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http://dx.doi.org/10.13106/jafeb.2021.vol8.no9.0273

Return-on-Investment Measurement and Assessment of Research Fund: A Case Study in Malaysia  

SANUSI, Nur Azura (Department of Economics, Faculty of Business, Economics and Social Development, University Malaysia Terengganu)
SHAFIEE, Noor Hayati Akma (Department of Economics, Faculty of Business, Economics and Social Development, University Malaysia Terengganu)
HUSSAIN, Nor Ermawati (Department of Economics, Faculty of Business, Economics and Social Development, University Malaysia Terengganu)
ABU HASAN, Zuha Rosufila (Department of Management and Marketing, Faculty of Business, Economics and Social Development, University Malaysia Terengganu)
ABDULLAH, Mohd Lazim (Department of Mathematics, Faculty of Ocean Engineering, Technology and Informatics, University Malaysia Terengganu)
SA'AT, Nor Hayati (Department of Social Ecology, Faculty of Business, Economics and Social Development, University Malaysia Terengganu)
Publication Information
The Journal of Asian Finance, Economics and Business / v.8, no.9, 2021 , pp. 273-285 More about this Journal
Abstract
This study estimates the financial value of return on investment (ROI) of research funds. Four simulation estimations are employed to measure ROI finance value that considers the outputs, outcomes, impacts and total ROI from the allocation input received. Research outputs, outcomes, and impacts can be quantitatively measured based on improvements to existing systems. In terms of input, the Malaysian government has allocated MYR301,350,000 for fundamental research in the 2021 budget compared with 2019, up 9.5 percent from 2019. It brings up the question: To what extent does the input of research funds allocated by the government yield a good return in outputs, outcomes, and impacts to the academic community, society, and country? The result of total ROI shows around MYR7 return is generated by researchers for each Malaysian ringgit channeled by the funder. More specifically, for a research project, it is more difficult to produce impacts and outcomes compared to research outputs. The positive return is evidence that all the allocated funds are beneficial to the stakeholders. The government can apply this approach in calculating ROI for evaluation and fund allocation to universities. Furthermore, the positive financial value of research output, outcome, and impact automatically contribute to a positive innovation environment in Malaysia.
Keywords
Fundamental Research; Applied Research; Funding; Financial Value; University Grants; Malaysia;
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