Carmen Aina (University of Eastern Piedmont)
Luca Bonacini, Chiara Mussida and Giuseppe Pignataro
Competition can improve performance, but when quality is only imperfectly observed it may also shift provider behaviour toward outcomes that are easier to observe than to interpret. We study Italian higher education, where a centralized accreditation process authorized a rapid expansion of telematic degree programs during the 2010s. Using administrative student records for 2010--2017, we exploit regulator-authorized entry across university--field markets as a discrete increase in competitive pressure faced by incumbent universities. Exposure to telematic entry raises annual credits earned at incumbents by between 1.6 and 2.2 ECTS. Event-study estimates show no evidence of differential pre-trends and indicate that the response builds gradually after entry. In pooled estimates, the effect is stronger among small and mid-sized institutions. We interpret these patterns through a dynamic reputation model in which universities trade off the short-run value of easier progression against future reputational losses. The results suggest that competition in higher education can change measured progression through margins that need not coincide with underlying learning, implying that entry reforms and quality assurance should be treated as complements rather than substitutes.