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Determinants of study abroad decisions among Indian students: A PLS

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Article  in  International Journal of Management in Education · January 2017

DOI: 10.1504/IJMIE.2017.10000647

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Int. J. Management in Education, Vol. 11, No. 1, 2017 1

Determinants of study abroad decisions among

Indian students: a PLS approach

Kavitha Haldorai*
School of Business and Management,
Linton University College,
KTG Education Group,
Negeri Sembilan, Malaysia
Email: ootykavitha46@yahoo.co.in
*Corresponding author

Souji Gopalakrishna Pillai

School of Hospitality and Tourism,
HELP University,
Kuala Lumpur, Malaysia
Email: souji.g@help.edu.my

Ketrina Kazako
Zodiak Broadcasting Station,
Lilongwe, Malawi
Email: ketrinakazako@gmail.com
Abstract: In spite of the growing number of universities, the Indian students
opt to go abroad for higher education. The objective of this study is to
determine the pre-decision factors that motivate Indian students to seek
education outside India. A total sample of 210 students was used in this study.
A questionnaire with 29 items was used to collect the data through online
survey. The data were analysed using SmartPLS due to the formative nature of
the indicators. The findings reveal that scholarship, social media, institutional
factors, country image, program structure and personal factors influenced the
students’ choice of destination. Cost did not play a significant role despite
the falling rupee value. The findings not only lead to better understanding on
Indian students, but also help the policy makers to understand the needs
of Indian students. It also suggests the factors that the host countries and their
educational institutions need to consider to attract Indian students.

Keywords: Indian students; study abroad; scholarship; social media; program

structure; institutional factors; country image; cost; personal factors.

Reference to this paper should be made as follows: Haldorai, K., Pillai, S.G.
and Kazako, K. (2017) ‘Determinants of study abroad decisions among Indian
students: a PLS approach’, Int. J. Management in Education, Vol. 11, No. 1,
pp.1–24.

Biographical notes: Kavitha Haldorai is a Senior Lecturer at the School of

Business and Management, Linton University College, Malaysia. Her research
interest includes management education, social media, human capital
management and methodology.

Copyright © 2017 Inderscience Enterprises Ltd.

2 K. Haldorai, S.G. Pillai and K. Kazako

Souji Gopalakrishna Pillai is the Head of School of Hospitality and Tourism,

HELP University, Malaysia. He is an Academician, Researcher, Columnist,
Trainer Chef, Recipe Developer, Outdoor Educator and Consultant. His
research interest includes innovative teaching methods, hospitality higher
education and green tourism.

Ketrina Kazako is Finance, Personnel and Administration Officer at Zodiak

Broadcasting Station. Her strengths are in the area of Management and
Administration. She has passion for sports and Girl Child Education with an
understanding that if you educate a girl, you have educated the nation.

1 Introduction

The Indian higher education system is facing an unparalleled transformation in the

coming decade. The inability of the indigenous educational structure in most developing
countries to satisfy ever-growing demand means that students are looking towards
western nations to secure places in higher education. By 2020, India will be the world’s
third largest economy. By 2020, India will outpace China as the country with the largest
tertiary-age population. India will be unable to supply 9 million university places needed
for its own student populations to meet the demands of their developing economies
(British Council, India, 2014). The number of existing higher education institutions has
resulted in a strong competition in higher education sector competing aggressively for
students’ enrolment for the survival of their business (Fernandez, 2010). India has a long
tradition of private higher education, dating back to the Gurukul system thousands of
years ago. In Gurukul system, the Brahmins (the learned) and the Kshatriyas (the
warriors) attained knowledge by staying with the guru (teacher) at his private dwelling
over a long period of time (Gupta, 2005). They did not have to pay tuition fees, but
after the completion of their education cum training, the guru could ask for a Dakshina
(financial payment). Gupta (2005) stated that in 1947–1948, India had just 20
universities and 496 colleges. By 2005–2006, the numbers grew to 348 universities and
17,625 colleges. The private sector comprised 57% of the total higher education system
by the 1980s and rose to 75% in the 1990s, absorbing students but also raising the
demand for higher education by making it accessible and affordable.
According to the Ministry of Human Resource Development, the All India Survey
on Higher Education (AISHE, 2013) reported that there are 642 universities, 34,908
colleges and 11,356 stand- alone institutions in India. They estimated the total
enrolment in higher education to be 28.56 million. In spite of the growing number of
universities, the Indian students opt to move abroad for higher education. USA has seen a
6.1% surge in its 2014 enrolment and India is the second biggest contributor to USA’s
international student numbers, contributing $3.3 billion to the US economy (Open Doors
Survey, 2014). Most of the higher education enrolments are not only from Indian metros
but also from tier 2 and tier 3 cities like Coimbatore, Madurai, Trichy and Chandigarh.
The middle-class study-abroad aspirants have penetrated into other Asian countries as it
is affordable and closer to home. Their enrolment in universities from Singapore,
Malaysia, Japan and Hong Kong is steadily increasing. One of the main reasons for
Indian students to study abroad is a degree from a top foreign university tends to be
 Determinants of study abroad decisions among Indian students 3

valued more in the Indian job market than a local degree (Altbach and Balán, 2007).
However, there is a decline in enrolment for UK higher education due to the weakening
of the Indian rupee versus the British pound, and the UK government’s recent changes in
visa regulation, as seen in Figure 1. The UK universities faced a 12% drop in the number
of Indian students for 2013–2014.

Figure 1 Top five destinations and number of students from India studying abroad

Destination Number of Students

1 USA 103,968

2 UK 38,205

3 Australia 20,429

4 New Zealand 6650

5 Canada 4617 (2009)

Source: UNESCO Institute for Statistics (2012)

Just like every other business, the education industry is also striving in implementing
their marketing strategies just to make sure they stay ahead in the competitive market.
Daily et al. (2010) further explained that the capability of higher education institutions to
entice more foreign students has become a crucial advantage as there is stiff competition
among universities. Hence, there is a need for thorough understanding of students’
perception towards universities to be able to review and apply the marketing strategies
where necessary.
The tertiary education institutions need to market themselves in a climate of
international competition in order to stand exceptional from their competitors as it is
believed that the education institutions having solid and unique marketing strategies
tend to survive in the competitive market (Palacio et al., 2002). Thus, with the stiff
competition in the education sector, it is important for institution owners to understand
the needs and wants of the students to be able to survive in the competitive market. Most
institution owners believe that investing much on advertising about their institutions will
draw more students. The researcher, however, argues that advertising without first
knowing what your target customers’ needs and wants are is like building a house
without a foundation. This paper, therefore, attempts to assess the factors that students
consider when choosing a place to study.

2 Theoretical background and development of hypotheses

Dahari and Abduh (2011) in their study focused on students’ decision-making to pursue
postgraduate studies overseas. They looked at factors like programs and combined it with
prominence because they perceived that if a university is offering unique programs that
are most preferred by most students, other universities tend to copy that and start offering
4 K. Haldorai, S.G. Pillai and K. Kazako

the same programs. That’s when prominence comes in. Prominence of the lecturers of
that particular university makes it more competitive. Other factors include environment,
facilities, scholarship, convenience and price. The demand for higher education has been
driven by expectations of its capability to raise the economic and social status of the
graduates. For students in developing countries, limited access to higher education in
their home country accelerated the number of students studying abroad. The “push and
pull” factors that encourage students to study abroad explain the global pattern of
international students flow (Mazzarol and Soutar, 2002). Their findings supported the
findings of McMahon (1992) that movement of international students can be explained
by a combination of push and pull factors. The push factors operate within a source
country to initiate the student’s decision to study overseas, while the pull factors operate
in the host country to make that country relatively attractive and desirable than others as
a place for study. This paper will focus on these push and pull factors along with
scholarship (Soutar and Turner, 2002), since the increase in the number of scholarships
available contributes to the increase in numbers of Indian students going abroad for
higher studies.
According to Ajzen (1991, p.181), intention is defined as “how hard a person is
willing to try and how much effort they are willing to put forth in order to perform a
given behaviour.” He further asserted that a person’s attitude or behaviour could affect an
individual’s action or decision. Many studies have identified various factors that affect
students’ intention to study abroad. According to a study conducted by Toncar et al.
(2006), the students felt financial aid was important to them while studying abroad. In
addition, the students considered increasing job opportunities and chance to work abroad
to gain experience are some of the important reasons to study abroad. Mazzarol and
Soutar (2002) recognised the push and pull factors that influenced students’ intention to
study abroad. Chen and Zimitat (2006) conducted a study among the Taiwanese students
and found that the most important factor shaping Taiwanese intention to study in USA
was family and peers. The main reason for Indian students to study overseas was to gain
an international experience by interacting with students from other nationalities,
countries and cultures (Bhatia and Anderson, 2012). They also found that the students
from India recognise Australian courses and delivery methods to be more effective
compared to the pedagogy followed in Indian institutions. Researches also suggest that
individuals will select a particular higher education institution abroad if the benefits of
attending that institution outweigh the perceived benefits of attending other higher
education institutions in the home country (Wagner and Fard, 2009).

2.1 Impact of cost

The cost factor includes education cost as well as living cost. Cost has a vital impact on
student’s choice of study destination (Daily et al., 2010). Some universities cover the cost
through scholarships, while some expect the students to pay. Ancheh and Krishnan
(2007) in their study on students’ choice of higher education reflected that most students
were conscious of cost and preferred to register in higher education institutions that
offer quality programs at low cost. A similar study by Yang (2007) identified low
education fee and low cost of living as the most influencing factors in
Chinese students’ decision to study in Australia. On the other hand, South African
students studying in Finland were influenced by the cost of education, which included
 Determinants of study abroad decisions among Indian students 5

low tuition fee and low cost of living at school (Keskinen et al., 2008). In support of this
finding, Padlee and Kamaruddin (2010) concluded cost of education such as tuition fee,
accommodation and exchange rate as some of the factors determining the decision-
making choice, a process that students goes through when deciding to study abroad. The
cost of studying abroad varies greatly depending on the type and location of the program,
the length of stay and whether the program is administered through a university or an
outside program. The cost of going to university plays an influential role when selecting
between several universities that offer a similar course (Price and Matzdorf, 2003).
However, Maringe and Carter (2007) in the study on international students’ motivation to
pursue higher education in UK showed a negative relationship between cost and student
enrolment, meaning cost did not have an impact on other students. They further
highlighted that most students come from wealthy families and they could afford any
university fees despite the demand of the institution alone. The high-income class
students do not really consider cost much when deciding for a place to study. In his study
on students and university perception, Johnston (2010) found that most students’ choice
was not influenced by the low cost of education but rather a multicultural diversity
environment in the universities they were enrolled in among other factors; nevertheless,
other students mention cost as not an influencing factor to them.
Hypothesis 1: Cost has a positive impact on Indian students’ choice to study abroad.

2.2 Scholarship
The past decade has seen a massive increase in the number of Indian students going
abroad for higher studies. Earlier the trend was for Indian students to complete an
undergraduate degree in India, work for a few years and then go abroad for a
postgraduate degree. We see positive changes now, as students aspire to even do their
undergraduate studies abroad and also opt for vocational job-centric courses (Ramani,
2015). The increase in the number of scholarships available contributes to the increase
in t h e number of Indian students going abroad for higher studies. Scholarship plays
a great role in influencing the students’ choice of study destination. Scholarship simply
refers to where students’ education funding is from (it can be the family or the
government of that particular student’s home country sponsoring the education) or
students sponsoring themselves (self-sponsorship). In his study on Thai students’ choice
to study abroad, Pimpa (2003) found that family financial sponsorship was not only
their major factor, but also a key factor to their selection of academic programs and
university since they (sponsors) were the ones to cater to their (students) cost. In line
with that, Mazzarol and Soutar (2002) in his study on Indonesian, Taiwanese, Indian and
Chinese students in Australia, found that most students identified financial supporters as
family support for tuition fee, cost of living in a foreign country and related expenses as
factors determining their choice to study in Australia. Most students further noted that
financial sponsors may support or constrain their university selection choice. Other
studies revealed that most of the students’ choice of university selection is determined by
the sponsors in the sense that they are the ones to perceive the cost expenses, i.e. tuition
fee, accommodation fee, living cost, etc. (Soutar and Turner, 2002). In spite of having
high tuition fees and other costs in UK, USA or Australia, these countries are still
attractive among students because of the numerous financial supports and scholarship
opportunities on offer and also the possibilities of working during the study period
(OECD, 2013).
6 K. Haldorai, S.G. Pillai and K. Kazako

Hypothesis 2: Cost has a greater impact on the choice to study abroad when there is
scholarship.

2.3 Institutional factors

Institutional factors include university reputation, quality of professors, international
recognitions, facilities and academic quality (Cubillo et al., 2006). University reputation
includes university ranking, qualification quality, quality of teaching, quality of
programs offered and the availability of good learning facilities to support students, etc.
University reputation has a great impact on students’ choice of study destination Shanka
et al. (2005). For the South African students, university reputation was one of the
considerations when selecting universities. Most students from Singapore studying in
USA were influenced by university recognition, ranking and prestige (Skolnik and Jones,
2002). In line with that, Daily et al. (2010) also mentioned in his study that the most
influencing factor for most students studying in USA was the recognition of US degree.
Other studies unanimously pointed out that university reputation is an important factor
affecting students’ choice of higher education learning (Ancheh and Krishnan, 2007; Sia,
2010). However, Dahari and Abduh (2011) argued to that saying that other students
preferred universities which have good learning facilities to make their studying easy and
fun. Therefore, university reputation does not really have an impact on such students.
The findings of other studies show that reputation of the university and programs
offered at a particular university were among the factors that students considered when
enrolling in a university. Wagner and Fard (2009) and Fernandez (2010) in their studies
highlighted that students’ choice of a study destination includes the type of programs
offered by the institution. Most Thai students according to Pimpa (2003) were influenced
by the recognition of UK qualification and its reputation for quality education. Other
students like the fact that a UK degree is globally recognised since it is considered one of
the international leaders in the higher education sector.
Hypothesis 3: Institutional factors have a positive impact on students’ choice to
study abroad.

2.4 Country image

Now international students are more pragmatic than before. Sometimes they even
compromise with different risk factors, e.g. racism, discrimination, vulnerable
institutional power, etc., which affect a country’s international image while considering a
country, a city or an institution, although these factors were major considerations in
Singh et al. (2014).
Country image includes political stability, safety, natural beauty, cultural
environment, etc., as ways of developing university brand to attract students. Country
image has a great influence on the purchase intention on students as it gives the first
impression on students towards the learning institutions of their choice (Cubillo et al.,
2006). However, Skolnik and Jones (2002) argued that most students prefer universities
where they feel they will gain a qualification which will be recognised globally
leaving aside the country. Therefore, such students do not really consider country image
as priority when considering a study destination. Other findings show that lesser
bureaucracy and efficient application process influenced most students to study in UK.
On the other hand, some Chinese students were influenced by the social and cultural
 Determinants of study abroad decisions among Indian students 7

experiences to choose Macau and Hong Kong as their study destination (Davey, 2005).
USA’s reputation as being one of the world’s best and most prestigious countries
influenced a lot of students to study there (Mazzarol and Soulta, 2002). Country image
can greatly influence the students and their perception of education. Students evaluate a
country’s image based on its geographical location, cultural proximity and immigration
prospects. Paulsen (1990), Raposo and Alves (2007) and Dawes and Brown (2005)
pointed out that proximity to the home country is one of the crucial factors in the choice
of selecting a university. The choice is also based on the existing similarity in cultural
values. Bodycott (2009) identified immigration to the hosting country after graduation is
an important factor motivating students to study abroad. Universities are competing with
each other to attract international students to their campuses (Hemsley-Brown and
Goonawardana, 2007; Migin et al., 2015). Again in many countries, because of the
demographical changes and their impacts, governments are changing their immigration
policies on a regular basis and backing up the universities’ international student
recruitment campaigns (Lukaszczyk, 2013). The recent development in information and
communication technology makes students able to verify any information. In addition to
Srikatanyoo and Gnoth’s (2002) claim of country image, Cubillo et al. (2006) claimed
that students’ purchase intentions are also influenced by city image (Rudd et al., 2012).
They argued that the city is the environment where the service would be produced and
consumed. The physical environment in a city holds the facilities that are required while
studying. However, sometimes, it is difficult to distinguish factors at city level from
country level, especially when the country is small. Thus, the same factor can equally be
applied at both the city and the country level. A country’s immigration policy plays an
important role in attracting international students. In their empirical study on Chinese
students’ decision-making process for UK business schools, Rudd et al. (2012) found that
getting the UK visa is much easier for Chinese students in comparison with other countries.
Different studies found that a country’s geographical proximity and thus minimum
travelling distance, cultural closeness and/or almost similar climates and environments
also have an influence on students’ decision-making process (Singh et al., 2014; Jon et al.
2014).
Hypothesis 4: Country image has a positive impact on students’ choice to study abroad.

2.5 Social media

The span and depth of internationalisation of higher education are amplifying with the
growth of social media. The decision to study abroad is a multiplex process for students
who are unlikely to visit a university campus abroad. Social media provides ample
opportunities to aspirant students to collect information within a short period of time at
lower cost. In response to this, the major international educational providers from UK,
USA and Australia (Verbik and Lasanowki, 2007) apply more proactive and creative
marketing approach and techniques to attract international students (Ancheh and
Krishnan, 2007; Petruzzellis and Romanazzi, 2010). Altbach (2003) found that the Asian
students rely on social media such as university’s webpage, FB page and blogs when
selecting universities abroad for higher studies. They use social networking sites for
gathering information about the programs, course fee and the comments from the current
and past students. Brown and Warschauer (2006) emphasised that universities must
ensure that their online presence is regularly updated as many prospective students check
8 K. Haldorai, S.G. Pillai and K. Kazako

these social sites while deciding to enrol themselves. A survey by Forrester indicated that
by 2019 social media advertising will grow from 21.6% compound annual growth rate to
$5.8 billion in Australia, China, India, Japan and South Korea (Miglani, 2014). Hence, it
can be claimed that students are actively seeking information via social media.
Hypothesis 5: Social media communication has a positive effect on the students’
choice to study abroad.

2.6 Program structure

Programs and courses are the product that the universities have to ‘sell’ to the students to
attract them. Program evaluation influences students’ selection of a program and a major.
Universities aim at improving their quality of education and try to offer a variety
of courses and programs. Yang (2007) found that a wide range of programs was one of
the influential factors to study abroad. Similar results were obtained from the studies of
Chen and Zimitat (2006). Students tend to choose those programs that are new or
rare in their home country and that help them in securing a job. Programs have to take
note of the demand of the labour market and thus focus on the knowledge needed in
order to successfully start a career. Sometimes all universities are very similar in terms of
programs and quality of teaching, so in these conditions, students can use some basic
criteria of selection in order to choose a university. Recommendations from former
program professors also influence the students’ decision as to where to go for further
studies. The testimonials from the current students enrolled for a particular program also
influence the students’ choice. Furthermore, Tavares et al. (2008) claimed that ‘vocation’
or specialisation was a stronger reason for program choice than employment prospects.
Hypothesis 6: Positive program evaluation has an impact on students’ choice to study
abroad.

2.7 Personal factors

The presence of social ties in the form of family or friend influences a student’s study
destination. At the same time, it is also argued that the students are independent and the
presence of family members does not play a dominant role (Bhatia and Anderson,
2012). When students plan to study abroad, they gather information from parents,
relatives and private circle. Students tend to trust their family and friends rather than the
universities that they are not aware of. Lee and Morrish (2011) stated that parental role
plays a major role in Chinese and Indian students’ decision to go abroad for higher
education. Similar results were obtained from the studies of Pimpa (2005) according to
whom Thai students’ choices were influenced by their parents. In a similar research
carried out by Mazzarol and Soutar (2002), recommendations and considerations from
family and friends were highly influential on students’ decision. This is in line with the
studies by Hossler et al. (1999), Cabrera and La Nasa (2000) and Kim and Schneider
(2005). There are many instances when family and friends add prospective students to
university social media groups or recommend following the university social media
groups to interact with professors or administration assistance for course selection
(Bodycott, 2009; Lee and Morrish, 2011). Other personal factors include the presence of
students from one’s home country, previous travel experience and the quest to gain
international exposure Yang (2007). Exposure to new experience, culture and life
 Determinants of study abroad decisions among Indian students 9

motivates an individual to study abroad. Bhatia and Anderson (2012) found that the main
reason for Indian students to study overseas was to gain an international experience by
interacting with students from other nationalities and cultures. Teranishi et al. (2002)
explored the college choice process for Asian American students in USA. The factors
that were included in the framework for the student’s decision-making process were
information and guidance, cost and aid, prestige and reputation, and college application
choices. The research suggests that this is a direct result of studying abroad and its effect
on transforming the student’s cross-cultural and global perspectives. This becomes an
essential part of developing more holistically (Chickering and Braskamp, 2009).
Moreover, it was found that students increased their self-reliance and self-confidence. A
study by Shanka et al. (2005) showed that 37% of international undergraduate students
rated parents and friends as their major sources of information for UK and Australia. The
main reasons for this include the possibility of having friends studying at the same
institutions, personal experiences of friends and their family members. The influence of
family and friends are all related to the importance of word-of-mouth communication,
which is seen as objective, reliable and not commercially oriented. Nyaupane et al.
(2011) also found that students’ close friends who live in foreign countries have the
highest influence on them than any other factors to choose an overseas study destination.
Students like to go to the same foreign destination where their friends live because their
presence attaches the students psychologically with those destinations.
Hypothesis 7: Personal factors motivate students’ to study abroad.

3 Research methodology

A survey was administered electronically to the Indian students studying abroad via the
Facebook community page from various programs, universities and countries to ensure
diversity and to get a holistic picture. Quantitative analysis was carried out because it
establishes statistically significant conclusion about the population. It tries to quantify a
problem and understand how prevalent it is by looking for projectable results to a larger
population (Creswell, 2003). Additionally, quantitative analysis allows the calculation of
effect size which is particularly valuable for quantifying the effectiveness of a particular
intervention. It promotes a more scientific approach to the accumulation of knowledge
(Cohen, 1988).
In all, 210 students from various universities responded. Guilford (1954)
recommended that a sample of 200 is the minimum for ensuring statically reliable results.
Hence, the results from the study will be statistically reliable. The survey addressed
questions pertaining to the cost of the program, institutional factors, country image,
social media, program evaluation and personal factors. The framework was developed
based on models of student enrolment behaviour theory that started to emerge in the early
1980s. Items from the studies of Cubillo et al. (2006), Schiffman and Kanuk (2007),
Domino et al. (2006), Bourke (2006) and Brown and Warschauer (2006) were used to
measure the constructs. The questionnaire had 29 questions that were segregated into five
sections. All the items were anchored on a 5-point Likert scale from ‘strongly disagree’
to ‘strongly agree’. The hypotheses were tested using SmartPLS as some of the
constructs (institutional factors, country image, social media, program structure and
personal factors) were formative in nature. Since the Structural Equation Modelling
10 K. Haldorai, S.G. Pillai and K. Kazako

(SEM) approach also takes into account the unobserved concepts and the measurement
error in the estimation process (Kline, 1998), it was selected to examine the structural
relationships between the variables.

4 Analysis and results

The summary of demographic characteristics of the respondents indicates that the

number of male students studying abroad slightly outnumbers the female students. The
popular fields among the Indians studying abroad are business or STEM-related (science,
technology, engineering, and mathematics). The majority of the students are pursuing
their master’s degree. The distribution among bachelor’s degree and the doctoral
degree is somewhat fairly equal. Few have enrolled for diploma and a dvanced d iploma
courses. A handful is engaged in postdoctoral programs (Table 1).
Table 1 Profile of students

Variable Characteristics Frequency Percentage

Male 114 54
Gender
Female 96 46
Business and management 37 18
Health science/medicine (internal 13 6
medicine, pre-med)
Engineering and technology 48 23
Field of study Psychology 30 14
Accounting and finance 35 17
Religious studies 2 1
Sciences 42 20
Early childhood studies 3 1
Diploma and advanced diploma 6 3
Bachelor’ degree 46 22
Degree pursuing Master’s degree 94 45
Doctoral degree 59 28
Postdoctoral 5 2
USA 52 25
UK 44 21
Canada 18 9
New Zealand 23 11
Germany 29 14
Study location
Australia 31 15
Malaysia 2 1
Singapore 5 2
Japan 3 1
Hong Kong 3 1
 Determinants of study abroad decisions among Indian students 11

USA is the most preferred destination, closely followed by UK. There is an equal
distribution of response from Germany and Australia as seen in Figure 2. However, few
respondents are distributed in the neighbouring countries like Malaysia and Singapore.

Figure 2 Number of Indian students heading abroad (see online version for colours)

Source: UNESCO Institute for Statistics (2012)

The hypotheses were tested using SmartPLS (Ringle et al., 2005). The research model is
shown below in Figure 3.

Figure 3 Proposed research model (see online version for colours)

12 K. Haldorai, S.G. Pillai and K. Kazako

In Figure 3, H2 (scholarship) acts as a moderating variable and moderates the effect on

cost on decision to study abroad (H1). The moderation effect is tested in the absence of
moderator (Table 2 and 5) and after the introduction of the moderator (Table 8), its
effects are studied. In the absence of moderation, cost was not statistically related to the
decision to study abroad. After the introduction of moderation, cost had a significant
relationship with the decision to study abroad. Hence, cost has an impact in the presence
of scholarship. As discussed in the literature review section, the increase in a number of
scholarships for Indian students (Aga Khan Foundation scholarship, Tata scholarship,
etc.) contributes to the increase in the number of Indian students going abroad for higher
studies.

4.1 Assessment of measurement model

For the reflective items (cost and study abroad), convergent validity was assessed
through the loadings, composite reliability and average variance extracted (Hair et al.,
2010). All the items exceeded the recommended value of 0.6 (Chin et al., 1997).
From Table 2, it is observed that the indicator reliability exceeded the minimum
acceptable level of 0.4 (Hulland, 1999). The composite reliability exceeded the
recommended value of 0.7 (Hair et al., 2010) and the average variance extracted
exceeded 0.5 (Hair et al., 2010). Hence, the convergent validity was achieved as shown
in Table 2.
Table 2 Summary of results for reflective measurement model (before moderation)

Latent Indicator Composite

Indicators Loadings AVE
variable reliability reliability
Cost1 0.771 0.594
Cost2 0.794 0.631
Cost 0.847 0.609
Cost3 0.752 0.567
Cost4 0.804 0.646
SC1 0.733 0.537
Study abroad SC2 0.749 0.561 0.712 0.759
SC3 0.794 0.630

To determine the discriminant validity, the Fronell–Larcker criterion was used. It can be
observed from Table 3 that the square root of the average variance extracted is larger
than off-diagonal values, indicating discriminant validity is achieved (Fornell and
Larcker, 1981). For the formative indicators, the outer weight and its significance and
collinearity of the indicators were assessed.
To check the collinearity of the indicators, the tolerance and Variance Inflation
Factor (VIF) values were calculated using SPSS. The results are shown in Table 4.
Multiple regressions were carried out in SPSS to generate the VIF values for checking
collinearity. The VIFs of all indicators are lower than 5. Hence, the there is no issue of
collinearity.
 Table 3

Cost Country image Institutional factors Personal factors Program evaluation Social media Study abroad
Cost 0.780
Formative
Country image 0.331 measurement
model
Formative
Institutional factors 0.475 0.405 measurement
model
Formative
Personal factors 0.703 0.235 0.312 measurement
model
Formative
Program evaluation 0.279 0.154 0.249 0.255 measurement
Fronell–Larcker criterion (before moderation)

model
Formative
Social media 0.325 0.185 0.317 0.333 0.560 measurement
model
Study abroad 0.243 0.308 0.334 0.216 0.429 0.364 0.871
Note: The square root of AVE values is shown on the diagonal in bold for reflective constructs. The non-diagonal elements are the latent variable correlations.
Determinants of study abroad decisions among Indian students
13
 14

Table 4

Institutional factors Country image Social media Program evaluation Personal factors
Indicators VIF Indicators VIF Indicators VIF Indicators VIF Indicators VIF
International
University partnership 1.282 Geographical location 1.321 FB page 1.145 Duration 1.032 1.210
experience
Variance inflation factor results

Opportunity Courses unavailable in

1.321 Cultural proximity 1.596 Student testimonials 1.088 1.010 Family and friends 1.289
to work home country
K. Haldorai, S.G. Pillai and K. Kazako

Quality of education 1.291 Immigration prospects 1.260 Social media ads 1.053 Wide range of programs 1.021 Previous experience 1.135
Future employment Blogs by faculty Presence of students
University reputation 1.454 1.564 1.166 1.053
opportunities members from home country
International exposure 1.397 Visa processing 1.467 Instant message from 1.123
admission counsellor
 Determinants of study abroad decisions among Indian students 15

Finally, the outer model weights and its significance were assessed. From Table 5, the
formative indicators were significant. Those indicators with high weight are important
factors that students consider while deciding to study abroad.
Table 5 Outer model weight and significance (before moderation)

Formative Formative Outer weights Significance

t-value
constructs indicators (outer loadings) level
University partnership 0.202 (0.596) 1.905 *
Institutional
Opportunity to work 0.187 (0.564) 1.677 *
factors
International exposure 0.201 (0.642) 2.839 ***
Geographical location 0.163 (0.288) 2.617 ***
Cultural proximity 0.567 (0.281) 1.867 *
Immigration prospects 0.601 (0.625) 2.506 ***
Country image
Future employment
0.211 (0.465) 1.718 *
opportunities
Visa processing 0.627 (0.790) 2.578 ***
FB page 0.432 (0.369) 2.308 **
Student testimonials 0.628 (0.863) 3.328 ***
Social media ads 0.806 (0.725) 3.525 ***
Social media
Blogs by faculty
0.416 (0.663) 1.741 *
members
Instant message from
0.128 (0.219) 1.647 *
admission counsellor
Duration 0.392 (0.424) 1.847 *
Courses unavailable
Program 0.877 (0.897) 3.327 ***
in home country
evaluation
Wide range of
0.157 (0.302) 1.652 *
programs
International
0.270 (0.579) 1.758 *
experience
Personal Family and friends 0.269 (0.558) 2.751 ***
factors Previous experience 0.534 (0.694) 1.879 *
Presence of students
0.444 (0.727) 1.943 *
from home country
Note: *p < 0.10; **p < 0.05; ***p < 0.01.

4.2 Assessment of structural model

The structural model is assessed for collinearity and path coefficients. Similar to
the assessment of formative measurement model, the VIF values are calculated
(Table 6).
16 K. Haldorai, S.G. Pillai and K. Kazako

The latent variable scores were used to calculate the VIFs. Since the VIF values are
less than 5, there is no issue of collinearity. Table 7 shows, except cost, all the other
hypothesised relationship among the constructs of the study. It is evident that the
entire hypotheses were tested.
Table 6 Collinearity assessment for structural model

Constructs VIF
Cost 1.077
Institutional factors 1.267
Country image 1.309
Social media 1.001
Program evaluation 1.068
Personal factors 1.523
Scholarship 1.758

Table 7 Results of the structural model path coefficients (before moderation)

t-values Significance level Supported

Cost -> study abroad 0.934 NS No
Country image -> study abroad 2.161 ** Yes
Institutional factors -> study abroad 1.923 * Yes
Personal factors -> study abroad 1.731 * Yes
Program evaluation -> study abroad 1..648 * Yes
Social media -> study abroad 2.943 *** Yes
Note: NS = Not significant.
*p < 0.10; **p < 0.05; ***p < 0.01.

4.3 Moderating effect

Institutional factors, country image, social media, program evaluation and personal
factors had a positive impact on student choice to study abroad, explaining 24.4%
(R2 = 0.244) of the variance in the decision to study abroad. After the introduction of the
moderating variable (scholarship) using product indicator approach (Chin et al., 2003),
R2 increased from 0.244 to 0.274. The moderator effect can be found by calculating the
effect size as
f 2  Ri2  Rm2
,
1 – Ri2

which is f2 = 0.023 in our study. According to Cohen (1988), the effect is considered to
be small. After the introduction of a moderator, the measurement model was assessed for
convergent validity, discriminant validity and collinearity. All the necessary cut-off
values were met. Table 8 shows the path coefficients of the structural model after the
introduction of a moderator, after which all the factors were significant.
 Determinants of study abroad decisions among Indian students 17

Table 8 Results of the structural model path coefficients with moderation

t values Significance level Supported

Cost -> study abroad 1.981 ** Yes
Cost* scholarship -> study abroad 1.983 ** Yes
Country image -> study abroad 1.981 ** Yes
Institutional factors -> study abroad 1.923 ** Yes
Personal factors -> study abroad 1.731 * Yes
Program evaluation -> study abroad 2.084 ** Yes
Social media -> study abroad 2.943 *** Yes
Note: *p < 0.10; **p < 0.05; ***p < 0.01.

5 Discussions and implications

The first hypothesis states that cost has a significant impact on students’ choice to study
abroad. The relationship is stronger in the presence of scholarship (Hypothesis 2). Cost
was identified as one of the direct main reasons in deciding the choice of destination.
This is in line with the findings of Mazzarol and Soutar (2002) that students are willing
to pay for a course that is rare in the education market. At the same time, they are also
willing to pay more for a prestigious university. The cost of studying abroad includes the
living cost apart from the tuition fee. The availability of scholarships paves a way for
students to have a wider range of choices. Maringe (2006) also emphasised costs that
include the living expenses as one of the push factors to study abroad. The findings are
also consistent with that of Price and Matzdorf (2003), who concluded that cost is one the
most influential factors when deciding to study abroad. Furthermore, Bodycott (2009)
indicated that scholarship availability influences students’ decision-making process. The
impact of scholarships was appraised profoundly by Kim (2004), Govan et al. (2006) and
Hoyt and Brown (2003). The past decade has seen a massive number of Indian students
aspiring to study abroad even for an undergraduate program. One of the main
contributing factors is the availability of scholarships to qualifying students. Some of the
important scholarships include the one that the Aga Khan Foundation provides that
assists students with tuition fees and living expenses. Chevening Scholarships funded
by Foreign and Commonwealth Office are awarded to outstanding scholars to
pursue postgraduate courses in UK. The commonwealth scholarship managed by
Commonwealth Commission, the British Council and the Government of India are
available for students interested in engineering, agriculture and social science courses.
The United States India Educational Foundation promotes academic partnerships
between Indian and American universities. They offer scholarships such as Tata
Scholarship, Brandes Scholarship and the University of California Berkeley Scholarships
to study in top American universities. With the falling rupee value and the rocketing
cost of living, utilising the available scholarships is very vital for Indian students. The
availability of these scholarships to Indian students allows them to choose the program of
their choice and decreases the impact of cost on their decision. The availability of
scholarship encourages more students to go abroad. Binsardi and Ekwulugo (2003) also
highlighted the importance of scholarship to students aspiring to study abroad.
18 K. Haldorai, S.G. Pillai and K. Kazako

Hypothesis 3 proposes that institutional factors are positively associated with

students’ choice to study abroad. This finding confirms the outcomes of previous
studies (Eder et al., 2010; Maringe, 2006; Petruzzellis and Romanazzi, 2010; Soo and
Elliott, 2008; Soutar and Turner, 2002) that institutional factors such as university
reputation, academic quality, university partnership with corporate firms, international
exposure and opportunity to work are some of the influential factors in students’ choice
to study abroad. Reputation of a university is assessed by student satisfaction survey
that later acts as an ambassador. The institutional factors play a key role in attracting
international students. Since in India very little effort is taken to upgrade the quality of
faculty, the institutional factors play a very crucial role. With the sluggish economic
growth in India, it is difficult for fresh graduates to secure a job even if one has acquired
a foreign degree. It becomes imperative for one to look for a university that offers
opportunity to work.
Hypothesis 4 postulates that country image has a positive impact on students’ choice.
The findings are in line with the previous works of literature (Chen and Tsai, 2007;
Srikatanyoo and Gnoth, 2002). The destinations’ attractiveness can greatly influence the
decision of students. Country image reflects the geographical location (Veloutsou et al.,
2004; Wagner and Fard, 2009; Beneke and Human, 2010), cultural proximity (Gray
et al., 2003), immigration opportunities (Bodycott, 2009; Chen and Tsai, 2007; Mazzarol
and Soutar, 2002; Yang, 2007) and future employment. Students tend to evaluate each
destination based on the merits and goals. Indian students have a strong urge to keep
the family traditions and culture referents. The prime reason for Indian students to
pursue studies in UK is mainly related to career or employment-related goals.
Hypothesis 5 states that social media communication has a positive effect on
students’ choice to study abroad as evidenced from previous researches (Altmann and
Ebersberger, 2013; Levitz, 2012; Mazzarol and Soutar, 2002). Students prefer to watch
the institutional facilities and read testimonials about the university. The university
website is the key source of information. The use of social media is high in the initial
information gathering stage. Indian students spend more time online. Finding information
about career opportunities and academic study plays an important role in a country
whose population is dominated by young people where 40% of Indian citizens are
under the age of 25. Choudaha et al. (2013) found that Indian students use social media
as the most preferred source of information apart from family and friends. The Indian
students considered the information obtained through social media as informative,
relevant and credible.
Hypothesis 6 proposes that positive program evaluation has an impact on students’
choice to study abroad. Similar to previous studies (Bodycott, 2009; Maringe, 2006;
Petruzzellis and Romanazzi, 2010; Pimpa, 2003; Yang 2007), students evaluate the
programs before deciding to enrol in a university. According to Prince et al (2003), the
availability of the desired course is of utmost important for students when selecting a
university. Program evaluation results in the students’ choice of the program and
major. The research opportunities offered in countries like USA and UK are far ahead
of the facilities and resources offered in India. Furthermore, if the course is a rare one in
the educational market, the depth and structure are not up to what is offered abroad. For
instance, if a student wishes to pursue filmmaking, the number of institutions offering
this course, in India, is just a handful and these institutes offer only diplomas, unlike the
foreign counterparts which offer bachelor’s degree course in filmmaking.
 Determinants of study abroad decisions among Indian students 19

Hypothesis H7 postulates that personal factors motivate students’ choice to study

abroad. The findings are in line with the previous researches of Umashankar (2001) and
O’Brien et al. (2007). Family plays a major role in Indian student’s decision-making
process in seeking, choosing and enrolling at a university abroad. Several related studies
report that, in Asian culture, the influence of family and friends plays a dominant role in
students’ choice of destination for higher education (Joseph and Joseph, 2000; Pimpa,
2003; Chen and Zimitat, 2006; Wagner and Fard, 2009, Lee and Morrish, 2011).
Recommendations from friends and relatives are considered to be the ‘push'’ factors, as
cited by Mazzarol and Soutar (2002), in motivating a destination choice for students from
Taiwan, India, China and Indonesia. The students perceive that the information obtained
from family and friends is trustworthy. Indian parents are increasingly willing to spend
more for their children’s education and are ready to go that extra mile to send
them abroad. In Asian countries, parents have an upper hand in deciding the choice of
their children’s higher education.
Given these findings, these can be used as tools for attracting more Indian students
and also for retaining them so as to stand tall in the market. On the other hand, there is a
need for significant change in Indian academic culture. Securing admission in top
national universities has become a challenge due to the reservation policy. Such stringent
policies lower the chances of students for gaining quality education and have finally
resulted in brain drain. In order to expand the Indian education capacity, foreign
universities must be encouraged to establish their partnership and offer collaborative
programs with Indian universities. Additional universities can be set up at par with IIMs
and IITs to restrict students from going abroad to seek higher education. Students
perceive that a foreign degree is equivalent to better employment. The courses should be
revamped and restructured with the guidance of industrial experts to impart
employability-based skills. Apart from investing in tangibles, the universities must focus
in developing academic excellence. Students who have gone abroad especially to seek
education in science and technology should be encouraged to return to their home
country to eradicate poverty and to improve employment prospects.

6 Conclusion

Indian students’ decisions to study abroad were found to be mainly influenced by social
media. Cost did not have a direct influence on students’ choice; however, when
moderated with scholarship, cost influenced students’ decision to study abroad. The other
variables also significantly influenced their decision. The findings of this research can be
useful to other higher education institutions in designing strategies to attract and satisfy
students in the current era, which is highly competitive.
International student recruitment plays a key role in shaping and challenging the
higher education sector in countries around the world. The findings not only lead to
better understanding on Indian students, but also help the policy makers to understand the
needs of Indian students. The findings of this research can be useful to other higher
education institutions in designing strategies to attract and satisfy students in the current
era, which is highly competitive. It also suggests the factors that the host countries
and their education institutions need to consider for attracting Indian students. The
findings have added to a better understanding of Indian students and the reasons for
choosing overseas study destinations. From the theoretical perspective, this research has
20 K. Haldorai, S.G. Pillai and K. Kazako

undoubtedly contributed to the present literature by providing a more in-depth

understanding of the proposed structural relationships. As the study focuses on Indian
students and India being one of the most populated countries, it provides a significant
opportunity to advance the literature on decisions to study abroad. It also provides a
platform for higher education institutions, government agencies and policy makers to
develop strategies to attract students from India. The findings of this study are useful to
those promoting their countries and institutions as international study destinations.
International recruiters, admission officers, and policy makers could gain a better
understanding about factors that influence Indian students’ choice in the context of
international education. Viewing from the methodology perspective, this study remains
one of the few empirical works done on the structural relationship, where partial least-
squares SEM technique, which is far more superior to regression analysis, was used to
confirm the hypotheses.
However, this study only focused on the pre-decisions of the students and did not
take into account the post-decisions. A cross-sectional study was conducted in this
present research in which the causality of the links is difficult to determine. A
longitudinal study can be conducted in future in order to overcome such limitations by
ascertaining the nature and direction of the causal relationships among the model
variables. This study only focused on the pre-decisions of the students and did not take
into account the post-decisions.
Further studies may be carried out to explore the gender difference in choice of
studying abroad and the reasons for not enrolling. Longitudinal studies can be carried out
to find the long-term effect on students returning to home country.

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