This paper constructs a theoretical model to evaluate the effects of borderless education on education resource allocation by a public university in a developing country. It is sometimes argued that, with sole emphasis and competence in global knowledge, borderless education will lead to the demise of local knowledge in the developing country. We provide several scenarios to demonstrate this concern is genuine. For example, if graduates from a satellite university established by a transnational organization have opportunities to work abroad and earn higher incomes, then an increase in the wage in the foreign country will lead to a reduction in local knowledge production.