External funding of major capital projects in the UK Higher Education sector: issues of demand, supply and market timing?

Laura McCann (Corresponding Author), Norman Hutchison, Alastair Adair

Research output: Contribution to journalArticle

Abstract

The aim of this paper is to consider the sources of finance used to support major capital expenditure in the UK Higher Education sector and to reflect on any differences between traditional corporate finance theory and practice in the UK university sector. Utilising both HESA data returns and published annual accounts, an in-depth analysis using a logit structure is carried out on data from the top 63 UK universities over the period 2014–2017, to establish the range of funding sources adopted for major capital projects, all set within the context of the UK macro environment and a period of low interest rates. The research also carries out a survey of funders to understand the decision criteria used by lenders active in the Higher Education sector and a survey of university finance directors to determine the use of the funds, the reasons behind past lending decisions and to ascertain likely future demand for finance to fund major capital projects.
Original languageEnglish
Pages (from-to)97-130
Number of pages34
JournalJournal of Property Research
Volume36
Issue number1
Early online date18 Mar 2019
DOIs
Publication statusPublished - 2019

Fingerprint

higher education
finance
funding
supply
market
university
demand
finance theory
education
university sector
lending
interest rate
director
expenditures
expenditure
project
supply and demand
decision

Keywords

  • university funding
  • debt sourcing
  • bond finance
  • private placements

Cite this

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title = "External funding of major capital projects in the UK Higher Education sector: issues of demand, supply and market timing?",
abstract = "The aim of this paper is to consider the sources of finance used to support major capital expenditure in the UK Higher Education sector and to reflect on any differences between traditional corporate finance theory and practice in the UK university sector. Utilising both HESA data returns and published annual accounts, an in-depth analysis using a logit structure is carried out on data from the top 63 UK universities over the period 2014–2017, to establish the range of funding sources adopted for major capital projects, all set within the context of the UK macro environment and a period of low interest rates. The research also carries out a survey of funders to understand the decision criteria used by lenders active in the Higher Education sector and a survey of university finance directors to determine the use of the funds, the reasons behind past lending decisions and to ascertain likely future demand for finance to fund major capital projects.",
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