Abstract
The 2008 financial crisis caused severe impact on the world economy. What influences would the challenging economic situation exert on top universities? This paper assesses such influences on five selected top universities. The paper finds that, the financial crisis has had major impact on the endowment of universities, but the endowment payout has been smoothed; with relatively stable research, tuition, and endowment income, private top universities have been less affected than public ones which rely more heavily on state government funding; and that these top universities took relatively moderate measures against the crisis. The paper also discusses the implications of this crisis to the top universities and to the building of top universities.
Highlights
In the summer of 2007, the financial crisis triggered by the surge of default cases in the United States subprime mortgage industry spread rapidly from the financial industry to the economy, creating a great impact on the economies of many countries
Since the profit-loss balance includes both income and expenses, we examine the influence of the financial crisis only on top universities’ relative levels of income and of expenses
This paper reviewed and compared the international financial crisis’s various influences on five top universities
Summary
In the summer of 2007, the financial crisis triggered by the surge of default cases in the United States subprime mortgage industry spread rapidly from the financial industry to the economy, creating a great impact on the economies of many countries. A majority of the states reduced spending on higher education or increased tuition fee to cope with insufficient funds. Some universities reduced their enrollment scale, and some even faced the risk of shutting down (Morey, 2004). Years have passed since the outbreak of this large-scale international financial crisis, and we can undertake a review of and draw conclusions about its influence on universities. The result of this analysis will increase understanding of the influence of financial crises and provide meaningful resources for the development of top universities in complicated economic environments
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