When Developing Countries Meet Transnational Universities: Searching for Complementarity Not Substitution

During the last two decades a growing number of universities, mainly from developed countries, have established campuses in developing countries. From the developing countries’ perspective, attracting foreign universities helps mitigate financial constraints and capacity shortages that impair the state’s ability to provide greater access to tertiary education, while also improving teaching and research in general. However, foreign universities may also be detrimental if they crowd-out their domestic counterparts. We explore different scenarios and policy options for
developing countries aiming to attract foreign universities, building upon a review of four case studies (from Chile, China, Kazakhstan and Malaysia). Our analysis suggests that policy-makers should provide incentives that properly align incoming foreign universities so that they
complement and strengthen the areas of weakness in the national tertiary education system.

Keywords
tertiary education; transnational university; international branch campus; embeddedness; crowding-out