Marginal utility & service productivity: unveiling the mediating role of profitability

The objective of this study is to investigate the linkage between marginal utility and service productivity in higher education. The article uses data from a sample of 400 private university lecturers in Erbil, Kurdistan Region, Iraq and used structural equation modeling analysis to examine how marginal utility affects profitability and productivity. Results reveal that margin utility can accelerate the service delivery but don't increase profitability. Rather, profitability serves as a leading determinant of service productivity, it may also mediate the relationship between marginal utility and service performance. The results have significant implications for the governance of universities, where trade-offs between efficiency gains and financial sustainability are so often made. Theoretical contributions to the body of knowledge include marginal utility theory and its application in higher education, suggesting potential future research related to resource allocation and financial management. However, despite inherent constraints to regional focus and cross-sectional nature of the work under consideration in the existing study, these findings could be extended to wider viewpoints and follow-up periods for a more comprehensive understanding of the issue under investigation. JEL Codes: M10, D11, D12. Received: 05/03/2025. Accepted: 03/02/2026. Published: 09/07/2026.