crucial.


Keywords


Higher education institutions; Value creation; Financial sustainability.

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DOI: https://doi.org/10.5585/riae.v21i1.18548

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