MBA Recruiters Value Academic Research

A new study finds that despite critics' claims to the contrary, the benefits of academic research in B-schools are clear

By Peter N. Golder and Debanjan Mitra

Debanjan Mitra

Peter Golder

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Business school professors value academic research, but it's not clear that others share this sentiment. In fact, critics have gone so far as to suggest that professors have hijacked business schools for their own selfish interests. The current rhetoric in this debate is at least partially fueled by a lack of evidence.

In a new study we conducted, which was just published in the Journal of Marketing, we provide the first empirical evidence of the impact of academic research on several business school objectives. Not surprisingly, we find that research has a positive influence on academics' perceptions of a business school. But we also find that research improves recruiters' perceptions, too. Recruiters pay higher salaries to students at schools that are increasing their research output. Moreover, the positive impact of research on recruiters' perceptions has become even stronger over the past several years, while the positive impact of research on academics' own perceptions has actually diminished.

In our study, we also evaluate how long it takes for the positive impact of research to be realized. Here again, the benefits of research are accelerating. In the early 1990s it took five to six years for increases in research to improve academics' and recruiters' perceptions. Today, their perceptions change in two to three years.

Intellectual Capital

The biggest change in recruiters' perceptions of research has occurred since 2000. This year is when BusinessWeek first included its measure of intellectual capital in the business school rankings. Its inclusion reflected a realization that research matters to recruiters. Also, it's likely that its inclusion sped up the positive impact of research.

Do our results simply capture a general effect of reputation, whereby strong business schools are just getting stronger on all dimensions—research, reputation, salaries, etc.? Not really, since research matters even after we control for endowments, which are linked to overall reputations. Also, we find that research enhances recruiters' perceptions at the top 25 schools as well as the next 25 schools.

But what about the critics' arguments? The loudest criticisms have come from business school professors castigating their own colleagues for emphasizing research. Jeffrey Pfeffer of Stanford and Christina Fong of the University of Washington argue "the impact of business school research, judged by a number of different criteria, appears to be quite small." Using more incendiary language, Warren Bennis and James O'Toole of the University of Southern California claim to reveal that the "dirty little secret at most of today's leading business schools is that they chiefly serve the faculty's research interests and career goals, with too little regard for the needs of other stakeholders."

Learning to Learn

These professors all believe that business schools would improve by employing educators more experienced in business practice and less experienced in business research. Yet they provide no evidence that their prescription has led to improved recruiter perceptions or higher student salaries. We believe that research does have these positive effects mainly for one reason. The primary benefit of an education is not to instill knowledge of facts, whether these facts are on management theories or day-to-day business operations and norms. This fact-based knowledge is static knowledge, which will soon become either a commodity or obsolete. The best education inculcates dynamic knowledge whereby students learn how to learn. This type of education can never become obsolete. And experts in this process of knowledge discovery are professors skilled in research.

Our results have several important implications for business schools. First, if recruiters care about research, then students will, too. When professors don't talk about their research in class, students should ask them. Schools should also encourage professors to include more of their research in courses. Second, research and teaching are not competing investments. Investments in research promote learning as valued by recruiters and as evidenced in higher student salaries. Third, investments in research are relatively long-term investments. Even though payoffs are coming more quickly than ever, it takes time to conduct new research and to get it published. Therefore, deans should serve longer terms in order to realize the benefits of a research-oriented strategy. Even with longer terms, a portion of deans' compensation should be tied to how their schools perform three to five years after they depart. This will ensure that deans remain committed to research, and that the long-term benefits are gained by students, recruiters, and the institution.

Peter N. Golder is Associate Professor of Marketing and George and Edythe Heyman Faculty Fellow at NYU Stern School of Business. He is also the co-author of "Will and Vision: How Latecomers Grow to Dominate Markets." . Debanjan Mitra is Assistant Professor of Marketing at Warrington College of Business Administration, University of Florida.