(Trans)regional embeddedness and the resilience of offshore campuses

ABSTRACT

Regional embeddedness plays an important role for universities. We show that for transnational subsidiaries of universities, or offshore campuses, which are necessarily transregionally embedded through their relations to their home university campus and its networks, the level of regional embeddedness is also of critical importance. We define four dimensions of regional and transregional embeddedness: partnerships, government funding, faculty and staff, and student recruitment. Based on qualitative interviews conducted before and at the onset of the COVID-19 pandemic and a global survey of offshore campus managers during the pandemic, we show how campuses with strong regional embeddedness seem to have been more resilient in the face of the COVID-19 crisis than those campuses which are less strongly regionally embedded. Nonetheless, regional embeddedness of institutions is no panacea and its risks and trade-offs with transregional embeddedness should be carefully weighed by higher education managers.

KEYWORDS:

• regional embeddedness
• resilience
• higher education
• international branch campuses
• COVID-19

1. INTRODUCTION

Universities are, as we know, ‘always necessarily embedded’ (Cochrane & Williams, 2013, p. 53). Much of the literature on universities and higher education institutions takes their regional embeddedness as given and examines their regional economic effects (e.g., Kempton et al., 2021). Recent regional studies on universities have shown how they perform important economic and societal functions in the places in which they are located, in particular for economic vitality of peripheral regions (Benneworth, 2018). The economic geographic literature has pointed to the manifold direct positive spatial effects of universities in regions, for instance, in debates around their contribution to ‘regional innovation systems’ (Asheim et al., 2011; Caniëls & van den Bosch, 2011). The relationship between higher education institutions and regional actors is often seen as mutually beneficial, as the region benefits from human capital development and spillovers of knowledge and innovation, although it is much harder for these benefits to be realized in peripheral or ‘lagging’ regions (Kempton et al., 2021).

The strong and necessary regional embeddedness of universities within their campus locations becomes more tenuous in the case of transnationally operating universities with several campus locations in different countries. These international branch campuses or offshore campuses, that is, the physical presences of higher education institutions offering their degrees abroad, are necessarily linked to both their place of origin and their host location. Shams and Huisman (2014) classify this as the ‘dual embeddedness’ of offshore campuses, which they largely apply to the localization of academic programmes. Dual embeddedness can be understood more broadly as a choice between increasing local embeddedness within the campus’ host region or remaining strongly embedded within its place and institution of origin. This is a strategic matter of choice not only of universities but also of governments, as in some instances offshore campuses are deliberately kept in a state of disembeddedness by the governments of their host locations (Rottleb & Kleibert, 2022). The dual embeddedness distinguishes offshore campuses from traditional universities.

The question of regional embeddedness of universities and what type of impact they have on their region becomes particularly relevant in moments of crisis. The making of economically resilient regions (Bristow & Healy, 2020) has become a topical debate, including the evaluation of regional resilience following the COVID-19 pandemic (Gong et al., 2020). Our focus is on the resilience of institutions, which are assumed to have indirect but profound effects on regions well-being and ability to absorb shocks and recover from crisis. The COVID-19 pandemic and states’ measures to contain its consequences as a disruptive force has had repercussions on most higher education systems in the world. Offshore campuses are considered to be particularly risky investments. In contrast to traditional universities, which carry the name of their city and can operate for hundreds of years within the same region, offshore campuses have a much higher risk of relocation and/or closure (Altbach, 2010; Kleibert et al., 2021). To date, not enough is known about offshore campuses’ vulnerability and resilience to sudden shocks and the role of campuses’ (trans)regional embeddedness.

Our study addresses the following questions:

• How are offshore campuses embedded within both their host regions and within their countries of origin?

• How does regional embeddedness affect campuses’ abilities to mitigate the impact of the COVID-19 pandemic?

Our contribution is two-fold. We analytically differentiate regional and transregional embeddedness along key dimensions and explain different offshore campus strategies across regional contexts on the basis of qualitative interviews. Second, we exploratively assess how different dimensions of regional embeddedness have affected offshore campuses’ abilities to mitigate the impact of the COVID-19 pandemic on the basis of an online survey of branch campus managers.

The remainder of the paper is structured as follows. We briefly discuss the literature on embeddedness of higher education institutions, and particularly offshore campuses and outline our methodology. We then present our conceptualization of regional and transregional embeddedness as well as first insights on the role of regional embeddedness and the resilience of offshore campuses. We conclude with critical reflections on the limitations of regional embeddedness for offshore campuses.

2. EMBEDDEDNESS OF UNIVERSITIES: FROM PLACE-BASED TO MOBILE INSTITUTIONS

Universities are place-based institutions that traditionally are strongly linked to their immediate regional surroundings. Although they are active at different scales and have been international institutions since the Middle Ages in Europe, many of their most direct effects operate at the regional scale. A vital body of literature has discussed the manifold economic effects of higher education institutions for regions, including their contribution to human capital formation, the spillover of knowledge and innovation, and their indirect contributions through wages and consumption effects (e.g., Glückler et al., 2018; Lawton-Smith, 2006). Beyond these effects, universities are civic institutions that can perform important societal roles for regional communities (Goddard et al., 2016).

The mere existence of universities, however, does not automatically guarantee the formation of regional innovation and development, which depend also on existing regional conditions (Arbo & Benneworth, 2007; Kempton et al., 2021; Power & Malmberg, 2008). In this literature, higher education institutions and universities are largely seen as relatively stable, place-based institutions. From a policy perspective, high hopes are usually attached to the ability of regions to foster regional economic development, which also depends on the degree to which universities are embedded within their regions and become active regional actors.

Embeddedness has become a key concept in human geography, which can be traced back to the work of Polanyi and Granovetter and encompasses different answers to the key question of who gets embedded in what (Hess, 2004). Economic geographers have used the term to describe the extent and nature of the interactions between an economic actor and its socio-economic surroundings, and how these relations determine economic outcomes. Analytically, we can distinguish different closely interrelated dimensions that form ‘the space–time context of socio-economic activity’ (Hess, 2004, pp. 178ff.). Much economic geographical analysis has focused on the transnational firm as an actor in local or regional settings and its local linkages. These can be termed regional embeddedness, defined as all those forms of embeddedness that are more local in scale, usually at the level of the (city-)region but which stretch also to national government actors in firms’ subsidiaries host context. We differentiate this from transregional embeddedness, which classifies longer distance linkages to actors and territories outside of the firms’ host region, such as the headquarter location.

The higher education studies and policy literature has focused on a specific form of transnational higher education institutions, which are by definition less closely attached to the regions in which they operate, namely offshore campuses. Offshore campuses are subsidiaries of higher education institutions operating across national borders and delivering transnational (i.e., foreign) degrees. The number of such campuses has increased over time and amounts to close to 500 in 2020, with concentrations in global-city regions in the Arab Gulf states, Southeast Asia and China (Kleibert et al., 2020).

The existing literature from the field of international business and higher education management reads the challenges of dual embeddedness of campuses within the institutions' home and host context largely as a managerial issue of curriculum localization versus the transplantation of ‘global’ (i.e., home context) standards (Healey, 2018; Shams & Huisman, 2012, 2014). The regional embeddedness of the providers (universities’ subsidiaries) rather than their programmes has not yet been subject to in-depth analysis. Limited research has been conducted on the role of partnerships for offshore campuses’ success. While partnerships are generally seen as positive and as reducing financial risks for foreign investors, much of the literature does not systematically analyse the differences between public or private, higher education or non-education business partners (Harding & Lammey, 2011). Neither has the origin of faculty and staff nor that of students been discussed in relation to the embeddedness of higher education institutions within their regions.

Following a brief description of our methodology, we develop a conceptualization of regional embeddedness and transregional embeddedness of offshore campuses along four key dimensions based on our research findings. We then apply this conceptualization of embeddedness to understand the impacts of the COVID-19 pandemic on differentially embedded offshore campuses.

3. METHODOLOGY

Our analysis draws upon 56 qualitative interviews conducted with offshore campus managers between 2019 and 2020 in Malaysia, Singapore, Oman, Qatar and the United Arab Emirates, as well as on an online survey conducted during a four-week period in early 2021, capturing campus managers’ perceptions around a year after the beginning of the COVID-19 pandemic. The majority of interviews took place before the pandemic and thus provide an overview of the ex-ante state of offshore campuses before the COVID-19 outbreak. The interviews focused on the reasons why campuses were established, the role of regional actors and governments in attracting campuses (including the role of subsidies), their business models (including joint ventures and other types of academic and business partnerships), and their dependence on international or domestic faculty, staff and students as well as on present and potential future challenges of the campuses.

Early in 2021 we launched an online survey assessing senior executives’ perceptions on the consequences of the pandemic for offshore campuses, including impacts, adaptation strategies and future strategic directions around a year after the beginning of the pandemic. The questionnaire comprised 26 questions, most of which offered answer options on five-point Likert scales plus an optional box for open answers. The questionnaire was pretested by two social scientists with research experience in transnational education and economic geography. The questionnaire was individually emailed to a total of 81 campus managers with whom we had been in prior contact during the qualitative research phase and distributed to further 290 offshore campus managers based on desk-top research. In total, 29 offshore campus managers participated anonymously in the survey. Although the response rate for our direct emails was 14% (rather satisfactory for an online survey), the small overall sample size does not allow for generalizations on the basis of advanced statistical analysis. We therefore conducted a descriptive statistical analysis of our data survey data with Stata and thematically analysed our qualitative interview data with MaxQDA. On the combined basis we show that, from the perspective of offshore campus managers, regional embeddedness matters for the resilience of offshore campuses, particularly in moments of crisis such as the COVID-19 pandemic.

4. THE (TRANS)REGIONAL EMBEDDEDNESS TRADE-OFF OF OFFSHORE CAMPUSES

Whereas domestic higher education institutions are traditionally place based in the region of their origin and subsequently develop transregional partnerships and linkages, for offshore campuses it is necessarily the other way round. As international subsidiaries their starting point is the transregional connections, mostly to their parent institutions, and ties to their regional environments take extra work to establish. We thus analytically distinguish between these two different embeddedness forms offshore campuses can take: they can be transregionally embedded, meaning strongly fostering the relations to their country of origin or third countries; and they can be regionally embedded, understood as developing strong ties to their host country. It is important to understand transregional and regional embeddedness as trade-offs, which can each present opportunities and limitations for offshore campus operations.

The scope of this trade-off is far from being limited to the localization of course contents and the adaptation of curricula (i.e., the programmes; Shams & Huisman, 2014) and instead stretches to the broader localization of the institution itself (i.e., the provider). To explore this institutional localization of providers, we develop four dimensions of transregional and regional embeddedness in Table 1: partnerships, governmental funding, origin of faculty and staff, and students. In the following we illuminate each of these dimensions in more detail, unpacking the opportunities and risks for offshore campuses generated through developing stronger regional embeddedness.

Table 1. Offshore campus strategies between transregional and regional embeddedness.

Dimensions of embeddedness	Transregional embeddedness (home or third country)	Regional embeddedness (host country)
Partnerships	Partnerships with other non-domestic academic and business partners	Joint ventures with domestic universities, business partners and infrastructure providers
Governmental funding	Funding from home government through subsidies of offshore campus export (e.g., subsidies by sending countries’ governments such as the German Academic Exchange Service	Direct host government funding (e.g., Qatar Foundation), incentives for setting up offshore campuses (e.g., rent-free land and infrastructure)
Faculty and staff	International staff and faculty on secondments, flying faculty from the home campus	Faculty recruited domestically on local contracts
Students	Dependence on international students, long and short term (including from the home campus)	Reliance on the recruitment of domestic students

Source: Authors.

4.1. Partnerships

The regional embeddedness of foreign subsidiaries is foremost understood through the subsidiaries’ linkages with domestic firms’ networks and supplier partnerships. Offshore campuses can operate as stand-alone businesses, but oftentimes are operated in partnership with government actors, academic institutions or private commercial actors (Kosmützky, 2018, p. 4). The type and quality of local partnerships is considered highly relevant for the successful operation of a campus (Wilkins & Huisman, 2012). Transregional partnerships usually do not extend beyond the home institution, though in some cases alliances between different sending institutions are forged (e.g., the British University Vietnam, which includes Staffordshire University and the University of London). Local partnerships can provide a number of benefits to foreign institutions, including a reduction of financial risks, which is often shared between the partners. Some institutions provide the academic content and let the business partner take care of all operational elements of the campus, in some instances even including student recruitment. These joint venture partners do not need to appear in the name of the offshore campus (e.g., University of Nottingham in Malaysia was in fact a joint venture with Malaysian government-linked holdings company Boustead). Generally, only joint ventures with other academic institutions appear in the name, for instance, Yale-NUS College (Yale University and the National University of Singapore) or XJTLU (Xi’an Jiaotong-Liverpool University). These provide broader benefits in terms of linking with existing institutions and benefiting from their market knowledge, brand value and opportunities for academic exchange.

In the context of the two emirates of Dubai and Ras al-Khaimah, most campuses operate with ‘infrastructure providers’, organizations that provide funding and infrastructure into which the foreign academic institutions can simply plug-in. Moreover, local partnerships may bring regulatory advantages for transnational providers and help foreign universities to prepare for the local legal and regulatory requirements (Harding & Lammey, 2011), as frequently mentioned by our respondents. Close partnerships with local public institutions help offshore campuses to operate more smoothly, creating a competitive advantage in the perception of the respective managers. A respondent from Dubai explains the relation with their partners as ‘they want you to grow, they want you to succeed, that means, they can help and tweak policies’, another manager from Doha mentions their partner as helpful in approving visas, which requires a ‘patron who goes to bat for you’. Forging beneficial partnerships with relevant local actors can, hence, be conceptualized as a relevant dimension of the regional embeddedness of campuses.

4.2. Governmental funding

Institutions decide to set up offshore campuses for a variety of reasons, including the hope for reputational and financial gains through their international expansion. Initially, this may be supported by transregional financial flows, for instance, through the German Academic Exchange Service (DAAD), which funds certain transnational education programmes form Germany. It is more common for host governments to play a vital role in ‘inviting’ foreign institutions and attracting, enticing and funding their operations in different ways. The Qatari government, for instance, provides elite US institutions that operate in Doha’s ‘Education City’ with generous funding. In Singapore, several higher education institutions have received state subsidies or incentives in the form of free or below market-value land or infrastructure for their campuses. In both countries, the forms of financial governmental support are not applied across the board, but are granted to individual institutions. It thus depends on the individual institutions’ direct links and their embeddedness into the social and political networks to be able to receive funding. The dependence on public funding from the host government can prove difficult, if programme localization (including pressures on academic freedom) is required by host governments. Moreover, offshore campuses become vulnerable towards wider political and economic dynamics and resulting budget reshuffling of host governments. This was reported, for example, by managers in Qatar, Oman and Singapore, where many offshore campuses had to realign their operations according to budgetary reconsiderations of their host governments.

4.3. Staff and faculty

Transregional embeddedness of offshore campuses is most visible through integration into the home universities’ administration. This includes the reliance on management decisions taken by senior management at the home campus or seconded staff and international faculty on short-term contracts, including so-called ‘flying-faculty’ from the main campus, who teach classes in block format of a few weeks and then return home. For foreign universities, having qualified teaching staff is an essential part of delivering transnational education programmes and operating offshore campuses abroad. Depending on context and case, it is arguably important for foreign universities to have lecturers from the parent campus on-site for creating an international atmosphere and selling their foreign brand abroad (Shams & Huisman, 2014) as well as for transferring the institution's ‘DNA’ to the offshore campus (Salt & Wood, 2014). Expatriation, secondments and/or flying in faculty on a very short-term basis are, hence, commonly used staffing models for building up offshore campus operations. However, our interviews reveal that most offshore campuses have moved beyond these models and have started to employ faculty under local contracts and contract terms. Hiring local faculty and staff may bring substantial financial benefits, as it saves the universities travel expenses and on-site wages tend to be lower at the campus destinations, for instance in Malaysia. Overall, this practice of staff localization leads to a deeper regional embedding of campuses.

4.4. Student recruitment

Finally, the origin of the students taught at the offshore campuses can be a source of transregional or regional embeddedness. Offshore campuses use different strategies to recruit students, tying into different forms of international student mobilities and immobilities (Kleibert, 2022). Offshore campuses may draw in a multitude of international students, either from neighbouring countries and the macro-region or students from the home country of the campus (often as exchange students), and thus rely on larger numbers of border-crossing students. The campus manager of a campus in Singapore, for instance, shared that about 99% of their master’s students are recruited as international students, many of them from India or China. Other institutions may cater explicitly to domestic students in their host countries. These are often set up with the explicit aim to deliver international degrees to domestic students – as an alternative to teaching them as international students at the home campus. In this case, the student base is recruited regionally or nationally. Often this takes the form of recruiting students who are unable or unwilling to migrate to the institutions’ home country but would still like to receive an international degree. They thus expand the offer of study programmes for domestic students within the region.

The level of (trans)regional embeddedness thus also depends on the number of domestic versus international students. It is important to note that the category ‘international students’ strictly refers to whether students have migrated for the purpose of study and should not be conflated with nationality, ethnicity or citizenship, as for instance many children of expatriate workers in the Arab Gulf states lack citizenship of their places of birth but study ‘locally’ when they enrol at a university in Dubai.

5. REGIONAL EMBEDDEDNESS AND RESILIENCE: THE COVID-19 PANDEMIC

Now we turn towards an empirical discussion of the different dimensions of regional embeddedness that can contribute to an increased resilience towards exogenous shocks, such as the COVID-19 pandemic. To start with, our survey revealed that around two-thirds of the campuses were overall severely affected by the pandemic. Campus shutdowns, problems with student well-being and financial difficulties posed heavy challenges to the operation of many campuses, while fewer campuses were strongly affected by decreasing student enrolments, problems with delivering teaching, problems with staffing and complying with COVID-19 regulations. Two out of five offshore campuses believe they were more negatively hit than domestic universities. The same number of offshore campuses does not see itself equipped with major resilience to crisis. Overall, this supports the picture transnational education and international management scholars have painted of offshore campuses as high-risk business operations (Altbach, 2010).

While geographical location or institutional context did not seem to explain an institutions’ ability to cope with the impact of the pandemic, our survey data suggest a link between regional embeddedness and institutional resilience in the face of the COVID-19 pandemic:

• Our survey findings indicate that about 80% of the offshore campuses without local partnerships were assessed by their managers to be heavily affected by the pandemic. This was only the case for 50% of those who had a local partner. This further substantiates the findings from existing literature and our own qualitative research that local partners are a crucial component of successful offshore campus development.

• Funding from host governments seemed to matter for how resilient campus managers assessed their institutions to be, as four out of five campus managers that received funding believed their institutions to be highly resilient. This was only true for half of the institutions without additional government funding, showing how public funding and less reliance on volatile market conditions are important factors for sustainable higher education landscapes.

• We differentiated how strongly the campuses rely on fly-in and international faculty. This factor turned out to make a substantial difference in the campuses’ overall crisis affectedness: all campuses that relied largely on international staff were overall heavily affected, whereas this applies only to less than two fifths of the campuses with local faculty. This exemplifies that being dependant on fly-in and international staff for operating the campus and delivering the programmes is another factor that made transnational providers’ subsidiaries vulnerable to the pandemic. Vice versa, being able to draw on local labour markets may be a key asset for transnationally mobile universities when transregional interconnections, such as the mobility of people across territorial borders, are disrupted as happened with the COVID-19 pandemic.

• We differentiated between campuses with high numbers (more than 20%) and lower numbers (less than 20%) of international students. The survey results indicate that managers in campuses with a lower share of international students perceive their institutions as more resilient to the COVID-19 shocks than did respondents in campuses with a relatively large number of international students. This suggests that, with states heavily restricting cross-border mobility of people during the pandemic, the ability to recruit fee-paying students domestically became crucial for higher education institutions to mitigate the financial consequences of the crisis. Interestingly, some campuses have been able to accommodate students who otherwise would have enrolled in the country of origin of the university but, due to travel restrictions, were unable to do so. Thus, for some higher education institutions, offshore campuses presented the opportunity to continue their operations and keep international fee-paying students within their institution.

6. REGIONAL EMBEDDEDNESS – A PANACEA?

By conceptualizing the regional and transregional embeddedness of offshore campuses along four dimensions – partnerships, government funding, faculty and staff, students – our analysis illustrates the importance for offshore campuses to forge regional ties. Those prove to be particularly valuable to mitigate shocks in a context of crisis such as the COVID-19 pandemic. Having established ties with regional partners both within and outside the university, receiving funding from the host government, recruiting staff and faculty on local contracts as well as domestic students seemed to lead to a higher resilience of offshore campuses as compared to those highly reliant on transregional ties. Thus, under the circumstances of an external shock heavily disrupting the transregional connections, those offshore campuses that more strongly rely on their regional embeddedness were evaluated by their senior managers to be less negatively impacted and more resilient.

Our findings contribute to debates around the regional role of universities and their embeddedness within their host environments. Beyond understanding regional embeddedness of institutions as valuable for an institution in the long-term, we have shown how regional embeddedness can contribute to sustain campuses’ financial viability and resilience to short-term financial shocks such as pandemic-induced disruptions of campus operations. Moreover, we add to emergent debates around the future of offshore campuses following the COVID-19 pandemic.

A few policy recommendations can be developed from this analysis for existing offshore campuses. Regional stakeholders and offshore campus strategists alike most likely benefit from facilitating the regional embeddedness of offshore campuses in their host regions. This analysis’ results support a longer standing trend of collaborative partnership models recommended by transnational education policymakers (DAAD, 2014). Building meaningful partnerships with local actors is thought to reduce the danger of creating enclave-like higher education structures, sometimes critically seen as neo-colonial projects. To these arguments, our findings suggest that regionally embedded campuses are more likely to weather a crisis such as the COVID-19 pandemic and remain resilient.

It is, however, always necessary to weigh the benefits and risks of regional versus transregional embeddedness in each particular case. While deeper regional embeddedness has proven to be an advantage in this particular situation of the early phase of the COVID-19 pandemic, it is certainly not a panacea for crisis mitigation in general. The overly strong dependence on regional embeddedness may present challenges in case a more localized event challenges operations in a particular location. Offshore campuses remain a high-risk strategy of internationalization. Higher education institutions need to think strategically and carefully evaluate the manifold risks prior to setting up branch campuses (Altbach & Wit, 2020; Kleibert et al., 2021). Our small-n survey data provided first insights into offshore campuses’ vulnerability and resilience to sudden shocks. A longer term data collection across a larger number of offshore campuses could reveal to what extent offshore campuses are effectively more resilient in the long-run and how this relates to them being regionally embedded, as well as analysing differentiated regional outcomes.

ACKNOWLEDGEMENTS

We appreciate the substantial support of our student assistant, Anne-Sophie Kagel, throughout the research project. We thank Bas van Heur and Alexander Raev for testing and helping to improve our survey design, and Suntje Schmidt for her valuable comments made during the revision process.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by Regional Studies Association’s Small Grant Scheme on Pandemics, Cities, Regions & Industry.