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Are Business and Economics Alike?

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Abstract

Using administrative data on the entire Italian population of students at their first enrolment in the tertiary system during the academic years 2008–2014, we investigate the major choice process and the subsequent behaviour after the first academic year, namely university persistence, switching major or dropout, of students enrolled in two majors perceived as similar, that are Economics and Business. We investigate the two sequential stages separately for the universes of Economics and Business students. Our main findings suggest that on average, well-prepared students are more likely to switch major than dropout. Moreover, a better student intake at degree level entails a progressive reduction in dropout rates. Likewise, a peer group more homogeneous in terms of academic grades has a higher propensity to stay in the initial major, whereas a student cohort characterised by high competitiveness, proxied by the number of credits achieved, is less persistent, especially once enrolled in Economics.

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Notes

  1. We refer to dropouts as students who leave the university system without earning a degree. All in all, they denote a non-smooth university path which decreases the share of graduates available to the economic system.

  2. Figures available online at https://www.collegeatlas.org/college-dropout.html.

  3. Certainly, investigating the academic progression of students at large, looking at both dropout and stopout behaviours enrolled in all fields of study is also an interesting topic. Nevertheless, in this empirical exercise we focus only on Economics and Business degree courses to fulfil the gap in the existing literature about this issue, leaving for a future study this more comprehensive analysis.

  4. See Sect. 5 and footnote 8, where we explain our robustness check for a possible negative view.

  5. The CFU system is equivalent to the European Credit Transfer and accumulation System (ECTS).

  6. Database MOBYSU.IT [Mobilità degli Studi Universitari in Italia], research protocol MUR—Universities of Cagliari, Palermo, Siena, Torino, Sassari, Firenze and Napoli Federico II, scientific reference Prof. Massimo Attanasio (UNIPA), Data Source ANS-MUR/CINECA.

  7. We applied several thresholds of distance to distinguish between stayers and movers. Despite the cutoff point used to define the two groups, the descriptive statistics always reported that our academic outcomes are unaffected by distance. For further robustness, we also checked the distribution of the average mark obtained in the first year (i.e. whether above or below the average mark) among the two categories and still no differences emerged.

  8. For the sake of brevity, we do not include the tables for the descriptive analysis and for the test of validity of our instrument in the paper, but they are available upon request.

  9. Since we are interested in modelling academic progression after the initial choice, the sample is composed of only freshmen (i.e. first time observed in the HE system), although they can enrol at university in subsequent years than the one of high school diploma attainment (i.e. gap years).

  10. Our model is estimated using the routine cmp written in STATA by Roodman (2011).

  11. As a robustness check, we included in our specification university-specific fixed effects to account for possible heterogeneity in the way programmes are organized and taught across institutions (as well as to consider possible institutional failures to deal with students’ abilities and ambitions) according to the negative view explained in the Introduction. The results remained basically unchanged. For the sake of brevity, we do not report these findings. These are available upon request.

  12. For a detailed discussion of the instrument choice and its validity, see Sect. 4.

  13. As a robustness check, we estimated our model without the variables CFU and GPA, as they might be considered a potential source of endogeneity. The results remained the same for all variables with only few exceptions. For after one year equations, we find difference for females for switching major. Without the control variables, female in Economics do not (significantly) switch, while for Business the probability is positive. Other small changes are observed for the dummy variables of both HS and lyceum diploma share distributions. Estimates are reported in the Online Appendix (see Tables A1, A2 and A3).

  14. Rho coefficient estimates for both Economics and Business suggest that selection exists. This reassures on our model choice.

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Acknowledgements

Carmen Aina gratefully acknowledges the financial support of the Università del Piemonte Orientale (grant FAR2017). We are grateful to Irene Brunetti, Dalit Contini, Lavinia Parisi, Roberto Zotti and two anonymous referees and the Editor for valuable comments. We thank participants at AIEL and SIE conferences in 2020 for useful comments.

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Authors and Affiliations

  1. Università del Piemonte Orientale and GLO - Dipartimento di Studi per l’Economica e l’Impresa, Via Perrone 18, 28100, Novara, Italy

    Carmen Aina

  2. Università Cattolica del Sacro Cuore and GLO, Novara, Italy

    Chiara Mussida

  3. Università Degli Studi Di Siena, Siena, Italy

    Gabriele Lombardi

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  1. Carmen Aina
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  2. Chiara Mussida
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  3. Gabriele Lombardi
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Contributions

Carmen Aina: Conceptualization, Methodology, Investigation, Formal Analysis, Writing – review & editing, Funding acquisition. Chiara Mussida: Conceptualization, Methodology, Investigation, Formal Analysis, Writing – review & editing. Gabriele Lomabardi: Data cleaning and Descriptive Statistics.

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Correspondence to Carmen Aina.

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Aina, C., Mussida, C. & Lombardi, G. Are Business and Economics Alike?. Ital Econ J 9, 557–585 (2023). https://doi.org/10.1007/s40797-021-00177-w

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