Exploring determinants and their impact on financial sustainability of Malaysian public universities during the pandemic

The financial sustainability of Malaysian public universities during the COVID-19 pandemic has become a critical area of concern due to declining in the government’s budget and the unceasing growth in higher education costs. Due to their heavy reliance on student enrolment, research grants, and government funding, the revenue of Malaysian public universities is particularly vulnerable to the economic challenges posed by the COVID-19 pandemic. To date, studies that focused on the determinants of financial sustainability of Malaysian Higher Education Institutions (HEIs) during the pandemic COVID-19 is still limited. Thus, this study aimed at examining the determinants and their impact on financial sustainability of Malaysian public universities during the pandemic. This study adopts a quantitative research method and employs secondary data. Three years of financial data were collected from twenty (20) public universities’ annual reports. Determinants of financial sustainability is proxied by student enrolment, research grants, and government budget. Meanwhile, financial sustainability is measured using Return on Assets (ROA). The empirical findings show that student enrolment and research grants are the determinants that have a significant impact on the financial sustainability of Malaysian public universities during the COVID-19 pandemic. The results have implications for policymakers and the body of knowledge, who shall consider the importance of sufficient revenue to sustain the universities’ finances.