Is is really necessary?

[applicant12]

Hi folks,

I am a double Bus. (Finance in particular) and Econ major. My goal is to pursue a PhD in econ but I've been looking at some PhD in bus programs lately. I have a few questions that I would really appreciate it if you can answer me (I know you guys will)

1. Do you need (and need a lot) of math? Like in Econ, I know that you need at least 3 Cal classes, Linear Alg, Diff equations, Real analysis (and more). Do you need those math classes to apply for a PhD in bus? If not, what level of math do you need? At my school, to get a BS in Bus Admin, you just College alg and basic Cal which are so easy

In addition, is there any certain courses that you need to take or you need to take just enough for a major? (is there any course in the econ dept or any other dept that is required?)

2. Why don't most Bus schools accept GRE instead of the GMAT?

3. Correct me if I'm wrong but I think I've seen PhDs in econ teach courses in Bus school but I don't think I've seen people with PhD in finance or any other aspect of business teach in an Econ Dept. Is it because of the nature of the science or what?

Thanks a bunch!!!!!!!

[NewBoston]

Originally Posted by applicant12

1. Do you need (and need a lot) of math? Like in Econ, I know that you need at least 3 Cal classes, Linear Alg, Diff equations, Real analysis (and more). Do you need those math classes to apply for a PhD in bus?

For a Finance PhD, yes. Papers like Black and Scholes (1973) and Merton (1974) are standard reading early in the program and it only gets harder from there. More recent work gets much, much more involved. In short, more math is better for Finance. Also note that a PhD in Finance is not like the BS in terms of presentation. The core concepts are the same, but you will be dealing with them in a radically different way (with lots and lots of math.)

Originally Posted by applicant12

In addition, is there any certain courses that you need to take or you need to take just enough for a major? (is there any course in the econ dept or any other dept that is required?)

Intermediate Micro/Macro + the math you mentioned is normally considered the minimum for a good program. Econometrics courses are helpful as are high level stat classes on probability theory and data analysis. Any good overview of the concepts is useful, but not required. The more specific your research interests, the easier it would be to identify classes which would provide the maximum benefit.

Originally Posted by applicant12

2. Why don't most Bus schools accept GRE instead of the GMAT?

They often do! Take both unless you know for sure the programs you are applying to will only use the GMAT. Stanford GSB only takes the GRE for Finance PhD applicants.

Originally Posted by applicant12

3. Correct me if I'm wrong but I think I've seen PhDs in econ teach courses in Bus school but I don't think I've seen people with PhD in finance or any other aspect of business teach in an Econ Dept. Is it because of the nature of the science or what?

Once upon a time, not long ago, there were few if any Finance PhD programs. That has now changed. The rise of the Finance PhD has led to the reduction if not outright elimination at most schools of hiring an Econ PhD to teach in the Business School. One reason is the Finance PhDs will learn (and master) a huge range of Finance topics from Corp. Finance to Asset Pricing while Econ PhDs often do some more narrow subset of the Finance literature in addition to, say, macro and/or metrics. It still happens, but nowhere near as frequently and often only due to taking someone from a much higher ranked program. For example, a Harvard Econ PhD may end up teaching Finance at a top 25-50 business school. But it is much more rare for a non-top 10ish Econ PhD to have the same opportunity coming from an Econ PhD.

[applicant12]

thanks a bunch!!!!

1. So now you need roughly the same level of math to apply to an Econ program and a Finance program (and almost the same level of econ, too). Does the same thing apply to other areas of study like marketing or mgmt or whatnot?

And one thing that confuses me is that I've seen many econ Dept explicitly state that applicants need this level of math and that level of econ, I can hardly find such requirements for a PhD in Bus (even in Finance). Any explanation?

2. Yea you're right. I realized that most PhD Bus accept GRE. So the question now is why don't PhD econ depts accept GMAT? :P

3. Thanks. i got it now

4. Is there a ranking of PhD program in Business? I know that econphd.net introduces 2 ranking by UT Dallas and Arizona State but I'm wondering if there is any other ranking out there based on areas of study?

Thanks!

[sombaner]

Just to add to applicant12's first question, What is the course work in Eco, Psycho, Math/Stat that is expected from a mktg quant modeller and a CB applicant respectively? Though I have seen numerous discussion in this forum on prior course work for finance programs, I could not find much about mktg programs.

[NewBoston]

There were a few long and productive quant marketing threads a while back. I think you will find a good discussion in there for requirements and what background got who placed where.

[moomber123]

I think my posts elsewhere in this forum might address some of your core questions. But let me just briefly go over the difference between business PhD and econ PhD:

1.) Business academic community is not nearly as coherent a community as econ. In fact, many business professors in the same school do not attend the same conferences, or work together etc. Think of business school more like a microcosm of a university, with people coming from econ, sociology, psychology (three main "parent disciplines") and also from law, political science, etc. Just flip through a typical business academic journal (AMJ, AMR, ASQ, Org Sci) vs. econ academic journal (AER, RAND, econometrica, etc), you will see how econ people have a strong adherence to a partciular "paradigm" whereas business people don't. There is no right or wrong way to conduct academic research in this regard, just what is more appropriate.

Consequently, you will see econ people explicitly demand a lot of math, since that's their paradigm, while business people do not necessarily have a set level to impose on their students. But beware of department specific requirement though. Some business departments have very coherent professors and tend to be very "econ" like (e.g., Chicago, Stanford Business School, etc) So it is not true that going down the management path, you can avoid all the math.

2.) I am reluctant to lump business/management and finance together. Yes, it is true that finance is part of the business academic community, and is worthy of immense respect, but finance is much closer to the econ approach than the business/management approach. There is clearly agreement on the dominant paradigm: rigorous mathematical model, assumption of market efficiency (many management people do not subscribe to the notion that our market is efficient. Many even argue that our market is FAR from being efficient.) So in a sense, there is less room for disagreements in finance and econ department, compared to business/management department. Don't read it negatively. What is traded off for less room for disagreement is higher degree of rigor. It is a trade-off between realism and academic rigor, and is mostly an issue of taste. I am from strategic management, so clearly I don't quite care for the type of pure science like rigor found in econ department. But it also means that people can poke more hole in my assertions.

3.) As far as econ vs. finance is concerned. Since I am not in finance, I can't claim expertise in it. But given my undergraduate in econ from a top 5 US econ department, I can observe that econ departments in US now are moving closer and closer to pure science. A few econ professors in my old department outright renounce capitalism and conduct their economic research much like a pure mathematical discipline. I am not saying that's not worthy, but can you imagine their students going into business school and teaching future MBA? Hardly. Now that is one extreme. Some economics professors are famously "grounded in reality." Think Paul Krugman, with his column in NYTimes. But there is typically a much more abstract, theoretical orientation in modern econ departments.

4.) No ranking in business PhD program will ever satisfy your need. Do you care about prestige? Then only MBA ranking matters. Do you care about your faculty's research output? Then go to UT Dallas' top 100 website and select the journals YOU consider top and do a ranking there, but know that research output does not translate into pedigree necessarily. For example, Illinois is consistently ranked in top 10, if not top 5, in strategy research output. I have yet to see one person in this forum suggesting Illinois is a top strategy department. Their placement records also reflects that. While their professors are super productive, scoring tons of A journals every year, their students don't place quite well. The reasons for this discrepancy are quite complex, and I am not going into it here. You just need to know that no ranking in business PhD can ever be a good guide. Also know that business PhD is highly fragmented. Illinois has a great strategy and OB programs, so if you select only strategy and OB journals, it will be on the very top. Their IS program stinks, and is ranked beyond 100th place so can't be shown on the UT Dallas ranking. Now try to do an average for that. See my point here?

What matters more is the particular discipline you want to pursue, not the overall ranking. And in many cases, what matters the most is WHOM you work with, not which department you work in.