Competition and diversification in public and private higher education.

Abstract

The development of mass higher education and growing competition between higher education institutions has given increasing visibility to the issue of diversification. This paper analyses the issue of program diversification using a panel of 181 Portuguese higher education institutions over the period 1995-2007 by comparing the behavior of public and private institutions. The institutional diversity found within the Portuguese higher education system and its evolution over the recent decades provides a suitable and interesting case to perform this analysis. The results show that the legal status of institutions is a major factor regarding diversification, as private institutions are far more specialized than their public counterparts. The study also evaluates which the role of other institutional variables such assize, age, location, category, and research intensity to explain differences in the diversification behavior of higher education institutions. The results provide important insights, as competition has been thought to improve the performance of higher education institutions.