The Role of Perceived Characteristics in Shaping Time-Driven Activity-Based Costing Adoption: Evidence from Private Universities in Malaysia

This study examines the role of perceived characteristics in shaping the adoption of Time-Driven Activity-Based Costing (TDABC) within Malaysian private universities. Despite increasing attention to cost efficiency and accountability in higher education, the implementation of TDABC remains limited. Guided by Rogers’ Diffusion of Innovations (DOI) theory, this research investigates how five perceived characteristics consist of relative advantage, compatibility, complexity, trialability, and observability that influence TDABC adoption decisions, with a particular focus on institutional readiness for change. Data was collected through a mixed-mode survey (Google Form and hand-delivered questionnaires) involving 316 managerial and administrative decision-makers across private higher education institutions. Using Partial Least Squares Structural Equation Modeling (PLS-SEM) via SmartPLS 4.0, the findings reveal that perceived characteristics significantly and positively influence TDABC adoption, demonstrating that decision-makers’ perceptions are central to innovation acceptance. Relative advantages and compatibility emerged as the most influential predictors, indicating that TDABC is more readily adopted when it is viewed as strategically beneficial and aligned with existing systems. The study contributes to both theory and practice by extending Rogers’ DOI model into the higher education cost-management context and offering empirical evidence from a developing-country perspective. Practically, the findings highlight the need for leadership support, effective communication, and adequate training to enhance institutional readiness and promote TDABC diffusion. This research provides valuable insights for policymakers, university administrators, and accounting professionals seeking to improve cost accuracy, efficiency, and sustainability through innovative costing systems.