Corporate Governance and Performance in Chilean Universities

Abstract

The primary objective of this research study is to examine whether academic and economic performance of Chilean universities is related to their corporate governance model. Two nonparametric tests (Pearson’s chi-square and likelihood-ratio) of conditional independence are used. The results show that academic performance is statistically associated with university type (public and private). Public universities show the greatest drops in academic rankings (SCImago 2009-2018). Universities that use direct voting to select their presidents showed the greatest drops in university rankings. The best-ranked universities (public and private) tend to appoint presidents that have outstanding research profiles. Positive financial university outcomes (value creation) are directly and significantly correlated with presidents appointed by external committees (boards), and not via direct voting by academics. It is concluded that university performance is associated with how university presidents are appointed.