University Competition and Transnational Education: The Choice of Branch Campus

Joanna Poyago-Theotoky and Alessandro Tampieri

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: We present a theoretical framework in which an elitist and a non- elitist university in a developed country compete by choosing their admission standards and deciding whether or not to open a branch campus in a developing country. Students from a developing country attend university either if a branch campus is opened or if they can afford to move to the developed country. We characterise the equi- libria by focussing on the relationship between the investment costs of a branch campus and the graduate wage. There are three type of equilibria: (i) no branch campus, (ii) only the elitist university opens a branch campus and (iii) both universities engage in transnational education, opening a branch campus. Very high investment costs dis- courage the opening of a branch campus. A rise in the graduate wage increases the incentive for opening a branch campus, although this incentive is stronger for the elitist than the non-elitist university. Sur- prisingly, a government subsidy for opening a branch campus may be ineffective in increasing university attendance.

Keywords: University Competition; Branch Campus; Admission Standards; Transnational Education (search for similar items in EconPapers)
JEL-codes: F23 I23 L13 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-edu
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https://hdl.handle.net/10993/19112 (application/pdf)

Related works:
Journal Article: University Competition and Transnational Education: The Choice of Branch Campus (2016)
Working Paper: University Competition and Transnational Education: The Choice of Branch Campus (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:14-11

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