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University Competition and Transnational Education: The Choice of Branch Campus

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  • Poyago-Theotoky Joanna

    (School of Economics, La Trobe University, Melbourne, Victoria 3086, Australia GEOLAB, Ionian University, Corfu, Greece Rimini Centre for Economic Research (RCEA), Rimini, Italy)

  • Tampieri Alessandro

    (Faculty of Law, Economics and Finance, University of Luxembourg, Avenue de la Faencerie 162a, L – 1511 Luxembourg)

Abstract

We present a theoretical framework in which an elitist and a non-elitist university in a developed country compete by choosing admission standards and deciding whether or not to open a branch campus in a developing country. Students from a developing country attend university if either a branch campus is opened or, they can afford to move to the developed country. We find that the elitist university is more likely to open a branch campus. This result is reversed if the gain, in terms of prestige, to attend the home campus of the elitist university more than offsets a student’s mobility costs. A rise in the graduate wage increases the incentive for opening a branch campus, although this incentive is stronger for the elitist university.

Suggested Citation

  • Poyago-Theotoky Joanna & Tampieri Alessandro, 2016. "University Competition and Transnational Education: The Choice of Branch Campus," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 16(2), pages 739-766, June.
    • Handle: RePEc:bpj:bejtec:v:16:y:2016:i:2:p:739-766:n:9
    DOI: 10.1515/bejte-2015-0052
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    More about this item

    Keywords

    university competition; branch campus; admission standards; transnational education;
    All these keywords.

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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