Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 08832320209599077
Journal of Education for Business
ISSN: 0883-2323 (Print) 1940-3356 (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
Institutional Characteristics and Preconditions for
International Business Education–An Empirical
Investigation
Len J. Trevino & Michael Melton
To cite this article: Len J. Trevino & Michael Melton (2002) Institutional Characteristics and
Preconditions for International Business Education–An Empirical Investigation, Journal of
Education for Business, 77:4, 230-235, DOI: 10.1080/08832320209599077
To link to this article: http://dx.doi.org/10.1080/08832320209599077
Published online: 31 Mar 2010.
Submit your article to this journal
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Citing articles: 2 View citing articles
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Institutional Characteristics and
Preconditions for International
Business EducationAn Empirical Investigation
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LEN J. TREVINO
MICHAEL MELTON
The University of Southern Mississippi
Hattiesburg, Mississippi
0
ne can trace the history of international business (IB) education at
least back to 1955, when Columbia University launched the first international
business school program in the United
States. Although the importance of
international business education was
proclaimed by Columbia and others as
early as the mid-l950s, it was not until
the 1980s, with accelerated globalization of the world’s economies, that
internationalization of business school
curricula began to take on a life of its
own. Increased interest in IB education
has led to wide and varied research on
the subject (Ball & McCulloch, 1988,
1993; Kwok & Arpan, 1994; Kwok,
Arpan, & Folks, 1994; Nehrt,1987;
Thanopoulos & Vernon, 1987). Globalization of the world’s economy over the
last decade has presented schools with
unprecedented incentives for internationalizing business school curricula,
consistent with Beamish and Calof’s
(1989) conclusion that institutions
should take steps to internationalize
their business programs.
Although much has been written
about the importance of internationalizing business school cumcula, no study
has focused on institutional factors that
might explain the likelihood of a
school’s offering an international business education. To respond to globalization trends appropriately, business
230
ABSTRACT. To respond to globalization trends that call for a strategic
shift in curricula, business schools
must possess or acquire the resources
to allow for such change. In this study,
the authors investigated the institutional characteristics that might motivate a business school to decide to
increase its emphasis on international
business education. The authors found
seven independent variables that were
significant in business schools’ tendencies to offer international business
courses: age of institution, tuition, student/faculty ratio, class size, whether
the school is in a state bordering a foreign country, urban versus rural setting, and study-abroad programs.
of independent variables to the likelihood of a school’s having an IB orientation. We measured the dependent variable by the number of IB courses
offered. The independent variables
included institutional factors: whether
the institution was public or private, its
age, its size, tuition, the school’s type of
location was (urban vs. suburban), highest degree offered by the institution, its
American Assembly of Collegiate
Schools of Business (AACSB) accreditation status, the student/faculty ratio,
the percentage of faculty members holding a doctorate, the percentage of classes having less than 20 students, whether
the school offered a study-abroad program, and whether the school was located in a state that borders a foreign country. Second, we examined demographic
factors, as measured by the percentage
of international students attending the
institution, the percentage of the student
body studying business, and the percentage of out-of-state students attending the institution.
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Journal of Education for Business
schools must possess or acquire the requisite resources. But what is the nature
of these resources? Our purpose in this
study was to examine institutional characteristics that may help to explain the
drive toward an emphasis on international business education. Interestingly,
the logic that explains some of the relationships between institutional characteristics and internationalization of business school curricula parallels
theoretical motivations that explain foreign direct investment. That is, both
involve decision-making shaped by
external environments.
Theory and Hypotheses
We developed a comprehensive
model that relates the following groups
Institutional Factors
Mixon and Hsing (1994) demonstrated that, because private schools are not
subject to state rules and regulations,
they face fewer constraints, operate with
smaller class sizes, and have a higher
academic reputation than their public
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school counterparts do. They thus may
be able to respond to the call for internationalization more rapidly than public
schools can. Concomitantly, schools
offering more advanced certification,
such as master’s or doctoral degrees, are
likely to have more significant
resources, such as academic talent and
assets that facilitate such expansionary
programs as IB education. These
schools may be able to respond more
rapidly to the environmental call for
internationalization than their less
advantaged counterparts are. Therefore,
we formulated our first two hypotheses:
H1: Private schools will tend to offer
more international business courses
than public schools.
H2: Schools offering more advanced
degrees will tend to offer more international business courses than schools
offering less advanced degrees.
Many studies, including Johanson
and Vahlne (1977) and Trevino and
Daniels (1994), have shown that the
process of internationalization is one in
which firms gradually increase their
international involvement. Firms tend to
follow this pattern because testing markets and gaining limited experience
before initiating full-scale operations
overseas can minimize risk. Just as
companies with more extensive operations tend to be older than their less
experienced counterparts, a school’s age
should tend to be positively correlated
to the number of IB course offerings.
This hypothesis may hold even if the
institution pursues a risk-minimization
strategy, such as internationalizing core
functional classes before undertaking
full-scale internationalization of its curricula.
According to IB theory, firms must
logically meet some threshold size to be
able to compete at home and have sufficient resources to invest abroad as well
(Trevino & Daniels, 1994). Although
this argument applies more directly to
the case of study-abroad programs, we
applied this same line of reasoning to
schools’ propensities to internationalize
their curricula. We assumed that institutions with limited resources naturally
would satisfy the demand for core functional areas, such as marketing, finance,
and operations, before responding to
additional demands-such
as that for
curriculum internationalization-on the
institution’s resources. Assets that
increase the probability of curricular
internationalization must be in excess
capacity; thus, we expected that size
would be positively correlated to a
school’s propensity to offer international business courses.
As shown by Tuckman (1970) and
Mixon and Hsing (1 994), when students
select universities, they select an optimal bundle of investment and consumption characteristics. Factors influencing
investment characteristics of a university include quality and marketability of
degree programs and tuition. If the market for higher education is envisioned as
being imperfectly competitive, an academic institution may bundle characteristics that lead to more inelastic demand
for its services. The change agent globalization will possibly lead to a strategic
shift within academic institutions. Concomitantly, schools that respond with IB
offerings, consistent with external
demands placed on them, will be offering more differentiated and highly marketable degree programs, thus allowing
those schools to charge higher prices.
We formulated three hypotheses based
on these arguments:
likely to pursue expansionary strategies
such as internationalization of business
school curricula. The percentage of faculty members holding a doctorate is
another institutional investment characteristic or resource that might act as an
indicator of product quality. As in our
reasoning regarding resources in excess
capacity, we expected that a higher percentage of faculty members holding a
doctorate would facilitate internationalization of a school’s curricula.
Mixon and Ressler (1995) showed
that lower studendfaculty ratios led to a
greater interest in the institution among
out-of-state students. This finding
implies that smaller class sizes are
indicative of higher quality in educational institutions. Consistent with our
previous arguments relating to product
quality and expansion, we expected that
the lower the studendfaculty ratio, the
greater the likelihood of a school’s having an international business program.
One may assume that the studendfaculty ratio acts as a proxy for class size. In
fact, class size may be a function of
such factors as the number of courses
offered each term, or even the institution’s policy dictating the amount of
individual attention that a student is
allowed. Because graduate-degreegranting institutions, especially research-intensive ones, have the option
of allowing graduate students to teach,
we decided to test another investment
characteristic, class size.
We formulated four hypotheses related to school reputation and product
quality:
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H3: The older the college or university, the more international business
courses it will tend to offer.
H4: The greater the size of the college or university, the more international business courses it will tend to offer.
H5: The higher the tuition of the college or university, the more international business courses it will tend to offer.
Researchers have shown that advertising generates and maintains product
differentiation that allows firms to pursue such expansionary policies as foreign direct investment (Kim & Lyn,
1987). It has been argued that AACSB
accreditation, by maintaining product
differentiation via reputation and product quality signaling, acts much like
advertising in building a school’s reputation. We expected that schools with
higher reputations would be more likely
to possess assets that enable expansion
than schools with lower reputations
would be. We also expected that schools
with excess capacity would be more
H6: Schools that are AACSB accredited will tend to offer more international business courses.
H7: The greater a school’s percentage
of faculty members holding a PhD, the
more international business courses it
will tend to offer.
H8: The lower a school’s studendfaculty ratio, the more international business courses it will tend to offer.
H9: The smaller a school’s class size,
the more international business courses
it will tend to offer.
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Grosse and Trevino (1996) found that
companies that were geographically
closer to their target markets were more
likely to have undertaken international
MarcWApril2002
231
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expansion than were those companies
located farther away. We used a border
variable to examine this relationship.
Using a binary independent variable,
whether a school resided in a state that
borders a foreign country, we took into
account the distance of our sample’s
institutions to international market(s).
We expected that this factor would
influence a school’s number of IB
course offerings. To further develop our
hypothesis, we also considered the
organization’s general environment:
whether it was bounded by country
andor state parameters. If the institution’s state bordered with other U.S.
states, we considered its domain domestic; if the institution’s state bordered
with other countries, we considered its
domain international and expected that
its operations would be more subject to
international pressures.
Given limited resources, an institution must decide on alternate strategies
that align it with its external environment. A school located in a nonborder
state would be less likely to have an IB
orientation because of the perceived
lower need to train its students in IB
topics, which its graduates would be
less likely to need. Conversely, schools
located within states that border foreign
countries would likely offer an IB education that benefits the consumers of
education (i.e., students) and consumers
of the end product (i.e., employers). We
expected that a school’s location as
defined by an urban versus suburban
setting would exert a similar influence:
Schools in urban settings, where IB
activity is more likely to occur, were
expected to have more IB course offerings than their suburban competitors.
We formulated two hypotheses based on
these arguments:
whole. In addition, study-abroad programs are highly visible, as evidenced
by Kashlak and Jones (1996), who
found that 67% of all students in their
sample were aware of the university’s
international program offerings. In contrast, study-abroad programs could be
used as a substitute; that is, instead of
investing in IB classes, institutions
could choose to require their students to
study abroad. Thus, business schools
that have their own IB courses can be
considered more vertically integrated
than those that use study-abroad programs as a substitute for international
business curricula. Coupling these factors led us to formulate the following
hypothesis:
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expected that out-of-state students
would be more attracted to schools with
differentiated product offerings. A student thus would be more willing to
attempt to overcome the inherent disadvantages (e.g., increased tuition) of
attending a school outside of his or her
state if the out-of-state school has
advantages over that student’s in-state
schools (e.g., an international business
curricula). Thus, we expected that higher out-of-state enrollment would lead to
a greater likelihood of a school’s internationalizing its curricula.
Greater percentages of students
studying business rather than other disciplines can increase the political clout
of colleges of business. Using this political power to its advantage, colleges of
business may be able to garner more
resources from central administration.
Therefore, schools with higher percentages of students studying business may
possess more abundant resources with
which to respond to the increased call
for curricular internationalization. The
following hypotheses stemmed from
those arguments:
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H10: Schools located in a state that
borders a foreign country will tend to
offer more international business courses than schools located in a nonborder
state.
H1 1: Schools located in an urban setting will tend to offer more international business courses than schools in a
nonurban setting.
Study-abroad programs may act as a
proxy for the level of interest the institution has in international education as a
232
Journal of Education for Business
H12: Schools offering more studyabroad programs as a substitute for an
international business curricula will
tend to offer more (fewer) international
business courses than schools offering
fewer or no study-abroad programs.
Student Body/Demographics
We decided that a cultural distance
factor was related to our geographic distance factor. As U.S. institutions recruit
and enroll more international students,
American students are increasingly
exposed to diversity and differing views
of the world. We expected that institutions with higher percentages of international students would be affected by
globalization pressures much earlier
than would schools with a more isolated
student body. This factor should
increase the cultural awareness of international diversity, and we expected that
schools with higher percentages of
international students would have more
IB class offerings.
Hymer (1976) found that firms must
possess firm-specific competitive
advantages that enable them to overcome the inherent disadvantages that
they face as a result of operating in an
unfamiliar setting. In addition, Dunning
(1981) found that the host country for
foreign direct investment must possess
location-specific advantages in order to
entice foreign companies to operate in
areas where they face disadvantages
resulting from their foreign status. Following this line of reasoning, we
H13: The greater the percentage of a
school’s international students, the more
international business courses it will
tend to offer.
H14: The greater the percentage of a
school’s out-of-state students, the more
international business courses it will
tend to offer.
H15: The greater the percentage of a
school’s business students, the more
international business courses it will
tend to offer.
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Method and Data
We used the 2001 edition of the US.
News and World Report-America’s
Best Colleges‘ to gather data on institutional and demographic factors. Information not found (given) in the College
Edition was attained from College
Source Online.2 Finally, we used
McBane ’s List of AACSB-Accredited
Business Schools Online3 to gather
information pertaining to an institution’s accreditation.
We merged these data sets and deleted all institutions that had missing or
inaccurate data for any of the factors we
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considered in our hypotheses. After
these data screens, the final sample consisted of 448 randomly selected institut i o n ~ Within
.~
this sample, 258 of the
institutions were defined as universities
and 190 were defined as colleges. One
hundred and fifty-three institutions were
accredited by the AACSB, and 295 were
not.
TABLE 1. Variables for the Multivariate OLS Regression Model
Variable name
IBCLASS
PUBPRIV
DEGREE
Model to Investigate Factors
Influencing IB Education
AGE
We used a multivariate regression
model to test the hypotheses. Based on
previous studies, our model could be
expressed as:
TUITION
AACSB
IBC = f(PUB/PRIV, DEGREE, AGE, (1)
SIZE, TUITION, AACSB, %PHD,
STUDFAC, CLASS, BORDER,
SETTING, ABROAD, %INTL,
%OUTSTATE, %BUS)
STUDFAC
where IBC is the number of international business classes offered by the institution. We provide the variable definitions in Table 1. In general, the first 12
variables of equation (1) are institutional characteristics, whereas the last three
variables measure demographic (i.e.,
student body) characteristics of each
college or university in the sample.
SIZE
%PHD
CLASS
BORDER
SETTING
ABROAD
%INTL
%OUTSTATE
%BUS
Description
Number of international business courses offered by the
institution at the undergraduate level.
A binary variable equal to 1 if a public institution, 0 if
private.
A binary variable equal to 1 if graduate-degree-granting
institution, and 0 if otherwise.
Age of the school, calculated by subtracting year that the
school was founded from the year 2000.
Size of institution as defined by the number of undergraduate
students.
Average tuition for both in-state and out-of-state students.
A binary variable equal to 1 if business school is AACSB
accredited and 0 if otherwise.
Percentage of institution’s faculty in institution having a
PhD or other terminal degree.
The number of students per full-time faculty member for
each school.
Percentage of classrooms across the institution having less
than 20 students.
A binary variable equal to 1 if institution’s state borders a
foreign country, and 0 if otherwise.
A binary variable equal to 1 if the school is located in an
urban environment, and 0 if otherwise.
A binary variable equal to 1 if institution has a study-abroad
program, and 0 if otherwise.
The percentage of enrollment represented by foreign
nationals.
The percentage of enrollment represented by out-of-state
students, for each school.
The percentage of total enrollment represented by students
majoring in business.
Results
In Table 2, we provide our results for
estimating Equation 1 through ordinary
least squares (OLS) regression.
Although the model has a .47 adjusted
R-square, our focus in this study was the
signs and significance of the relationships between the endogenous and
exogenous variables. The positive and
significant AGE variable confirmed our
expectations that the older the college or
university was, the more IB course
offerings it would have. The positive
and significant variable TUITION substantiated Hypothesis 5 , indicating that
those institutions having higher tuition
would be more apt to have a larger number of IB courses. Hypotheses 8 and 9
were confirmed, with the negative and
significant variable STUDFAC and the
positive and significant variable
CLASS. Those institutions having
smaller studendfaculty ratios and smaller classes may be signaling higher qual-
TABLE 2. MultivariateOrdinary Least Squares (OLS) Regression Model
Testing for Factors Influencing IB Course Offerings
Variable
INTERCEP
PUBPRIV
DEGREE
AGE
SIZE
TUITION
AACSB
%PHD
STUDBAC
CLASS
BORDER
SETTING
ABROAD
%INTL
%OUTSTATE
%BUS
# of observations
Adjusted R-square
F-statistic
Parameter estimate
p value
-5.8067
-0.2539
-0.0776
1.9438***
-0.2042
0.000048*
0.3577
-0.144344
-0.0944***
0.043 1***
0.0039***
0.0132***
-0.9012**
0.0094
-0.005 1
-0.0144
448
.4747
27.926
0.3 189
0.4254
0.767
0.0001
0.5576
0.0885
0.1637
0.6382
0.0001
0.0001
0.0001
0.0001
0.0192
0.1312
0.7874
0.1461
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*Significant at the 10%level. ** Significant at the 5% level. ***Significant at the I % level.
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ity through those factors. Consistent
with our arguments relating to product
quality and expansion, these variables
appeared to influence the number of IB
courses offered. The positive and significant variable BORDER verified our
expectation that institutions located in
states bordering foreign countries
would tend to offer more IB courses.
With respect to location within the state,
the positive and significant variable
SETTING validated the hypothesis that
institutions located in an urban setting
would tend to offer a larger number of
IB courses. The negative and significant
coefficient for the last institutional variable, ABROAD, helped to confirm
Hypothesis 12, indicating that schools
may be using study-abroad programs as
a substitute for international business
courses.
Though insignificant, the negative
coefficient for the PUBPRIV variable
was consistent with Hypothesis 1, indicating that private institutions would be
more likely to have a greater number of
IB course offerings. Inconsistent with
our earlier hypothesis, our results suggest that advanced-degree-granting
institutions may be less likely to internationalize their business schools.
Although insignificant, this consequence may be related to the fewer
number of private schools offering such
advanced degrees. However, this finding warrants further investigation.
Whereas one would assume that size
does matter, the insignificant and negative coefficient for the SIZE variable
indicated otherwise. We also obtained
an interesting result for the accreditation
variable (ACCRED). Though the positive sign met our expectations, the
insignificance of the variable indicates
that accreditation was not a major factor
influencing the number of IB courses
offered. In addition, the percentage of
faculty members holding a PhD did not
influence the likelihood of a school’s
internationalization of business school
curricula.
None of the demographic specific
variables were significant at any level.
Though the %INTL variable carried the
correct sign, the percentage of international students at the institution did not
influence the number of IB courses
offered. In addition, the negative and
insignificant variables %OUTSTATE
and %BUS did not confirm our earlier
hypotheses regarding out-of-state students and business students. The
insignificance of these results suggests
that institutional, rather than students,
characteristics play a greater role in
influencing the internationalization of
business school curricula.
these same lines, we found that the likelihood of more IB course offerings was
greater for (a) schools located in a state
that borders a foreign country and (b)
schools located in an urban setting.
These findings demonstrate that business schools that are closer to international markets are more influenced by
the impetus to internationalize their
operations. Furthermore, institutions
offering study-abroad programs may be
foregoing IB courses and allocating
resources elsewhere. This substitution
could indicate a cost-reduction effort by
the school.
In future studies, researchers could
examine whether the substitute for TB
classes (study-abroad programs) is as
academically enriching for students as
IB courses. Other areas for future
research include the possibility of a
time-series study as well as a more personalized survey of students, faculty,
and administrators. In addition, a more
international sample that includes European, Asian, and Latin American institutions would help to generalize our
findings.
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234
Conclusions
To our knowledge, this is the first
study focusing on institutional characteristics that help to explain the likelihood of a school’s internationalizing its
business school curricula. Our findings
demonstrate that many variables are significant in helping to explain the variance in the number of IB course offerings among a sample of 448 academic
institutions. A greater number of IB
course offerings apparently signals to
consumers that the school has responded
to globalization trends and is attempting
to prepare its students to compete in the
international economy. A dearth of IB
course offerings, conversely, tells
prospective students that the institution
has not adapted to globalization.
Many of our hypotheses were supported by the empirical results of this
study. First, the older schools were more
likely to have internationalized their
business school curricula. This is consistent with multinational enterprise
theory that states that older multinational enterprises are more likely to respond
to globalization than are younger multinational enterprises. In addition, the
schools with higher tuition were more
likely to have internationalized their
business school curricula. Thus, schools
that differentiate via IB education may
face less elastic demand curves,
enabling them to charge higher prices.
The institutions with a lower studendfaculty ratio and/or a smaller class
size tended to offer more IB courses.
This may indicate that IB education is
more of a specialty topic and thus more
readily taught in smaller settings. In
addition, our study results are in line
with multinational enterprise research
showing that firms residing in close
physical and/or cultural proximity to
international markets are more likely to
internationalize their operations. Along
ACKNOWLEDGMENT
The authors gratefully acknowledge an anonymous referee, Frank Mixon, Charles Sawyer, and
Rohan Christie-David for comments on earlier
drafts of this article, as well as Paula Boone, Jessica Gordon, Taisa Minto, and John Rankin for
capable research assistance.
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NOTES
1. The 2001 U.S. News and World Report college rankings could also be found on the Internet
at
ISSN: 0883-2323 (Print) 1940-3356 (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
Institutional Characteristics and Preconditions for
International Business Education–An Empirical
Investigation
Len J. Trevino & Michael Melton
To cite this article: Len J. Trevino & Michael Melton (2002) Institutional Characteristics and
Preconditions for International Business Education–An Empirical Investigation, Journal of
Education for Business, 77:4, 230-235, DOI: 10.1080/08832320209599077
To link to this article: http://dx.doi.org/10.1080/08832320209599077
Published online: 31 Mar 2010.
Submit your article to this journal
Article views: 10
View related articles
Citing articles: 2 View citing articles
Full Terms & Conditions of access and use can be found at
http://www.tandfonline.com/action/journalInformation?journalCode=vjeb20
Download by: [Universitas Maritim Raja Ali Haji]
Date: 13 January 2016, At: 00:24
Downloaded by [Universitas Maritim Raja Ali Haji] at 00:24 13 January 2016
Institutional Characteristics and
Preconditions for International
Business EducationAn Empirical Investigation
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LEN J. TREVINO
MICHAEL MELTON
The University of Southern Mississippi
Hattiesburg, Mississippi
0
ne can trace the history of international business (IB) education at
least back to 1955, when Columbia University launched the first international
business school program in the United
States. Although the importance of
international business education was
proclaimed by Columbia and others as
early as the mid-l950s, it was not until
the 1980s, with accelerated globalization of the world’s economies, that
internationalization of business school
curricula began to take on a life of its
own. Increased interest in IB education
has led to wide and varied research on
the subject (Ball & McCulloch, 1988,
1993; Kwok & Arpan, 1994; Kwok,
Arpan, & Folks, 1994; Nehrt,1987;
Thanopoulos & Vernon, 1987). Globalization of the world’s economy over the
last decade has presented schools with
unprecedented incentives for internationalizing business school curricula,
consistent with Beamish and Calof’s
(1989) conclusion that institutions
should take steps to internationalize
their business programs.
Although much has been written
about the importance of internationalizing business school cumcula, no study
has focused on institutional factors that
might explain the likelihood of a
school’s offering an international business education. To respond to globalization trends appropriately, business
230
ABSTRACT. To respond to globalization trends that call for a strategic
shift in curricula, business schools
must possess or acquire the resources
to allow for such change. In this study,
the authors investigated the institutional characteristics that might motivate a business school to decide to
increase its emphasis on international
business education. The authors found
seven independent variables that were
significant in business schools’ tendencies to offer international business
courses: age of institution, tuition, student/faculty ratio, class size, whether
the school is in a state bordering a foreign country, urban versus rural setting, and study-abroad programs.
of independent variables to the likelihood of a school’s having an IB orientation. We measured the dependent variable by the number of IB courses
offered. The independent variables
included institutional factors: whether
the institution was public or private, its
age, its size, tuition, the school’s type of
location was (urban vs. suburban), highest degree offered by the institution, its
American Assembly of Collegiate
Schools of Business (AACSB) accreditation status, the student/faculty ratio,
the percentage of faculty members holding a doctorate, the percentage of classes having less than 20 students, whether
the school offered a study-abroad program, and whether the school was located in a state that borders a foreign country. Second, we examined demographic
factors, as measured by the percentage
of international students attending the
institution, the percentage of the student
body studying business, and the percentage of out-of-state students attending the institution.
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Journal of Education for Business
schools must possess or acquire the requisite resources. But what is the nature
of these resources? Our purpose in this
study was to examine institutional characteristics that may help to explain the
drive toward an emphasis on international business education. Interestingly,
the logic that explains some of the relationships between institutional characteristics and internationalization of business school curricula parallels
theoretical motivations that explain foreign direct investment. That is, both
involve decision-making shaped by
external environments.
Theory and Hypotheses
We developed a comprehensive
model that relates the following groups
Institutional Factors
Mixon and Hsing (1994) demonstrated that, because private schools are not
subject to state rules and regulations,
they face fewer constraints, operate with
smaller class sizes, and have a higher
academic reputation than their public
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school counterparts do. They thus may
be able to respond to the call for internationalization more rapidly than public
schools can. Concomitantly, schools
offering more advanced certification,
such as master’s or doctoral degrees, are
likely to have more significant
resources, such as academic talent and
assets that facilitate such expansionary
programs as IB education. These
schools may be able to respond more
rapidly to the environmental call for
internationalization than their less
advantaged counterparts are. Therefore,
we formulated our first two hypotheses:
H1: Private schools will tend to offer
more international business courses
than public schools.
H2: Schools offering more advanced
degrees will tend to offer more international business courses than schools
offering less advanced degrees.
Many studies, including Johanson
and Vahlne (1977) and Trevino and
Daniels (1994), have shown that the
process of internationalization is one in
which firms gradually increase their
international involvement. Firms tend to
follow this pattern because testing markets and gaining limited experience
before initiating full-scale operations
overseas can minimize risk. Just as
companies with more extensive operations tend to be older than their less
experienced counterparts, a school’s age
should tend to be positively correlated
to the number of IB course offerings.
This hypothesis may hold even if the
institution pursues a risk-minimization
strategy, such as internationalizing core
functional classes before undertaking
full-scale internationalization of its curricula.
According to IB theory, firms must
logically meet some threshold size to be
able to compete at home and have sufficient resources to invest abroad as well
(Trevino & Daniels, 1994). Although
this argument applies more directly to
the case of study-abroad programs, we
applied this same line of reasoning to
schools’ propensities to internationalize
their curricula. We assumed that institutions with limited resources naturally
would satisfy the demand for core functional areas, such as marketing, finance,
and operations, before responding to
additional demands-such
as that for
curriculum internationalization-on the
institution’s resources. Assets that
increase the probability of curricular
internationalization must be in excess
capacity; thus, we expected that size
would be positively correlated to a
school’s propensity to offer international business courses.
As shown by Tuckman (1970) and
Mixon and Hsing (1 994), when students
select universities, they select an optimal bundle of investment and consumption characteristics. Factors influencing
investment characteristics of a university include quality and marketability of
degree programs and tuition. If the market for higher education is envisioned as
being imperfectly competitive, an academic institution may bundle characteristics that lead to more inelastic demand
for its services. The change agent globalization will possibly lead to a strategic
shift within academic institutions. Concomitantly, schools that respond with IB
offerings, consistent with external
demands placed on them, will be offering more differentiated and highly marketable degree programs, thus allowing
those schools to charge higher prices.
We formulated three hypotheses based
on these arguments:
likely to pursue expansionary strategies
such as internationalization of business
school curricula. The percentage of faculty members holding a doctorate is
another institutional investment characteristic or resource that might act as an
indicator of product quality. As in our
reasoning regarding resources in excess
capacity, we expected that a higher percentage of faculty members holding a
doctorate would facilitate internationalization of a school’s curricula.
Mixon and Ressler (1995) showed
that lower studendfaculty ratios led to a
greater interest in the institution among
out-of-state students. This finding
implies that smaller class sizes are
indicative of higher quality in educational institutions. Consistent with our
previous arguments relating to product
quality and expansion, we expected that
the lower the studendfaculty ratio, the
greater the likelihood of a school’s having an international business program.
One may assume that the studendfaculty ratio acts as a proxy for class size. In
fact, class size may be a function of
such factors as the number of courses
offered each term, or even the institution’s policy dictating the amount of
individual attention that a student is
allowed. Because graduate-degreegranting institutions, especially research-intensive ones, have the option
of allowing graduate students to teach,
we decided to test another investment
characteristic, class size.
We formulated four hypotheses related to school reputation and product
quality:
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H3: The older the college or university, the more international business
courses it will tend to offer.
H4: The greater the size of the college or university, the more international business courses it will tend to offer.
H5: The higher the tuition of the college or university, the more international business courses it will tend to offer.
Researchers have shown that advertising generates and maintains product
differentiation that allows firms to pursue such expansionary policies as foreign direct investment (Kim & Lyn,
1987). It has been argued that AACSB
accreditation, by maintaining product
differentiation via reputation and product quality signaling, acts much like
advertising in building a school’s reputation. We expected that schools with
higher reputations would be more likely
to possess assets that enable expansion
than schools with lower reputations
would be. We also expected that schools
with excess capacity would be more
H6: Schools that are AACSB accredited will tend to offer more international business courses.
H7: The greater a school’s percentage
of faculty members holding a PhD, the
more international business courses it
will tend to offer.
H8: The lower a school’s studendfaculty ratio, the more international business courses it will tend to offer.
H9: The smaller a school’s class size,
the more international business courses
it will tend to offer.
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Grosse and Trevino (1996) found that
companies that were geographically
closer to their target markets were more
likely to have undertaken international
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expansion than were those companies
located farther away. We used a border
variable to examine this relationship.
Using a binary independent variable,
whether a school resided in a state that
borders a foreign country, we took into
account the distance of our sample’s
institutions to international market(s).
We expected that this factor would
influence a school’s number of IB
course offerings. To further develop our
hypothesis, we also considered the
organization’s general environment:
whether it was bounded by country
andor state parameters. If the institution’s state bordered with other U.S.
states, we considered its domain domestic; if the institution’s state bordered
with other countries, we considered its
domain international and expected that
its operations would be more subject to
international pressures.
Given limited resources, an institution must decide on alternate strategies
that align it with its external environment. A school located in a nonborder
state would be less likely to have an IB
orientation because of the perceived
lower need to train its students in IB
topics, which its graduates would be
less likely to need. Conversely, schools
located within states that border foreign
countries would likely offer an IB education that benefits the consumers of
education (i.e., students) and consumers
of the end product (i.e., employers). We
expected that a school’s location as
defined by an urban versus suburban
setting would exert a similar influence:
Schools in urban settings, where IB
activity is more likely to occur, were
expected to have more IB course offerings than their suburban competitors.
We formulated two hypotheses based on
these arguments:
whole. In addition, study-abroad programs are highly visible, as evidenced
by Kashlak and Jones (1996), who
found that 67% of all students in their
sample were aware of the university’s
international program offerings. In contrast, study-abroad programs could be
used as a substitute; that is, instead of
investing in IB classes, institutions
could choose to require their students to
study abroad. Thus, business schools
that have their own IB courses can be
considered more vertically integrated
than those that use study-abroad programs as a substitute for international
business curricula. Coupling these factors led us to formulate the following
hypothesis:
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expected that out-of-state students
would be more attracted to schools with
differentiated product offerings. A student thus would be more willing to
attempt to overcome the inherent disadvantages (e.g., increased tuition) of
attending a school outside of his or her
state if the out-of-state school has
advantages over that student’s in-state
schools (e.g., an international business
curricula). Thus, we expected that higher out-of-state enrollment would lead to
a greater likelihood of a school’s internationalizing its curricula.
Greater percentages of students
studying business rather than other disciplines can increase the political clout
of colleges of business. Using this political power to its advantage, colleges of
business may be able to garner more
resources from central administration.
Therefore, schools with higher percentages of students studying business may
possess more abundant resources with
which to respond to the increased call
for curricular internationalization. The
following hypotheses stemmed from
those arguments:
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H10: Schools located in a state that
borders a foreign country will tend to
offer more international business courses than schools located in a nonborder
state.
H1 1: Schools located in an urban setting will tend to offer more international business courses than schools in a
nonurban setting.
Study-abroad programs may act as a
proxy for the level of interest the institution has in international education as a
232
Journal of Education for Business
H12: Schools offering more studyabroad programs as a substitute for an
international business curricula will
tend to offer more (fewer) international
business courses than schools offering
fewer or no study-abroad programs.
Student Body/Demographics
We decided that a cultural distance
factor was related to our geographic distance factor. As U.S. institutions recruit
and enroll more international students,
American students are increasingly
exposed to diversity and differing views
of the world. We expected that institutions with higher percentages of international students would be affected by
globalization pressures much earlier
than would schools with a more isolated
student body. This factor should
increase the cultural awareness of international diversity, and we expected that
schools with higher percentages of
international students would have more
IB class offerings.
Hymer (1976) found that firms must
possess firm-specific competitive
advantages that enable them to overcome the inherent disadvantages that
they face as a result of operating in an
unfamiliar setting. In addition, Dunning
(1981) found that the host country for
foreign direct investment must possess
location-specific advantages in order to
entice foreign companies to operate in
areas where they face disadvantages
resulting from their foreign status. Following this line of reasoning, we
H13: The greater the percentage of a
school’s international students, the more
international business courses it will
tend to offer.
H14: The greater the percentage of a
school’s out-of-state students, the more
international business courses it will
tend to offer.
H15: The greater the percentage of a
school’s business students, the more
international business courses it will
tend to offer.
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Method and Data
We used the 2001 edition of the US.
News and World Report-America’s
Best Colleges‘ to gather data on institutional and demographic factors. Information not found (given) in the College
Edition was attained from College
Source Online.2 Finally, we used
McBane ’s List of AACSB-Accredited
Business Schools Online3 to gather
information pertaining to an institution’s accreditation.
We merged these data sets and deleted all institutions that had missing or
inaccurate data for any of the factors we
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considered in our hypotheses. After
these data screens, the final sample consisted of 448 randomly selected institut i o n ~ Within
.~
this sample, 258 of the
institutions were defined as universities
and 190 were defined as colleges. One
hundred and fifty-three institutions were
accredited by the AACSB, and 295 were
not.
TABLE 1. Variables for the Multivariate OLS Regression Model
Variable name
IBCLASS
PUBPRIV
DEGREE
Model to Investigate Factors
Influencing IB Education
AGE
We used a multivariate regression
model to test the hypotheses. Based on
previous studies, our model could be
expressed as:
TUITION
AACSB
IBC = f(PUB/PRIV, DEGREE, AGE, (1)
SIZE, TUITION, AACSB, %PHD,
STUDFAC, CLASS, BORDER,
SETTING, ABROAD, %INTL,
%OUTSTATE, %BUS)
STUDFAC
where IBC is the number of international business classes offered by the institution. We provide the variable definitions in Table 1. In general, the first 12
variables of equation (1) are institutional characteristics, whereas the last three
variables measure demographic (i.e.,
student body) characteristics of each
college or university in the sample.
SIZE
%PHD
CLASS
BORDER
SETTING
ABROAD
%INTL
%OUTSTATE
%BUS
Description
Number of international business courses offered by the
institution at the undergraduate level.
A binary variable equal to 1 if a public institution, 0 if
private.
A binary variable equal to 1 if graduate-degree-granting
institution, and 0 if otherwise.
Age of the school, calculated by subtracting year that the
school was founded from the year 2000.
Size of institution as defined by the number of undergraduate
students.
Average tuition for both in-state and out-of-state students.
A binary variable equal to 1 if business school is AACSB
accredited and 0 if otherwise.
Percentage of institution’s faculty in institution having a
PhD or other terminal degree.
The number of students per full-time faculty member for
each school.
Percentage of classrooms across the institution having less
than 20 students.
A binary variable equal to 1 if institution’s state borders a
foreign country, and 0 if otherwise.
A binary variable equal to 1 if the school is located in an
urban environment, and 0 if otherwise.
A binary variable equal to 1 if institution has a study-abroad
program, and 0 if otherwise.
The percentage of enrollment represented by foreign
nationals.
The percentage of enrollment represented by out-of-state
students, for each school.
The percentage of total enrollment represented by students
majoring in business.
Results
In Table 2, we provide our results for
estimating Equation 1 through ordinary
least squares (OLS) regression.
Although the model has a .47 adjusted
R-square, our focus in this study was the
signs and significance of the relationships between the endogenous and
exogenous variables. The positive and
significant AGE variable confirmed our
expectations that the older the college or
university was, the more IB course
offerings it would have. The positive
and significant variable TUITION substantiated Hypothesis 5 , indicating that
those institutions having higher tuition
would be more apt to have a larger number of IB courses. Hypotheses 8 and 9
were confirmed, with the negative and
significant variable STUDFAC and the
positive and significant variable
CLASS. Those institutions having
smaller studendfaculty ratios and smaller classes may be signaling higher qual-
TABLE 2. MultivariateOrdinary Least Squares (OLS) Regression Model
Testing for Factors Influencing IB Course Offerings
Variable
INTERCEP
PUBPRIV
DEGREE
AGE
SIZE
TUITION
AACSB
%PHD
STUDBAC
CLASS
BORDER
SETTING
ABROAD
%INTL
%OUTSTATE
%BUS
# of observations
Adjusted R-square
F-statistic
Parameter estimate
p value
-5.8067
-0.2539
-0.0776
1.9438***
-0.2042
0.000048*
0.3577
-0.144344
-0.0944***
0.043 1***
0.0039***
0.0132***
-0.9012**
0.0094
-0.005 1
-0.0144
448
.4747
27.926
0.3 189
0.4254
0.767
0.0001
0.5576
0.0885
0.1637
0.6382
0.0001
0.0001
0.0001
0.0001
0.0192
0.1312
0.7874
0.1461
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*Significant at the 10%level. ** Significant at the 5% level. ***Significant at the I % level.
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ity through those factors. Consistent
with our arguments relating to product
quality and expansion, these variables
appeared to influence the number of IB
courses offered. The positive and significant variable BORDER verified our
expectation that institutions located in
states bordering foreign countries
would tend to offer more IB courses.
With respect to location within the state,
the positive and significant variable
SETTING validated the hypothesis that
institutions located in an urban setting
would tend to offer a larger number of
IB courses. The negative and significant
coefficient for the last institutional variable, ABROAD, helped to confirm
Hypothesis 12, indicating that schools
may be using study-abroad programs as
a substitute for international business
courses.
Though insignificant, the negative
coefficient for the PUBPRIV variable
was consistent with Hypothesis 1, indicating that private institutions would be
more likely to have a greater number of
IB course offerings. Inconsistent with
our earlier hypothesis, our results suggest that advanced-degree-granting
institutions may be less likely to internationalize their business schools.
Although insignificant, this consequence may be related to the fewer
number of private schools offering such
advanced degrees. However, this finding warrants further investigation.
Whereas one would assume that size
does matter, the insignificant and negative coefficient for the SIZE variable
indicated otherwise. We also obtained
an interesting result for the accreditation
variable (ACCRED). Though the positive sign met our expectations, the
insignificance of the variable indicates
that accreditation was not a major factor
influencing the number of IB courses
offered. In addition, the percentage of
faculty members holding a PhD did not
influence the likelihood of a school’s
internationalization of business school
curricula.
None of the demographic specific
variables were significant at any level.
Though the %INTL variable carried the
correct sign, the percentage of international students at the institution did not
influence the number of IB courses
offered. In addition, the negative and
insignificant variables %OUTSTATE
and %BUS did not confirm our earlier
hypotheses regarding out-of-state students and business students. The
insignificance of these results suggests
that institutional, rather than students,
characteristics play a greater role in
influencing the internationalization of
business school curricula.
these same lines, we found that the likelihood of more IB course offerings was
greater for (a) schools located in a state
that borders a foreign country and (b)
schools located in an urban setting.
These findings demonstrate that business schools that are closer to international markets are more influenced by
the impetus to internationalize their
operations. Furthermore, institutions
offering study-abroad programs may be
foregoing IB courses and allocating
resources elsewhere. This substitution
could indicate a cost-reduction effort by
the school.
In future studies, researchers could
examine whether the substitute for TB
classes (study-abroad programs) is as
academically enriching for students as
IB courses. Other areas for future
research include the possibility of a
time-series study as well as a more personalized survey of students, faculty,
and administrators. In addition, a more
international sample that includes European, Asian, and Latin American institutions would help to generalize our
findings.
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Conclusions
To our knowledge, this is the first
study focusing on institutional characteristics that help to explain the likelihood of a school’s internationalizing its
business school curricula. Our findings
demonstrate that many variables are significant in helping to explain the variance in the number of IB course offerings among a sample of 448 academic
institutions. A greater number of IB
course offerings apparently signals to
consumers that the school has responded
to globalization trends and is attempting
to prepare its students to compete in the
international economy. A dearth of IB
course offerings, conversely, tells
prospective students that the institution
has not adapted to globalization.
Many of our hypotheses were supported by the empirical results of this
study. First, the older schools were more
likely to have internationalized their
business school curricula. This is consistent with multinational enterprise
theory that states that older multinational enterprises are more likely to respond
to globalization than are younger multinational enterprises. In addition, the
schools with higher tuition were more
likely to have internationalized their
business school curricula. Thus, schools
that differentiate via IB education may
face less elastic demand curves,
enabling them to charge higher prices.
The institutions with a lower studendfaculty ratio and/or a smaller class
size tended to offer more IB courses.
This may indicate that IB education is
more of a specialty topic and thus more
readily taught in smaller settings. In
addition, our study results are in line
with multinational enterprise research
showing that firms residing in close
physical and/or cultural proximity to
international markets are more likely to
internationalize their operations. Along
ACKNOWLEDGMENT
The authors gratefully acknowledge an anonymous referee, Frank Mixon, Charles Sawyer, and
Rohan Christie-David for comments on earlier
drafts of this article, as well as Paula Boone, Jessica Gordon, Taisa Minto, and John Rankin for
capable research assistance.
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NOTES
1. The 2001 U.S. News and World Report college rankings could also be found on the Internet
at