Economics matters and business programs are frequently blamed for effectively adding to the flippant dynamic of their alumni for many outrages related to different types of scandals, moral misconduct, and the recent financial crisis. These programs are often accused of actively contributing to the amoral decision making of their graduates. It is argued that theories and ideas taught at universities engender moral misbehavior among some managers, as these theories mainly focus on the primacy of profit-maximization and typically neglect the ethical and moral dimensions of decision making. To investigate this criticism, two overlapping effects must be disentangled: the self-selection effect and the treatment effect. The self-selection effect concerns whether economics and business students differ a priori from other students concerning their moral understanding and behavior. The treatment effect concerns whether economics and business education itself has an impact on students’ moral concepts. Moreover, we also explored the cultural effect on moral competence. In particular, we included two cultural factors relevant to Pakistan i.e. 1. Collectivism and 2. Power distance. The effect of other factors on moral competence was also assessed as control. These included age, Income, Gender, Grades, father education, mother education, political attitude, religiosity, and altruism. Drawing on the concept of moral judgment competence (MJC) i.e., their ‘‘capacity to make decisions and judgments which are moral and to act in accordance with such judgments’’ (Kohlberg 1964, p. 425)., we empirically examine this question with 350 students studying in different universities & colleges, 50 from each of the seven faculty that included business/economics, law, arts, science, medicine, IT/computer & journalism. Our results seem to partially validate the self-selection impact and reveal that on comparing business education with other six faculty with regards to self-selection effect, only IT, and Law dummy variables seem to have a significant effect, and the positive sign of both suggested both of these faculties have better moral competence as a priori as compared to business students. Apart from medicine, all others seem to have fared better in terms of morality as compared to business, although most of the impact remains insignificant. On the contrary, the treatment effect for business students was not found as all interactive faculty dummies remained insignificant. The effect of professional degrees on Micas also found to be insignificant. Concerning cultural effects, power distance, and collectivism both seem to have a positive significant impact on MJC. Moreover, power distance also seems to complement the effect of professional degree on MJC as compared to non-degree holders, on the contrary collectivism seem to have a significant and negative complementarity. Among other factors, Altruism, Income, and Political attitude seem to have a positive and significant impact on MJC. Our findings imply that—regardless of the course of studies—university education, in general, does not seem to affect students’ moral development. Eastern Culture with collectivism and power distance, along with self-selection effect to some extent, have a favorable effect on morals
