Financing Business School Education: What Are the Economic Returns and Implications for Africa?

To be able to finance their physical assets and working capital costs, business schools mainly raise funds from any or a combination of the following: direct funding by the public sector or the government; income from providing educational services; debt (bank and bond); equity by private owners; public-private partnerships; research grants; and private sector endowment funds. This is a financing decision. But, it is the capital budgeting decision that matters! Business schools have to yield positive economic rates of return to become viable and attractive investment propositions; they must also yield positive non-pecuniary benefits. This paper provides a selective survey of the evidence on the core question of the rate of return to university education, and points out policy implications for business school education in Africa.