Adopting the Hirschman-Herfindahl Index to estimate the financial sustainability of Vietnamese public universities

Over several decades, the Vietnamese government has increasingly cut its investment in the public higher education system and has also introduced a cost-sharing mechanism. Under this scheme, Vietnamese public universities have been seeking other sources of revenue. Despite the bold emphasis on the need for revenue diversification in higher education in Vietnam, there is little empirical evidence of the status quo of Vietnamese public higher education finance. The purpose of this paper was to fill this research gap by using the Hirschman-Herfindahl Index to estimate the degree of financial diversity in 51 public universities in Vietnam between 2015 and 2017. Our findings revealed that all institutions in this study were unsustainable due to their weak financial diversity. Suggestions for policy makers and university leaders that may enhance financial sustainability include the adoption of performance-based financial allocations and the implementation of capacity-building programs for universities with regard to fund-raising and entrepreneurship skills.

Trung Thanh Le, Thuy Linh Nguyen, Minh Thong Trinh, Mai Huong Nguyen, Minh Phuong Thi Nguyen, Hiep-Hung Pham