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Adoption of Activity-Based Costing: A Survey of the Education Sector of Greece

Author

Listed:
  • John Sorros

    (University of Piraeus)

  • Alkiviadis Karagiorgos

    (University of Piraeus)

  • Nikos Mpelesis

    (University of Piraeus)

Abstract

The need to invest in education becomes evident during difficult economic periods. Nevertheless, the lack of sufficient financial resources leads educational institutes to form competitive cost strategies. Despite the increasing competition in the education sector, educational institutes usually refrain from using complex cost methods to improve their operations. In this study, we chose the activity-based costing (ABC) method to understand the reaction of educational institutes when they are confronted by the implementation of innovative cost methods. An institute willing to implement ABC should be capable of comprehending the associated operational adjustments. This study investigates the education sector’s potential in adapting to the ABC method to improve cost management. Additionally, factors that prevent educational institutes from making cost strategy reforms were also observed. Initially, we conducted semi-structured interviews of experts to develop our research instrument. The survey was then applied to 152 educational institutes located in the seven most populous regions of Greece. The findings of the hierarchical regression analysis indicate that educational institutes are not capable of accurately allocating costs and they lack specific data concerning overheads. However, the sector is more eager to implement sophisticated methods for increasing competitiveness than was anticipated.

Suggested Citation

  • John Sorros & Alkiviadis Karagiorgos & Nikos Mpelesis, 2017. "Adoption of Activity-Based Costing: A Survey of the Education Sector of Greece," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 23(3), pages 309-320, August.
    • Handle: RePEc:kap:iaecre:v:23:y:2017:i:3:d:10.1007_s11294-017-9640-1
    DOI: 10.1007/s11294-017-9640-1
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    References listed on IDEAS

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    1. George Psacharopoulos, 2003. "The Social Cost of an Outdated Law: Article 16 of the Greek Constitution," European Journal of Law and Economics, Springer, vol. 16(2), pages 123-137, September.
    2. Livanos, Ilias, 2009. "The Relationship Between Higher Education and Labour Market in Greece: the Weakest Link?," MPRA Paper 16239, University Library of Munich, Germany.
    3. Paul Cropper & Roger Cook, 2000. "Developments: Activity-Based Costing in Universities—Five Years On," Public Money & Management, Taylor & Francis Journals, vol. 20(2), pages 61-68, April.
    4. Andrew Goddard & Kean Ooi, 1998. "Activity-Based Costing and Central Overhead Cost Allocation in Universities: A Case Study," Public Money & Management, Taylor & Francis Journals, vol. 18(3), pages 31-38, July.
    5. Carlos Manuel Ferreira Lima, 2011. "The Applicability of the Principles of Activity-Based Costing System in a Higher Education Institution," Economics and Management Research Projects: An International Journal, Open Access International Journals, vol. 1(1), pages 57-65, June.
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    Cited by:

    1. Hudáková Stašová, Lenka, 2020. "Statistical analysis of suitability of the activity based costing method in agricultural enterprises," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 6(4), December.

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    More about this item

    Keywords

    Activity-based costing; Education; Greece; Cost strategy;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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