How Political Influence and Financial Pressure Contribute to Performance-Based Budgeting and University Performance: Evidence fromSEM and NCA

Abstract

The economic downturn has led to a variety of challenges for higher education institutions, including budget cuts and a heightened focus on efficiency and effectiveness. Performance-based budgeting is gaining traction as a means of more efficiently allocating resources, and Chinese public universities are not an exemption. The main purpose of this study was to look into the relationship between political influence, financial pressure, performance-based budgeting, and university performance in China. It also explored power dynamics in Chinese public universities. 271 participants were chosen using a purposive sampling technique. This study employed a multimethod approach combining necessary condition analysis (NCA), the PROCESS macro, and partial least squares structural equation modelling (PLS-SEM). Furthermore, this study employed a novel technique (the Johnson-Neyman technique) to show the exact scope of the moderation effect. The findings of the PLS-SEM showed that performance-based budgeting is positively related to university performance and acts as a mediator between selected variables, and it also indicated that the moderated mediation model is validated in Chinese public universities. The NCA results showed that performance-based budgeting, political influence, and financial pressure are all important necessary conditions for university performance. Meanwhile, the outcomes of PLS-SEM and NCA showed how researchers and practitioners can pinpoint key elements that affect university performance and produce the best outcomes. Overall, this study provides useful information about the implementation of performance-based budgeting in higher education institutions.