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This study aims to examine the potentially important effects of academic embeddedness on college of business student retention and performance as well as the mediating effects of self-efficacy on the academic embeddedness student outcomes relationships. Improvements in student retention and performance reduce costs for students and universities and lead to higher incomes for graduates.

Data were gathered from students in an entry-level business course at a public university in a rural western state. Approximately 45% of the students were female, and the average age of participants was 20 years old. A survey was administered midsemester to gather data on academic embeddedness and self-efficacy. Retention was indicated by a student enrolling in a business course in a subsequent semester. Performance was measured using end-of-semester course grades. Logistic and linear regression as well as mediation analysis were used to test the hypotheses.

Academic embeddedness was found to positively predict both retention and performance, while self-efficacy was found to positively mediate the academic embeddedness retention relationship. The direct effect of embeddedness on performance was not found when controlling for self-efficacy.

Student retention and performance are important to both students and academic administrators. The findings of this study suggest that retention and performance can both be improved by focusing on factors that more strongly embed students to their colleges.

Embeddedness has been found to have high predictive validity in the employment context. This is one of the first studies to consider the effects of embeddedness in the academic context.