Agency Costs and Performance of UK Universities

This research aims to investigate the level of agency costs faced by the universities in the UK, and how these costs impact the performance of these universities. A sample of 118 government-funded universities has been selected to collect financial data regarding various proxies of agency costs and quality of education. The research has utilised a multivariate regression model and t-tests to study the impact of agency costs on the quality of education in the UK universities. The results costs indicate that the UK universities suffer from extremely high level of agency costs however, the impact of these costs on the performance of these universities is contrary to their impacts on performance of the organisations in other sectors, that is, these costs positively contribute to the quality of education in these universities.