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Why are there so many international MFE/MFin students?

Joined
6/14/11
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I know this was asked in a 2007 post but I was curious about it today...

My hypothesis is that quantitative finance/financial engineering is at the same point in Asia as it was in the US before the recession hit. Thoughts?
 
It has to do with the nature of this degree which is comprised of math, programming so it naturally attracts a lot of applicants from China/India who have taken course in these subjects as part of their general education.
The rise of the stock market in China only brings more people into finance programs. There is no evident that the sophistication level of quant finance in Asia is ever close to it is in US.
The growing of MFE programs is fueled mostly by applicants from Asia. I see no evidence that the number of US domestic applicant has risen significantly the past 5 years.
 
when you see so many people buying something, you know it is the high..
 
The majority of people in Asia, particularly in densely populated countries such as China, India, the Phillipines, want to work and eventually live permanently in the West. This is due to the fact that these countries are still much less developped and far more competitive in term of jobs and everything else due to the large population and limited resources. In some countries, corruption is a huge problem and there is much less opportunities for people to grow and become sucessful on their own without having to be corrupted themselves. A chance to work and live in the West is therefore extremely appealing to some. Due to severe competition in job market, these students in Asia usually went through an education system that overemphasize on grades and academic achievements instead of a well rounded education like in other developped countries. As a result, students tend to study harder in subjects such as Maths, Sciences, Programming which allow them to have a better chance in passing the extremely difficult university entrance exams. To imagine how competive it is over there, we can look at the China university entrance exam where there are about 10 million candidates each year and only about 8% will be admitted to one of the thousands colleges and universities there. To be in top universities such as Beijing or Tsinghua universities, one must know how to master the skills to gain an absolutely high score in all the exams. The situation is very much similar in India. There is no evidence that these students who did extremely well in Maths and Sciences in the exams will do better than other students later in their life. However, in general, students from Asia have a very high skill in Maths and Programming after many years of preparation for exams which naturally fit in the requirements of MFE programs. The rising of capitalism in China and the rapidly expanding financial market of India also contribute to the "prestigious" of a career in Finance in these societies where many people think will promise them a "glamorous life" in the future. Like Andy mentioned, many MFE programs are fueled by tuition fee from Asian applicants and as they are travelling every year to Beijing and Mumbai to advertise about the programs, more and more students from Asia are attracted to this education.
 
I see no evidence that the number of US domestic applicant has risen significantly the past 5 years.

Convergence & Divergence could be a factor... Wealth is thought to be a given in the U.S., but as we head to a new average quality of life (lower than years previous), Americans might see hard work as worthwhile. Students from emerging nations have their eye on the prize as quality of life for them is a variable based on hard work and drive (with big gains to be had...). I'm exploiting this inefficiency on the American end of the spectrum.
 
Americans have other options, like going into management/communications/law/politics/etc.
If an American is good in technology/science, he/she can be an innovator (like Steve Jobs, Mark Zuckerberg, Bill Gates, etc.).
For an American, an entrance into Finance, could be many ways - like through MBA (Finance, Accounting, etc.), relationships, etc. For a foreigner, pretty much, the only way is through math/programming.
I have heard that many American parents saying that they don't want their children go into technology / science (even if they are good at it), because of the fierce global competition - this is totally understandable.
 
Convergence & Divergence could be a factor... Wealth is thought to be a given in the U.S., but as we head to a new average quality of life (lower than years previous), Americans might see hard work as worthwhile. Students from emerging nations have their eye on the prize as quality of life for them is a variable based on hard work and drive (with big gains to be had...). I'm exploiting this inefficiency on the American end of the spectrum.

What inefficiency are you exploiting?
 
Americans have other options, like going into management/communications/law/politics/etc.
If an American is good in technology/science, he/she can be an innovator (like Steve Jobs, Mark Zuckerberg, Bill Gates, etc.).
For an American, an entrance into Finance, could be many ways - like through MBA (Finance, Accounting, etc.), relationships, etc. For a foreigner, pretty much, the only way is through math/programming.

err...people from other countries have other options, too, you know. and i know a lot of international MBAs, accounting students, etc.
 
In my humble opinion, quick rich and social status are two important reasons that a lot of student from Asia want to pursue this degree. In an emerging countries, there is a significant wealth gap and you tend to see thousands of people live in 10 mill house, have a rolls royce and a super car, while million people live with less than $2 a day. That creates an economic inequality and people usually judge you solely based on how much money you have. Getting rich quickly is a goal of many people, especially students.

Secondly, getting a prestige job (with a high salary) helps you not "lose face" with your friends, your relative and kids of your parents' friends. You definitely dont want to be behind anyone at your age financially. So your choice is getting a prestige job in a reputed firm so that you will have much $$$ and make your parents feel proud of you. In addition, last tens years, financial market in those emerging countries growing sharply so finance is a super hot field. Therefore, there are more and more students from China and India pursuing MFE and hope that they will land an offer from elite firms for position such as trader. In China, if you meet some one at your age and you tell them you are a trader at GS with a master degree in financial engineering and earning $150k, it is damn cool!!!!
 
In China, if you meet some one at your age and you tell them you are a trader at GS with a master degree in financial engineering and earning $150k, it is damn cool!!!!

It would be cool in most parts of the world...
 
Adding to what others have pointed out:

- There is a lack of quality Financial Engineering faculty and programs in Asia. That's true for many fields atMasters and PhD level education.
- The reason more people go for technology-based ones is for that better return upon graduation. Not too many people from Asia are going to shell out huge amounts of money to do arts or law degrees that may make it difficult to land a well-paying job later. It's important to recognize this because the Asian->Engineering stereotype ought to be dispelled.
- While many (including myself) would like to settle out in a developed country, having such a degree also makes a huge difference in your competitiveness if you're looking to come back. And, there are some excellent jobs in India (maybe not so much in FE yet) where you can get pretty decent salaries.
 
It would be cool in most parts of the world...
Yeah its true but especially in countries where most people solely judge you on the car you drive, the house you live, the money you make, it is something different.
 
What inefficiency are you exploiting?

From what I know, there's isn't an abundance of American MFE graduates. I've heard that if your good and if you have excellent communications skills, you've got an edge on a lot of the other graduates from MFE programs. Not to mention that a lot of government regulations keep international MFEs out of U.S. banks, which seems crazy.

So yeah... I'm an American extrovert with an introvert capacity. That's how I'll exploit what I'm calling an inefficiency.
 
Americans have other options, like going into management/communications/law/politics/etc.
If an American is good in technology/science, he/she can be an innovator (like Steve Jobs, Mark Zuckerberg, Bill Gates, etc.).
For an American, an entrance into Finance, could be many ways - like through MBA (Finance, Accounting, etc.), relationships, etc. For a foreigner, pretty much, the only way is through math/programming.
I have heard that many American parents saying that they don't want their children go into technology / science (even if they are good at it), because of the fierce global competition - this is totally understandable.

My angle is way different than yours. Only the greatest and most technical minds have made it big in finance or any technical field. I think an MBA will serve you with nothing if your looking to break onto the street (unless you're Ivy). And as far as the other options you mentioned like communications & politics..... Don't you know this is a site for geeks? We make fun of some of the majors you listed for having no discernible skills! And anyone who doesn't see math, physics or programming as valuable needs to step back and realize what they're saying. That's heresy to the nth degree in my opinion!
 
Americans have other options, like going into management/communications/law/politics/etc.
If an American is good in technology/science, he/she can be an innovator (like Steve Jobs, Mark Zuckerberg, Bill Gates, etc.).
For an American, an entrance into Finance, could be many ways - like through MBA (Finance, Accounting, etc.), relationships, etc. For a foreigner, pretty much, the only way is through math/programming.
I have heard that many American parents saying that they don't want their children go into technology / science (even if they are good at it), because of the fierce global competition - this is totally understandable.
ultra LOL!
 
I think the bottom line must be this:

If you look at universities from all over the world that teach finance, the best ones are in the USA. When students look for a graduate degree they look all over the world and are therefor most likely to see a lot of quality degrees in the USA, and that the best schools are there. You could therefor assume that the US schools don't only attract local, but also global students.
Now seeing that the USA is only a fraction of the worlds populations, the applicants are therefor more likely to be international.
 
My angle is way different than yours. Only the greatest and most technical minds have made it big in finance or any technical field. I think an MBA will serve you with nothing if your looking to break onto the street (unless you're Ivy). And as far as the other options you mentioned like communications & politics..... Don't you know this is a site for geeks? We make fun of some of the majors you listed for having no discernible skills! And anyone who doesn't see math, physics or programming as valuable needs to step back and realize what they're saying. That's heresy to the nth degree in my opinion!

All I'm saying is that...
If an American is that good in science / technology and does not care about money - most likely, he/she would go into research / universities, etc. (I have a friend who has a PhD a physics, and turned down many request to go to Wall Street for programming/quant - and actually makes much less at a university.)
If an American is that good, and cares about the money, there are other options, where he/she can make much more money, than 150,000 - 200,000 / year. (If you happen to live in Manhattan, you would need millions to have a decent apartment for the family, private school for the kids, etc.)

Math/programming/science are extremely important, and before, I was just like you, and most people here - I thought all the other majors (management, communications, etc.) are joke - but when you see that a manager who knows not even half of what you know, and makes twice, or 3 times more - it is not a joke anymore.
I think there is no shortage of qualified American people in science / technology, and if the situation continues the way it is going now (and it will continue) - outsourcing, "insourcing", this would scare away some talented Americans from science / technology (which is a shame).
 
Math/programming/science are extremely important, and before, I was just like you, and most people here - I thought all the other majors (management, communications, etc.) are joke - but when you see that a manager who knows not even half of what you know, and makes twice, or 3 times more - it is not a joke anymore.

These well-paid managers with generic degrees in management and communications are a relic from another era (an era when you could come out of U with degrees like this and get taken on as a management trainee). Their numbers are declining. And once they lose their jobs (because of outsourcing, "rationalisation," "right-sizing," merger, mass redundancy or bankruptcy) can either not find similar jobs or have to take big pay cuts. There is a reserve army of unemployed managers and executives out there with graduate degrees in management and communications. The ones surviving in jobs know how precarious their existence is. Given a choice, an engineering or comp sci degree is still a better bet.

Furthermore, for these jobs (to the modest extent that openings still turn up), you have to be a particular kind of person even to be interviewed. An Indian or a Chinese with a pronounced accent and not au fait with US customs is more likely to be taken on for a techie role than for these kinds of general managerial roles.
 
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