Director: Daniel C. Levy

South Korean Universities May be Listed on Stock Market

(Entry by Kevin Kinser)

PROPHE Summary:

The South Korean government may allow universities to raise funds by selling shares on the stock market. Several other countries, including The United Kingdom, Australia, China, and the United States, have publicly traded universities, and Japan has also indicated an openness to the idea. In Korea, it is seen as a way of providing additional revenue to universities while encouraging them adopt innovating management strategies. In order for the proposal to move forward, however, universities in Korea would have to be permitted to operate as profit-making institutions. The government has yet to contact the Korean exchange to discuss the plan.

For the full story, see The Korea Times, December 2, 2005, "Universities May Be Listed on Bourse," by Kim Sung-jin.
http://times.hankooki.com/lpage/200512/kt2005120217133310230.htm

PROPHE Observation:

Although the number and acceptance of profit-making educational institutions is increasing, they still represent a minority of private sector institutions globally. Publicly-traded universities are even more unusual. In South Korea, a large private sector relies largely on tuition, but also receives modest government support. The stock market proposal suggests that additional revenue can be generated by allowing private investors to profit from an ownership stake in these institutions. In many countries, the distinctions between private for-profit and non-profit higher education are murky, with many legally non-profit institutions operating much like their for-profit cousins. By listing these private institutions on the stock market, however, the South Korean proposal would clarify their status, making them plainly for-profit entities. This would be a significant step for the government, which may prefer the current ambiguity to the possibility that students would resist attending overtly for-profit schools and thus pressure the state for more public resources for existing institutions.