Financial Support for Higher Education in Ukraine: Efficience Issues and Prospects For Modernization

Житар, Максим Олегович (2025) Financial Support for Higher Education in Ukraine: Efficience Issues and Prospects For Modernization Європейський науковий журнал Економічних та фінансових інновацій, 18 (4). pp. 1-11. ISSN 2617-8648

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Abstract

The article presents a comprehensive study of the current state and efficiency of financial support mechanisms for Ukrainian higher education institutions under conditions of prolonged economic transformation and integration into the European Higher Education Area. Drawing on a panel dataset covering 52 universities for 2018–2024, the paper analyses the dynamics of budgetary and extra-budgetary revenues, the structure of expenditures, and the levels of financial autonomy and digital maturity in financial management. It shows that the average share of budget funding amounts to 76–78% versus 12–16% of total extra-budgetary resources, which makes the sector highly sensitive to fiscal fluctuations. The study identifies the inertia of the existing state funding formula, which is predominantly oriented towards quantitative parameters, and the secondary role of qualitative indicators (graduate employment, international contracts, share of extra-budgetary funds). A panel regression model with fixed effects demonstrates that the key statistically significant determinants of the composite efficiency indicator are the extra-budgetary share, institutional autonomy, and digitalization, whereas the sheer volume of funds without changes in structure and practices yields a lower return. The analysis also highlights the underutilized potential of endowments and alumni relations programmes (only 6% and 9% of institutions respectively) and models diversification scenarios capable of adding +8–12% of an average university’s annual budget under transparent spending-rule conditions for endowment income. A regional analysis reveals a 20–25% funding lag per student in frontline and de-occupied territories alongside a two- to three-fold increase in security and logistics costs; in the model, the introduction of risk-adjustment coefficients and stabilization development grants mitigates up to 70% of the gap within two budget cycles. The results of modelling three policy packages are summarised: (1) a multi-criteria formula with higher weights for quality provides a fairer redistribution without increasing the overall budget; (2) combining autonomy, accountability, and digitalization reduces unproductive expenditures by 8–10% over three years; (3) diversification of revenue sources up to ≈30% of extra-budgetary share doubles the investment coefficient for development. Taken together, these measures reduce vulnerability to fiscal shocks, narrow regional disparities, and enhance competitiveness on the European higher education market. The article offers evidence-based approaches to modernizing the financing system of Ukrainian universities through combining budgetary and extra-budgetary resources, improving performance-oriented funding models, and strengthening institutional financial autonomy.

Item Type:	Article
Uncontrolled Keywords:	financial support; higher education institutions; budgetary and extra-budgetary funding; performance-oriented formula; financial autonomy; digital maturity; revenue diversification; regional asymmetry
Subjects:	Статті у періодичних виданнях > Фахові (входять до переліку фахових, затверджений МОН)
Divisions:	Факультет економіки та управління > Кафедра фінансів
Depositing User:	Професор Максим Олегович Житар
Date Deposited:	22 Oct 2025 07:03
Last Modified:	22 Oct 2025 07:03
URI:	https://elibrary.kubg.edu.ua/id/eprint/53477

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