Assessing the financial knowledge of university students in Germany

Background: The importance of professional competence (PC) in business administration (BA) has increased considerably in many industrial nations over the past several years. However, while economic competence is being assessed internationally in the Assessment of Higher Learning Outcomes (AHELO) study, the modeling and assessment of PC in BA needs more research, particularly from an international perspective. We defined and modeled the construct of PC in BA based on theoretical analyses and evidence from international studies and, for the assessment, focused on knowledge of BA as a key facet of PC in BA. In this article, we describe the developed structural model of knowledge in BA and present the specifications and findings for the example of financial knowledge (FK). In the model, we describe cognitive levels of FK in relation to subject content and subject didactics. Moreover, we discuss influence factors on FK. Method: Subsequently, we present the results from the empirical analyses on FK. Assessment data was gathered using an adapted and further developed international test instrument. The sub-sample for the analyses comprised 773 students from 23 institutions of higher education in Germany. We used item response models to confirm the theoretically modeled levels and multilevel modeling to analyze influence factors on FK. Results: The Rasch model showed a good fit to the data and confirmed the theoretically modeled levels. From the perspective of vocational education and training, we investigated the extent to which FK is influenced positively by commercial vocational training completed prior to higher education studies. We analyzed this while controlling personal influence factors, such as mother tongue and gender, and study-related influence factors such as completion of subject-related courses at university, number of semesters, and type of institution of higher education. We found that prior commercial vocational training affected FK even when the other influence factors were controlled. Conclusions: These results support the assumption that during dual vocational education and training students acquire professional knowledge and gain experience related to their job or practical training that are not or cannot be taught in this way at universities or universities of applied sciences. Keywords: Professional competences in finance; Measuring/assessing knowledge; Item response theory models (IRT); Multilevel models (HLM).