Signal quality and service quality : a study of local and international MBA programs in Vietnam

Purpose - Although it is well known that firms can use signals to inform consumers about the unobservable aspect of their products or services in a market where asymmetric information exists, research on the relationship between signal quality and service quality is largely ignored. The purpose of this study is to investigate the role of signal quality in the quality of Master of Business Administration (MBA) education in Vietnam. Design/methodology/approach - A sample of 457 MBA students in both local and international MBA programs in Ho Chi Minh, Vietnam, was used to test a model that incorporates the relationships between signal quality, program investments, perceived quality, and program loyalty by means of structural equation modeling. Findings - The results of this study indicate that signal quality has a positive impact on program quality. In addition, program investments affect both the signal quality and program quality, and program quality underlies program loyalty. Finally, no significant difference is found between local and international programs. Research limitations/implications - A major limitation of this study is the investigation of only one education service, i.e. MBA education. An extension to other types of education as well as other services would enhance the generalizability of the results. Practical implications - The results of this study suggest that MBA programs, local as well as international, should send clear, consistent, and credible signals to their students in order to position their brands in the market where information asymmetry exists. Originality/value - A major contribution of this study is the use of signaling theory to examine the relationship between signal quality and service quality.