A Test of Resource Dependency Theory Using Institutional Expenditure Changes After Merit Aid Program Adoption

• In Event: 61.071 - Sheraton Roundtable Session 10 - Grand Centre
  In Roundtable Session: 61.071-7 - Theoretical Considerations of Organizational Culture and Change in Higher Education

Abstract

The purpose of this study was to analyze whether four-year, public institutions altered their expenditure behaviors as their revenue streams changed. I utilized state based merit aid adoption to examine whether institutions altered their expenditures after becoming more resource dependent on students. A difference-in-difference identification strategy was utilized. The findings indicated that after merit aid adoption in their state, institutions altered their behaviors in ways that indicated they became more resource dependent on students even though the main source of funding remained the state. The findings of this study suggest that if states direct funds to students that institutions will respond as though the students provide the funding and not the state.

Author

• Jason Evans, University of Missouri - Columbia