Navigating University Autonomy: An Agency Theory Perspective on Indonesian State Universities

Abstract

This study examined how agency costs influenced the performance of Indonesian state universities with different autonomy levels: PTNBH and PTNBLU. It applied agency theory to understand how financial behavior shaped institutional outcomes. Secondary data from 2020–2023 were collected, including audited financial reports and Key Performance Indicator (IKU) scores. A saturated sampling technique was used to include all PTNBH and PTNBLU under the Ministry of Education. Agency costs were measured using the Operating Expense Ratio (OER) and Asset Turnover Ratio (ATR). An independent t-test and hierarchical regression were conducted to test differences and causal effects. PTNBH showed higher OER and ATR than PTNBLU, indicating both greater spending and stronger asset use. OER negatively affected performance, while ATR had a positive effect. University status moderated these relationships, supporting agency theory and New Public Management principles. Agency costs shaped university performance, especially under different autonomy regimes. A conceptual model was proposed to illustrate how autonomy, efficiency, and governance interacted in Indonesian higher education.