Exploring principal-agent theory in higher education research

Addisalem Tebikew Yallew, Henna Juusola, Ijaz Ahmad, Sari Törmälä


In this paper, we explore principal-agent theory and its’ application in higher education research by conducting Fink’s (2010) systematic literature review module. Data of this review consist of 14 articles from scientific journals in higher education research published between 2005 and 2016. After a systematic selection of the articles, descriptive synthesis is made. The findings of this review indicate that the principal-agent theory has been mainly used for topics related to system policy or institutional management. On the other hand, the theory was not applied to topics related to course design, student experiences or academic work. The analysis also indicates that principal-agent theory has not been widely used in higher education studies. This, as some of the researchers pointed out, might be due to the complexity of principal-agent relations in higher education institutions, besides behavior-based and outcome-based agency relations seem to be difficult to implement in higher education institutions.

Key words: principal-agent theory, agency theory, principal-agent model, agency problem, and higher education.

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