Not Such Innocents Abroad?

Abstract

Little research in economic education has dealt with MBA programs. The authors investigated student performance in a microeconomics/managerial economics course taught in a one-year MBA program at the German International School of Management and Administration in Hanover, Germany, during the 2002–5 academic years. After controlling for other measurable characteristics, students who spoke English as their native language systematically underperformed in the course. The authors suggest this occurred because these students could have attended similar degree programs in their own countries but instead chose to study in Germany to tour Europe between and even during course modules.

Keywords:

• grades
• incentives
• MBA
• teaching economics

JEL codes:

• A20
• A23

Acknowledgments

The authors thank Jason Abrevaya, Sam Allgood, Peter Kennedy, and Andrea Ziegert for helpful suggestions on earlier versions of this article.

Notes

1. Little research on economics courses in MBA programs has been published since Gregorowicz and Hegji (1998). Agarwal and Day (1998) included two sections of an MBA microeconomics course in a study on the use of Internet assignments and found different responses to that approach for the MBA students, compared with students in two sections of undergraduate macroeconomics courses. Truscott, Rustogi, and Young (2000) described a simulation they developed in an MBA macroeconomics course. Considerably more research on MBA programs has appeared in the management education and economics of education literatures, including studies that predict which students will accept offers to and successfully graduate from MBA programs (e.g., Bisschoff 2005, Clayton and Cate 2004, Ekpenyong 2000, and Ivy and Naudé 2004), studies that estimate financial returns to completing the MBA degree at different kinds of schools (e.g., Tracy and Waldfogel 1997), studies of the effects of MBA training and the performance of mutual fund managers (Gottesman and Morey 2006), and a study that examined how the first president with an MBA used that training to achieve his policy goals (Pfiffner 2007). There are also some earlier studies on special features of MBA programs offered in different parts of the world, particularly Eastern Europe, the former Soviet Union, and China (e.g., Goodall, Warner, and Lang 2004; Bennington and Xu 2001).

2. GISMA also offers a smaller, part-time, 22-month executive MBA program. In this article, we considered only students and courses in the regular full-time GISMA program.

3. One student dropped out so early in the program, before taking any quiz or exam in the economics course, that it is debatable whether she should be counted at all.

4. The most comprehensive comparisons of the mathematics achievement and training of students from different countries, in which U.S. students have not fared well at the secondary level and above, have been based on data from the Trends in International Mathematics and Science Study, the Program for International Student Assessment, and the National Assessment of Educational Progress in mathematics (for discussions and comparisons of the results of these studies, see reports by the American Institute for Research [2005] and the National Center for Educational Statistics [2004]).

5. There was anecdotal evidence to support this idea, including two U.S. students in the 2002–3 class who traveled most weekends and repeatedly told other students in the program that “Bs are degrees!”

6. One student submitted GRE rather than GMAT scores; the GMAT requirement was waived for one student who held advanced professional degrees; and in one case, a GMAT score was mistakenly recorded on the academic records we received as an out-of-range score.

7. Chizmar and Ostrosky (1998) provided empirical evidence that using the one-minute paper increases student learning in economics classes. Light (1990, 35) identified the one-minute paper as the single innovation for improving college teaching that “swamped all others.” However, Becker and Watts (1996 and 2001), Stead (2005), and Watts and Becker (2008) have offered evidence that the one-minute paper is rarely used in economics classes.

8. There is, however, some difference in what an economics major means in different countries. For example, in Eastern and Central Europe and the former Soviet Union, what would be considered a business major in the United States is sometimes still called an economics major.