Financing in higher education and agency theory, [October, 27]

Welcome to the 2nd lecture of Peking-Tampere lecture series on Organization and Management in Higher Education!

Theme: Financing in Higher Education and Agency Theory.

Speaker: Dr.  Jussi Kivistö, Professor and the Head of Higher Education Group in Faculty of Management and Business, Tampere University, Finland.

Time: October 27, 2022

Introduction to Peking-Tampere lecture series

Lecture description:

ppt slides

Lecture recording

Agency theory has been widely applied as a theoretical and empirical framework in many different disciplines and contexts. Over the past years, higher education researchers have begun to apply the theory in a more concerted manner, especially to examine government–HEI relationships. More recently, the theory has been applied to a broader range of topics related to higher education, further expanding its application to new areas of higher education studies.

In this lecture we describe the basic characteristics of agency theory as well as its strengths and weaknesses in the context of higher education research. For empirical illustrations of the theory, primary emphasis will be given to the dynamics related to governance and funding of higher education institutions.

The lecture concludes by suggesting that agency theory offers clear and insightful framework for understanding the use of accountability mechanisms and incentive structures in all types of contractual relationships. However, the empirical value of agency theory is greatly limited by the narrowness of its focus and the simplicity of its basic assumptions related to human nature, behaviour and motivation.

Recommended readings:

Kivistö, J. (2008). An assessment of agency theory as a framework for the government–university relationship, Journal of Higher Education Policy and Management, Vol. 30, No. 4, November 2008, 339–350

Eisenhardt, K.M., (1989). Agency Theory: An Assessment and Review,  The Academy of Management Review , Jan., 1989, Vol. 14, No. 1 (Jan., 1989), pp. 57-74

Nikulaa, P-T, and Kivistö, J. (2017). Hiring Education Agents for International Student Recruitment: Perspectives
from Agency Theory, Higher Education Policy, 2018, 31, (535–557)

Speaker bio

Dr. Jussi Kivistö is Professor and the Head of Higher Education Group in Faculty of Management and Business, Tampere University, Finland. Kivistö has over 15 years of experience in teaching and coordinating in higher education management programmes in non-degree, master’s and PhD levels. Dr. Kivistö has authored around 130 academic publications, research reports or other professional publications. Dr. Kivistö collaborates actively with national and supranational agencies and organisations working in the field of higher education. His research interests include higher education management, policy, governance, and financing of higher education institutions.


Dr. Po Yang is an associate professor with tenure, chair of Department of Economics of Education and Administration, at the Graduate School of Education, Peking University, and a research fellow at China Institute of Education Finance Research, Peking University. She serves as the vice president of China Association of Education Finance Research, and has been working as consultant for the World Bank, Asian Development Bank, and Ford Foundation. Her main teaching and research areas of economics of education, education finance, and vocational and technical education reform evaluation. She has working experiences in leading research universities in the U.S.A., and the Netherlands. She has published in peer reviewed SSCI journals and received research grants from China’s National Science Foundation and Ministry of Education.