Business Research

Methods
Zangina Isshaq, PhD
Department of Finance
School of Business
College of Humanities and Legal Studies
University of Cape Coast

November 3, 2017
Course in brief

Statistics, Specialization courses, experience

Philosophy
The of
Inferential Data science
Statis-
analysis scientific
tics Method
Research
value
Quantitative

Qualitative
Research
Methods

Research Formulating New

Design Ques- ideas
tions

Approaches Importance
 1. Business
Research Overview
What is research?

Research
“Something that people undertake in order to
find out things in a systematic way, thereby
increasing their knowledge.”

Saunders et al, 2013, pp.5

Research

▶ Systematic:“ research is based on logical

relationships and not just beliefs”
▶ Find out things: means “research has
multiple purposes”
Business Research

Business research for decision makers is to

contribute to business intelligence in the
following areas
▶ the organization
▶ the market
▶ the economy
▶ new technology
▶ new line of business
▶ design of tactics
Business research

Business research applies the scientific

method to ascertain truth about business
decisions
▶ Basic research— attempts to expand

the limits of knowledge

▶ Applied research— e.g. developing new

products, processes, from basic

knowledge
Basic vs. Applied
SCIENTIFIC RESEARCH
What is science?

Definition
Science refers to a systematic and organized
body of knowledge in any area of inquiry
that is acquired using the “the scientific
method”. (pp1. Bhattacherjee)
The sciences

▶ Natural sciences
Physical sciences
Earth sciences
Life sciences
▶ Social sciences
Psychology
Sociology
Economics
RESEARCH PROCESS
Research process

1 Clarifying research questions

2 Research proposal
3 Research design strategy
Sampling and data collection design
Instrument development and testing
4 Data analysis and interpretation
5 Research reporting
 SCIENTIFIC
KNOWLEDGE
Scientific Knowledge

Scientific Knowledge
“Generalized body of laws and theories to
explain a phenomenon or behaviour of
interest that are acquired using the scientific
method.”
Scientific Research

▶ Purpose — to discover laws and offer

explanations for social or natural
phenomenon.
▶ Two aspects of scientific research:
Logic — theory
Evidence — observations
Scientific Research Process
THE SCIENTIFIC
METHOD
The Scientific Method

▶ Main qualities
Replicability
Precision
Falsifiability
Parsimony –“Occam’s razor”
Types of Scientific Research

▶ Exploratory
▶ Descriptive
▶ Explanatory
RESEARCH SKILL SET
Research Skill Set

▶ Methodological skills
Mastery of data analysis tools such as
statistical software, sampling techniques,
research design
Design of measurement instruments,
▶ Theoretical skills — domain of
influential scholars
Ability to explain complex phenomenon
Deep insight into complex phenomenon
and interpretation of facts
Thinking like a researcher

What researchers think about

▶ Unit of analysis — what is being studied

▶ Concepts, constructs, variables

(operationalization) →e.g. weight,

organizational commitment, exchange
rate
▶ Propositions and hypotheses

▶ Variables
Thinking like a researcher

▶ Concepts: a higher level of abstraction

e.g. development
▶ construct: abstraction chosen to
explain a phenomenon—
uni-dimensional or multi-dimensional
Variables

Definition
A variable is a measurable representation of
an abstract construct
Variables can be

▶ independent— used to explain other

variables
▶ dependent— explained by other
variables
▶ moderating— influence the
relationship between dependent and
independent variables
An example
Propositions and Hypotheses

Proposition
Proposition is “a tentative and conjectural
relationship between constructs that is stated
in a declarative form”. Hypothesis is
“empirical formulation of propositions, stated
as relationships between variables”.
Theories and models

Theories
Theory is “a set of systematically interrelated
constructs and propositions intended to
explain and predict a phenomenon or
behaviour of interest, within certain
boundary conditions and assumptions.”
Model
Model is a representation of all or part of a
system that is constructed to study that
Research Process
 HISTORY OF
SCIENTIFIC METHOD
Some History

▶ The Greeks and philosophy — logics,

ethics, aesthetics, metaphysics.
▶ Advent of systematic logic —
Rationalism
▶ Aristotle work Metaphysics separates
theology from ontology — study of
being and existence. And universal
science
More history

▶ Francis Bacon and Empiricism —

knowledge acquisition through empirical
activity.
▶ Bacon is the source of the “Scientific
method”
▶ Galileo and Newton fused theory and
empiricism to form the foundation of
natural sciences.
▶ Increased the role of mathematics in
More history

▶ Kant work Critique of Pure Reason—

experience is subjective and can lead to
theoretical errors
▶ Auguste Comte, the founder of
sociology, combined Rationalism and
empiricism to propound positivism.
This inspired quantitative social
research methods
History continued

▶ Antipositivism inspired the use of

unstructured interviews and participant
observation— more interpretative
approach
▶ Karl Popper — “human knowledge is
based on a set of tentative conjectures
that can never be proven conclusively
but not unchallengeable, rock solid
foundations”
More history

▶ Postpositivism or postempiricism
— it is easy to reject false beliefs but
difficult to verify truth
▶ Karl Marx and Friedrich Engels criticism
— antipositivists only try to
“understand society but not critiquing or
changing society for the better”
ETHICS IN RESEARCH
Ethics in Research

▶ Scientists are humans and sometimes

other persuasions cloud the application
of the scientific method
Merck Vioxx troubles

A classic example is pharmaceutical giant

Merck’s drug trials of Vioxx, where the
company hid the fatal side-effects of the
drug from the scientific community, resulting
in 3468 deaths of Vioxx recipients, mostly
from cardiac arrest. In 2010, the company
agreed to a $4.85 billion settlement and
appointed two independent committees and
a chief medical officer to monitor the safety
Ethical principles

▶ Voluntary participation and

harmlessness →subjects should
participate willingly without coercion
▶ Anonymity and confidentiality
▶ Disclosure of conflicts of interests
▶ Analysis and reporting →do NOT
massage statistics
Ethical codes

▶ Core principles: do not engage in

Plagiarism: using other peoples
sentences and turns of phrases as if
there were your own.
Fabrication or falsification of data,
procedures or analysis
Other behavioural principles

▶ Respect the rights of subjects

▶ Disclose conflicts of interest that might
interfere with objectivity
▶ Do not make misrepresentations to
editors— adding ghost authors
2. Research Process
and Proposal
Development
Who gives topics?

Figure: Source: SGS Handbook

Bearing in mind the requirements for your
degree award, a project may have
▶ collect your own data

▶ use data already collected

▶ organisation-based applied research

Good research Attributes

Consider
▶ Feasibility— can you do it?

Skills required
Interest in the topic
Time and financial resources
access to the ideal data
▶ Clearly defined research questions and
objectives
▶ The value of potential outcome
▶ Career goals
 GENERATING
RESEARCH IDEAS
Rational Thinking approach

1 Examine your own strengths and

interests
2 Look at past project titles
3 Discuss initial ideas with peers your
advisor
4 Search the literature to refine
5 Scan the media for topical issues for
research
Creative Thinking Approach

▶ Keep a notebook of ideas from

experiences
▶ Explore personal preferences from past
projects
▶ Use relevance trees to explore topics
▶ Brainstorm with peers or others
Refining Research Ideas

▶ Delphi technique
▶ preliminary study
understanding your unit of analysis
shadow the key informants
▶ integrating ideas— clarify the field, area
in the subject
From ideas to projects

A research question should not be:

▶ too easy → lacks value or reinventing

the wheel
▶ too difficult → low answerability or

inadequate answer may be provided

▶ Research questions should

generate new insights

Questions and objectives

▶ Research objectives defines the goal to

be achieved:
Stated in a definite and measurable way:
“To estimate the effect board size on
efficiency”
▶ Research questions are the issues that
an objective embodies.
Research ideas and questions

Idea Advertising and share prices

Question How does the running of a TV
advertising campaign designed to
boost the image of a company
affect its share price?
Idea Job recruitment via the Internet
Question How effective is recruiting for new
staff via the Internet in comparison
with traditional methods?
Research Ideas and Questions

Idea The use of aromas as a marketing

device
Question In what ways does the use of
specific aromas in supermarkets
affect buyer behaviour?
Idea The use of Internet banking
Question What effect has the growth of
Internet banking had upon the uses
customers make of branch
Questions and Objectives

Question Why have organisations introduced

team briefing?
Objective To identify organisations’
objectives for team briefing
schemes
Question How can the effectiveness of team
briefing schemes be measured?
Objective To establish suitable effectiveness
criteria for team briefing schemes.
Questions and Objectives

Question Has team briefing been effective?

Objective To describe the extent to which
the effectiveness criteria for team
briefing have been met.
Question How can the effectiveness of team
briefing be explained?
Objective To determine the factors
associated with the effectiveness
criteria for team briefing being met
STATING YOUR TOPIC
The topic Statement

A good topic statement should

▶ avoid nominals verbs: examining,

assessing, ascertaining, …
▶ avoid adverbs: effective, efficient,

proper, …
▶ be keep it short as you reasonably can

▶ not use “A case study” if it is not case

study
▶ highlight you main objective
The good and the bad

Bad “The effects exchange rate, interest

rates, and monetary policy rate
have on stock prices in Ghana”
The good and the bad

Bad “The effects exchange rate, interest

rates, and monetary policy rate
have on stock prices in Ghana”
Good Exchange rate, interest rates,
monetary policy rate and stock
prices in Ghana
The good and the bad

Bad “The effects exchange rate, interest

rates, and monetary policy rate
have on stock prices in Ghana”
Good Exchange rate, interest rates,
monetary policy rate and stock
prices in Ghana
The good and bad

Bad “The fight against money

laundering, the role of law
enforcement agencies: a case study
of EOCO”
The good and bad

Bad “The fight against money

laundering, the role of law
enforcement agencies: a case study
of EOCO”
Good EOCO and the fight against money
laundering
The good and bad

Bad “The fight against money

laundering, the role of law
enforcement agencies: a case study
of EOCO”
Good EOCO and the fight against money
laundering
The good vs the bad

Bad “Using management information

systems in justice delivery by the
judicial service of the republic of
Ghana, a case study in the central
region of the republic of Ghana”
The good vs the bad

Bad “Using management information

systems in justice delivery by the
judicial service of the republic of
Ghana, a case study in the central
region of the republic of Ghana”
Good Management information systems
and justice delivery in the Central
Region
The good vs the bad

Bad “Using management information

systems in justice delivery by the
judicial service of the republic of
Ghana, a case study in the central
region of the republic of Ghana”
Good Management information systems
and justice delivery in the Central
Region
The good vs the bad

Bad Effects of forensic accounting and

fraud examination on fraud
detection and prevention: A survey
of selected multinational companies
in Ghana
The good vs the bad

Bad Effects of forensic accounting and

fraud examination on fraud
detection and prevention: A survey
of selected multinational companies
in Ghana
Good Fraud detection and prevention
strategies at some multinational
companies in Ghana
Research proposal Structure

1 Title — mostly tentative until the final

draft is written
2 Background — provides motivation for
the research
3 Research questions and objectives
4 Research design or methods
5 Timescale
6 Resources
7 References
3. Literature Review
REVIEWING THE
LITERATURE
Literature review: purpose

▶ to help you to refine further your

research question (s) and objectives;
▶ to highlight research possibilities that
have been overlooked implicitly in
research to date
▶ to discover explicit recommendations for
further research.
Literature review:purpose

▶ to help you to avoid simply repeating

work that has been done already;
▶ to sample current opinions in
newspapers, professional and trade
journals to gain insights on your
research’s newsworthiness
▶ to discover and provide an insight into
research approaches, strategies and
techniques appropriate to your research
Literature review: the process

Figure: Source: Saunders et al, 2011

Reading critically

Do the following, Harvard College Library,

advice
▶ previewing the text

▶ annotating

▶ summarizing

▶ comparing and contrasting

Critical reading

Wallace and Wray (2006)

The capacity to evaluate what you read and
the capacity to relate what you read to other
information
Critical literature review

▶ Wallace and Wray steps for critical

reading
Why am I reading this?
What is the author trying to do in
writing this?
What is the writer saying that is
relevant to what I want to find out?
How convincing is what the author is
saying?
What use can I make of the reading?
Contents of a critical review

Your literature review should

▶ include the key academic theories within

your chosen area of research

▶ demonstrate that your knowledge of

your chosen area is up to date

▶ enable those reading your project report

to find the original publications which

you cite
Structuring literature review

General rule to observe in structuring your

literature review chapter is to create sections
around your Research questions and
objectives
▶ For each objective ask

What is the theory?

What is the evidence on the theory?
How does the evidence compare?
What is your stand?
Structuring a literature review

▶ start at a more general level before

narrowing down to your specific
research question and objectives
▶ provide a brief overview of key ideas and
themes
▶ summarise, compare and contrast the
research of the key writers;
▶ highlight previous research work most
relevant to your research
Structuring literature review

▶ provide a detailed account of the

findings of this research and show how
they are related
▶ highlight those aspects where your own
research will provide fresh insights
▶ lead the reader into subsequent sections
of your project report, which explore
these issues.
A literature paragraph
LITERATURE SOURCES
Literature Sources

▶ Journals
▶ Books
▶ Newspapers
▶ Reports
▶ Theses
▶ Conference proceedings
Searching for literature

▶ Acquaint yourself with the relevant

databases
Emerald Insight
EBSCOHost
www.scholar.google.com
Many others offered by the library
▶ A little bit of boolean logic for effective
searching
▶ understand AND, OR, XOR as used
in search engines
Google search tricks

We are using “retirement planning” as an

example
▶ What you type into the search bar is a

called a a search string

▶ Type retirement planning, then

retirement planning is your search

string.
▶ This would bring up all links with the

two words in it.

Google search tricks

▶ Use plus (+) and minus (−) to filter

the search results
▶ E.g. retirement planning +Ghana

will show links on retirement planning

and also have Ghana mentioned in them
▶ And retirement planning +Ghana

-pensioners will exclude links with

pensioners mentioned.
THEORETICAL AND
CONCEPTUAL
FRAMEWORK
Theory

Theory
“A formulation regarding the cause and effect
relationships between two or more variables,
which may or may not have been tested” Gill
& Johnson (1995)
Theory …

Theory
Sutton and Staw (1995:375) sum up by stating that “theory is
about the connections between phenomena, a story about why
events, structure and thoughts occur. Theory emphasises the
nature of causal relationships, identifying what comes first as
well as the timing of events. Strong theory, in our view, delves
into underlying processes so as to understand the systematic
reasons for a particular occurrence or non-occurrence”.
What theory is not

▶ References you cite

▶ Data
▶ List of variable
▶ Diagrams
▶ Hypothesis or predictions
Building blocks of theory

▶ Constructs: what— concepts specified

to explain a given phenomenon; leads to
variables
▶ Propositions: how— postulated
associations between constructs by
detailing the mechanism in operation;
leads to Hypotheses
Building blocks of theory

▶ Logic: why— the rationale for

propositions
▶ Assumptions or boundary conditions—
circumstances and conditions under
which concepts work
Attributes of a good theory

A good theory has

▶ logical consistency

▶ falsifiability

▶ strong explanatory power

▶ is parsimonious

Parsimony: “how much of phenomenon is

explained by a few variables”
Approach to theory building

▶ Build from observed facts

▶ bottom-up conceptual analysis
▶ extend or modify existing theories
▶ apply existing theories in new contexts
by drawing on similarities
Example: Agency theory

▶ Originally proposed by Ross (1973) to

explain two-party relationships whose
goals are not congruent with each other.
▶ The goal of agency theory is to specify
optimal contracts and the conditions
under which such contracts may help
minimize the effect of goal
incongruence.
Agency theory

The core assumptions of this theory are that

▶ human beings are self-interested

individuals
▶ boundedly rational

▶ risk-averse

The theory can be applied at the individual

or organizational level.
Defining variables

This is called operationalization

▶ Designing precise measurements for

constructs
▶ proceeds as follows:

Start with an operational definition

Find existing pre-validated measures
from the literature
If the above fails, continue on design
scale item (more on this later under
measurements and scales)
4. Research Design
RESEARCH WORLD
VIEW
Research design choices

Depends on Your Research philosophy and

the purposes of your research.
Research design choices

Depends on Your Research philosophy and

the purposes of your research.
Research philosophy
Assumptions about how the world works.
Research onion

Figure: Source: Saunders et al., 2008

Research philosophies

▶ Positivism
▶ Realism
▶ Interpretivism
▶ Pragmatism
Pragmatism

▶ The key determinant of your world view,

and methods is the question you want
to answer
▶ The use of mixed methods is a
manifestation of this philosophy
▶ Sometimes the researcher interacts with
what is studied, or stand apart from it
▶ Emphasize positive consequences to
your value system (Tashakkori and
Ontology

Ontology is opposite of pragmatism: what is

the nature of reality? That is, what is true
and what is real. It has two parts:
▶ Objectivism
▶ Subjectivism
Ontology

▶ Objectivism: social entities exist in

reality external to social actors
concerned with their existence
▶ Subjectivism: social phenomena are
created from the perceptions and
consequent actions of those social
actors concerned with their existence
Ontology

Think about organizational culture:

objectivist It is a variable that can be
isolated, studied and manipulated.
subjectivist It is continually created and
re-created through social
interactions and physical factors
Epistemology

▶ “What is acceptable knowledge in a

field of study?”
▶ Should it be quantifiable, measurable
objects?
▶ Should it be meanings, feelings of study
objects, which may not be observable or
manipulable?
Epistemology

▶ Positivism: adopts natural scientist view

to social reality.
Seeks “law-like generalizations” like
physicists
Research is a value-free activity
Realism

Realism: “what the senses show us as reality

is the truth”, i.e. “objects have an existence
independent of the human mind” (Saunders
et al, 2008, pp114)
▶ Direct realism: “our senses portray the

world accurately”
▶ critical realism: what we experience are

assertions
Realism and mgt research

▶ Researchers can understand what is

going when they understand the social
structures that give rise to a phenomena
▶ Direct realist believe business operates
at individual or org level
▶ Critical realist prefers multi-level study
and sees business as dynamic
Interpretivism

▶ it is necessary to understand differences

in humans as social actors rather than
objects as it is in physics
▶ Humans continual interpret our social
roles
▶ We interpret sounds, actions of others
around us
▶ Researcher has to adopt an empathetic
stance
Axiology

Axiology
Refers to judgments about value. In research
context, it is about the how your values
affects choices in the research process.
Values are the guiding principles of human
actions.
Research paradigm

Definition
“Paradigm is a term frequently used in the
social sciences, but one which can lead to
confusion because it tends to have multiple
meanings.”

Saunders et al, 2010

Research paradigms
Research approaches

▶ Deductive: testing theories

Deduce hypotheses from theory,
measure variables, operationalize test,
examine specific outcomes
Uses highly structured methodology
▶ Inductive: builds theory
Deductive-Inductive
RESEARCH PURPOSE
AGAIN
A reminder

Purpose of research:
▶ Exploratory:

Finding out “what is happening”

to seek new insights’
to ask questions and to assess
phenomena in a new light (Robson,
2002,pp59)
▶ Used to clarify understanding of a
problem
Doing an exploratory study

▶ Exploratory studies are flexible as new

information is used to direct the course
of study
▶ It is typically conducted in the following
ways
A search of the literature
interviewing ‘experts’ in the subject
conducting focus group interviews
Descriptive studies

▶ ‘to portray an accurate profile of

persons, events or situations’
▶ can be an extension of an exploratory
research
▶ not usually favoured for student projects
▶ Descriptive studies would usually not be
an end in itself
Explanatory studies

▶ Meant to establish causal relationships

▶ in finance/accounting research we
normally settle for association instead
of causality
▶ it is a higher-order skill to conduct than
descriptive or exploratory studies
▶ To answer why customers default is
more difficult than to describe how
default occurs
RESEARCH DESIGNS
Popular Research Designs

▶ Experimental studies — uses controlled

settings to test cause and effect
relationships
assign subjects to treatment and
control groups
if assignment is random →true
experimental design
if assignment is not random
→quasi-experimental design
▶ It has strong internal validity
Field surveys

▶ it is non-experimental design that does

not control treatments
▶ measures variables and tests their
effects using statistical testing
▶ cross-sectional field surveys
measures both the dependent and the
independent variables at the same time
▶ longitudinal field surveys are
conducted over time
Secondary data analysis

▶ Analysis of previously collected data

▶ Advantage:
3 Researcher does not have collect
the data (sometimes expensive)
▶ Disadvantage
7 data might not have been collected
in a scientific manner
Case Research

Case Research
Case research is an in-depth investigation of
a problem in one or more real-life settings
(case sites) over an extended period of time.

▶ data is collected with a combination of

methods
▶ Demerits include inability to control
events, which weakens internal validity
Focus group research

Focus group research

Focus group research is a type of research
that involves bringing in a small group of
subjects (typically 6 to 10 people) at one
location, and having them discuss a
phenomenon of interest for a period of 1.5 to
2 hours. The discussion is moderated and led
by a trained facilitator.
More suited for exploratory research
Action research

Action research
Action research assumes that complex social
phenomena are best understood by
introducing interventions or ‘actions’ into
those phenomena and observing the effects
of those actions.
Action research

▶ The researcher is either a consultant or

member of the organization
▶ choice of actions should be based on
theory
▶ It is suitable for problems that cannot
be replicated outside its context
▶ Examples include social interventions
Ethnography

Ethnograpy
Ethnography is an interpretive research design inspired by
anthropology that emphasizes that research phenomenon must
be studied within the context of its culture. The researcher is
deeply immersed in a certain culture over an extended period
of time (8 months to 2 years), and during that period, engages,
observes, and records the daily life of the studied culture, and
theorizes about the evolution and behaviors in that culture.
ETHICS IN RESEARCH
DESIGN
Ethics in Research Design

▶ very important when dealing with

human subjects
▶ Your design should not embarrass
subjects in a way
▶ confidentiality matters
▶ In some place you’d need ethical
clearance to conduct studies involving
humans and animals
Ethics along the way
RESEARCH DESIGN
QUALITY
Research Design Quality

The quality or validity of a research’s results

is assessed on four attributes
▶ Internal validity

▶ Construct validity

▶ External validity

▶ Statistical validity
Internal validity

Internal validity or causal validity—

seeks to answer one question: does the
independent variables really cause changes in
the dependent variable?
Threats to internal validity

▶ history— did you address confounding

events? E.g. testing organizational
commitment following break-down in
collective bargaining
▶ testing— perceptions of respondents of
answer the researcher wants
▶ instrumentation
▶ mortality— survivorship bias
▶ ambiguity about causal direction
External validity

▶ External validity:— can we

generalizable sample observations to the
population? Or other contexts and
time?
▶ Or extent to which data collection and
analysis leads to a consistent result
Threats to external validity

▶ Subject or participant error

▶ Subject or participant bias
▶ observer error
▶ observer bias
Construct, Statistical validity

▶ Construct validity:— does a

measurement scale (variable) measure
the theoretical construct?
Construct, Statistical validity

▶ Construct validity:— does a

measurement scale (variable) measure
the theoretical construct?
▶ Statistical validity:→how valid are
the statistical procedures used in
making inference?
Does data meet assumptions of
statistical procedure?
Other Credibility matters

▶ Logical leaps and false assumptions in

analysis
▶ Errors in identification of research
population
▶ Errors in data collection
▶ Erroneous interpretation
▶ Errors in development of conclusion
Validity trade-off?

Figure: Source: Bhattacherjee,2012

Improving Validity

The best research designs

would guard against spurious correlations,
inspire greater faith in the hypotheses
testing, and ensure that the results drawn
from a small sample are generalizable to the
population at large.
Improving internal validity

Proper controls are required in research

design to give assurance on internal validity
(causality) reported in a research.
Improving internal validity

▶ manipulation— use distinguishable

treatments
▶ elimination— eliminate extraneous
variables by holding them constant
▶ inclusion— include extraneous variables
and measure their effect,
▶ statistical control— extraneous
variables are measured and used as
covariates (control variables)
SAMPLING
Sampling: the why?

▶ it would be impracticable for you to

survey the entire population
▶ your time constraints prevent you from
surveying the entire population
▶ you have collected all the data but need
the results quickly.
Sampling Techniques

▶ Probability Sampling: each element of

the population has equal chance of
being selected for the study
▶ Non-probability sampling: it is also
called judgemental sampling
How much to sample

▶ Sample size should be informed by:

the confidence you need to have in your
data
the margin of error that you can tolerate
the types of analyses you are going to
undertake
the size of the total population from
which your sample is being drawn
Simple Random Sampling

▶ Number each of the cases in your

sampling frame with a unique number.
▶ Select cases using random numbers
until your actual sample size is reached.
Systematic sampling

▶ Number each of the cases in your

sampling frame with a unique number.
▶ Select the first case using a random
number.
▶ Calculate the sampling fraction.
▶ Select subsequent cases systematically
using the sampling fraction to
determine the frequency of selection.
Stratified random sampling

▶ Choose the stratification variable or

variables.
▶ Divide the sampling frame into the
discrete strata.
▶ Number each of the cases within each
stratum with a unique number, as
discussed earlier.
▶ Select your sample using either simple
random or systematic sampling.
DATA TYPES AND DATA
COLLECTION
Data types

▶ Secondary data: analysing data that is

already collected
▶ Primary data: collecting new data that
was not previously there
Using secondary data

▶ This is the main staple data for most

finance research
documentary data: archival
survey-based secondary data: especially
government surveys
multi-stage secondary data: e.g. cohort
studies
▶ Measurement validity
▶ coverage and unmeasured variables
▶ measurement bias
Collecting Primary data

Figure: Source: Saunders et al, 2010

Types of questionnaire

▶ self-administered
▶ interviewer-administered
▶ choice depends on:
characteristics of the respondents from
whom you wish to collect data
importance of reaching a particular
person as respondent
importance of respondents’ answers not
being contaminated or distorted;
size of sample you require for your
analysis, taking into account the likely
response rate
Variables in questionnaires

Questionnaires can be used to measure

qualitative variables such as
▶ opinion

▶ behaviour

▶ attribute
Types of questions

▶ open
▶ list
▶ category
▶ ranking
▶ ratings
agreement
likelihood
amount
frequency
Deciding what data to collect

▶ before designing your Questionnaire

bear in mind
what are your dependent variables?
what are your independent variables?
what variables are extraneous?
▶ Should be informed by your research
questions and a review of the literature
Collecting essential data

▶ Steps to data collection decision

1 Decide whether the main outcome of
your research is descriptive or
explanatory
2 Sub-divide each research question or
objective into more specific investigative
questions about which you need to
gather data.
3 Repeat the second stage if you feel that
the investigative questions are not
sufficiently precise.
4 Identify the variables about which you
ASSESSING DATA
REQUIREMENTS
Data requirements
MEASUREMENT OF
CONSTRUCTS
Conceptualization

Before we can we measure a constructs, we

need to conceptualize it. i.e.
Conceptualization
is the mental process by which fuzzy and
imprecise constructs (concepts) and their
constituent components are defined in
concrete and precise terms.
Conceptualization

▶ social constructs are mostly vague and

imprecise, but to test proposition we
need meaningfully measure them
▶ is “compassion” the same as
“empathy”? or “sentimentality”. Or
what is “prejudice”?
▶ In conceptualizing you need to know: is
the concept unidimensional or
multi-dimensional?
Variables

▶ A combination of indicators at the

empirical level gives as a variable
▶ each indicator may have a number of
attributes or levels, with each
attribute representing a value of
concept being measured
▶ E.g. sex has two attributes — male and
female.
▶ E.g. satisfaction may have attributes
 LEVELS OF
MEASUREMENT
Levels of Measurement

▶ Nominal →categorical scales

used to measure mutually exclusive
attributes: male or female, industry
type, etc.
▶ Ordinal →used to measure rank-ordered
data such as first, second, third …. Or
attributes such as “bad”, “good”,
“strongly satisfied”
Levels of measurement

▶ Interval → rank-ordered but with

equidistant from adjacent attributes.
E.g. salary ranges, age ranges
▶ Ratio → combines features of Ordinal,
norminal and interval and also has a
“true zero” point
the ratio of two points is has
meaningfully interpretation
e.g. age, sales, profitability, number of
employees
Statistical properties
RATING SCALES
Binary Scales
Likert Scale
Semantic Differential scale
Guttman Scale
SCALING
Scaling

▶ Scaling “scaling is a branch of

measurement that involves the
construction of measures by associating
qualitative judgments about
unobservable constructs with
quantitative, measurable metric units.”
▶ the outcome of scaling is an empirical
structure for measuring indicators or
items for a given construct
Scaling

Common scaling methods for unidimensional

scales:
▶ Thurstones equal-appearing scaling

method: experts are used to select

items that measure the defined
construct
▶ Likert’s summative scaling

▶ Guttman’s cumulative scaling

INDEXES AND
TYPOLOGIES
Indexes

Index
An index is a composite score derived from
aggregating measures of multiple constructs
(called components) using a set of rules and
formulas.
▶ An example in accounting/finance
research is the Gompers Corporate
Governance Index
▶ Or the consumer price index (CPI)
Typologies

▶ Creating categories of a measure

▶ In strategic management we have “Cash
cows”, “Dogs” and “Stars” by the
Boston Consulting Group
▶ In finance with big and small firms
portfolios
▶ grouping of political parties into:
conservatives and liberal
SCALE RELIABILITY
Scale Reliability

▶ Scale Reliability: the degree to which

the measure of a construct is consistent
or dependable
▶ Can be tested in the following ways
inter-rater reliability: correlation
between independent ratings
test-retest reliability: correlation ratings
by same respondents at different times
internal consistency reliability:
consistency between items in a
construct. Tested using the Cronbach’s
SCALE VALIDITY
Scale validity

This is the same as construct validity now

with more detail
▶ Content validity — how scale items

much relevant construct

▶ predictive validity: — ability to predict

future behaviour outcome

5. Data analysis
DATA TYPES
Data types

▶ Concepts and constructs are measured

in the following ways
Nominal →values are countable e.g.
number patients in hospital
Ordinal
Interval
Ratio
Categorical →values are
non-overlapping categories e.g. qualified
auditor and non-qualified auditor
PREPARING DATA FOR
ANALYSIS
Preparing data

▶ Preparation involves two stages:

Data coding
Data entry
▶ Issues related:
missing values
data transformations
QUALITATIVE ANALYSIS
Qualitative analysis

Entails
▶ analysis of qualitative data like text

data from interview transcripts

▶ does not depend on statistics to make

inference but rather the analytical and

integrative skill of the researcher
▶ “sense making” of a phenomenon rather

than prediction or explanation

Approach to Qualitative analysis

▶ Ground theory →“an inductive

technique of interpreting recorded data
about a social phenomenon to build
theories about that phenomenon” pp113
▶ Content analysis →“is the systematic
analysis of the content of a text (e.g.
who says what, to whom, why, and to
what extent and with what effect)”
▶ Hermeneutic analysis →“ is a special
Grounded Theory

Grounded theory is useful in analysis data

acquired through:
▶ participant observation

▶ in-depth interviews,

▶ focus groups,

▶ narrative of audio/video recordings

▶ secondary documents

▶ Grounded Theory is more interpretive

and relies on data to build theory
Grounded theory:coding phases

Open coding
▶ aim at identifying key ideas or concepts

hidden in text
▶ researcher tries to identify discrete

events, incidents, actions, perceptions

and interactions of relevance
▶ these are coded as core concepts of the

data
▶ similar concepts are grouped into
Grounded theory: coding phases

axial coding
▶ categories are organize into causal

relationships
▶ coding paradigms can differentiate
categories that are
conditions
actions/interactions
consequences
▶ conditions, actions/interactions lead to
theorizing
Grounded Theory: coding phases

Selective coding
▶ “involves identifying a central category

or a core variable and systematically

and logically relating this central
category to other categories”
▶ data is selective sampled to validate the

central category
Grounded theory

The code activities thus include

▶ comparing incidents/texts assigned to

each category (to validate the

category),
▶ integrating categories and their

properties,
▶ delimiting the theory (focusing on the

core concepts and ignoring less relevant

concepts), and
CONTENT ANALYSIS
Content analysis: process

1 Select a set of text to study

2 Define rules to break text into segments
or units of analysis. This is called
unitizing
3 construct concepts applicable to each
units
4 coded data is analyzed to determine
dominant theme and contexts
▶ Sentiment analysis is the simplest
HERMENEUTIC
ANALYSIS
Hermeneutic analysis

▶ Researcher tries to “interpret” the

subjective meaning of a given text
within its socio-historic context
▶ it is heavily interpretive analysis of
qualitative data
▶ assumes that written text reflects an
author’s experience in a social context
▶ derived from religious studies
▶ it is also applicable to verbal and
QUANTITATIVE
ANALYSIS
Quantitative Analysis

▶ Descriptive analysis
▶ Inferential Statistics
 PREPARING
QUANTITATIVE DATA
Data coding

▶ Coding is to convert data from survey

instruments into numeric data
▶ A Codebook should also be prepared.
Code book:
“is a comprehensive document containing
detailed description of each variable in a
research study, items or measures for that
variable, the format of each item (numeric,
text, etc.), the response scale for each item
(i.e., whether it is measured on a nominal,
ordinal, interval, or ratio scale; whether such
scale is a five-point, seven-point, or some
other type of scale), and how to code each
value into a numeric format. ”
DESCRIPTIVE
STATISTICS
Descriptive Statistics

▶ entails summaries of observations

▶ provides comparisons between groups
on the level of a variable
▶ often includes:
univariate analysis
cross-tabulations
▶ In general in does not include tests of
hypotheses
UNIVARIATE ANALYSIS
Univariate Analysis

▶ frequency distributions
▶ central tendency
mean
median
mode
▶ dispersion
range
standard deviation
v
u ∑n
u − µ)2
t i=1 (xi
σ= (2)
n−1
Bivariate analysis

How are variables related to each other?

▶ Correlation

correlation — strength of relation

between two-variables. It does not mean
causality
always check the statistical significance
of correlations
▶ Cross-tabulation — frequency table of a
combination of two or more nominal
variables
CHOOSING THE RIGHT
STATISTIC
Choosing the right Statistic

▶ Exploring relationships:
Correlation: test strength of relation
between variables
Partial correlation: does correlation
test with control for confounding factors
Multiple regression: predicting
changes in the dependent variable
accounting for a set of independent
variables
Factor analysis: a dimension reduction
exercise used to extract latent values
from a set of independent variables or
Exploring differences

▶ T-test: comparing mean score of two

groups on a continuous (ratio) variable
paired sample t-test: the same
sample observed at two different times.
Before and after test.
independent sample t-test: two
different groups
▶ One-way ANOVA
compares two a more groups on a
continuous variable
it is tells you significance of any
differences but not where the difference
Exploring differences

▶ Two-way ANOVA: test the effect of

two independent variable on one
dependent varaible
between groups
repeated measures: same group tested
at different times
▶ Multivariate ANOVA
▶ Analysis of Covariance
Choosing statistic

1 What questions do you want to address?

2 Find the questionnaire items and scales
that you will use to address these
questions.
3 Identify the nature of each of your
variables
4 Draw a diagram for each of your
research questions
5 Decide whether a parametric or a
INFERENTIAL
STATISTICS
Inferential statistics

▶ how likely is it that the relation observed

in the sample is true of the population?
▶ inferential statistics makes use of
probability to as hypotheses to accept
them or to reject them
▶ Key to inference:
significance level maximum of level of
risk that that a hypothesis is accepted in
error
sampling distributions the theoretical
distribution of an infinite number of
Generalized linear model

▶ Model the mathematical that can be

used to represent a data set
▶ the simplest GLM is the two-variable
linear model that examines the
relationship between a dependent and
independent variable
Effect cause
z}|{ z}|{
y = β0 + β1 x + |{z}
ϵ (3)
error
▶ this is commonly referred to as the OLS,
The GLM

▶ It is actually a family of models:

▶ When studying the effect of gender —
male or female — on earnings it is
analysis of variance, ANOVA
a dummy variable is added in typical
finance/accounting studies →that is the
variable is code 0 and 1
▶ if are controlling for the effect of
another variable we have analysis of
covariance, ANCOVA e.g.
controlling for working experience in the
More of the family

▶ when dealing with multiple outcome

variables it is multivariate ANOVA
or multivariate ANCOVA
▶ if we model the outcome in one
regression equation as a predictor in
another equation in an interrelated
system of regression equations, then we
have a very sophisticated type of
analysis called structural equation
Two-group comparison

▶ a test of whether the difference between

the means for two groups is statistical
significant
▶ the predictor variable is usually a
categorical variable and outcome is a
ratio (gender and employment income)
▶ it is also referred as one-way ANOVA
▶ the Students t− test is used
▶ hypothesis structure is:
Factorial designs

▶ in econometrics/finance/accounting
studies these called interactions models
▶ usually specified as:

y = β0 + β1x1 + β2x2 + β3x1x2 + ε (4)

▶ interpreting β1 and β2 depends on the

significance of β3
 A LOT MORE
QUANTITATIVE
DESIGNS
Quantitative designs

▶ Factorial analysis →used to extract

latent variable from a set of observed
measures (items)
▶ Discriminant analysis: used to
predict classifying into categories.
Dependent variable is usually a nominal
variable
E.g. predicting loan default
Quantitative designs, more

▶ logistic regression: the dependent

variable is binary (0 and 1) and the goal
is to estimate probability based on an
underlying logistic model
▶ Probit regression:
the dependent variable is binary
but it assumes a normal distribution
also predicts probability
Common in finance
▶ Time series analysis
DATA PRESENTATION
Data presentations:single

▶ Depends on the information you want

to convey:
To show specific values →frequency
tables
To show highest and lowest values
→bar chart or a histogram
To show a trend →line graph
To show proportions →pie chart
A histogram
Multiple variable comparisons

▶ To compare highest and lowest

→ Multiple bar chart
▶ To compare proportions
→ percentage component bar
chart
▶ To compare trends and conjunctions
→ multiple line graphs
▶ To show relationship between cases of
variables → scatter graph
Comparison plot
Trend plot
6. Research
reporting
Introduction

For details consult:

▶ Chapter 16 of Neuman (2011)

▶ Zikmund et al (2010)
THE WRITING PROCESS
Preparing to write

▶ Audience
▶ Style and tone
▶ Organizing thoughts
▶ Back to the library
Plagiarism
Writing practice

Suggestions for
▶ Pre-writing Rewriting
▶ Composing ▶ Mechanics—
Free-writing grammar,
▶ Rewriting syntax
Revising
▶ Usage— formal,
Editing
colloquial (to
Proofreading be avoided)
▶ Voice— passive
STRUCTURE OF THE
REPORT
Main Structure

When in doubt consult the

requirements given in the Graduate
School handbook
▶ Prefatory (Preliminary information)

Declaration
Acknowledgment
Dedication
Abstract
▶ Main body
▶ Appended material
Main body

▶ Introduction: provide motivation for the

research questions and objectives
▶ Literature review review, critique and
synthesis of recent studies closest the
questions in your research
▶ Methods
▶ Results and discussion
▶ Conclusions and recommendations
▶ Bibliography
Writing conclusions
Appended material

▶ Data collection instrument

▶ Other detailed statistical results
▶ Authorization material: ethical
clearance letter, data collection
instrument approval, etc
Methods of main research

▶ Research design
▶ Sampling design
▶ Data collection
▶ Data analysis methods
▶ Limitations: of design, data collection,
analysis methods
 PRESENTING
STATISTICAL RESULTS
Presenting results

▶ Text — follow the APA style provided

in the Graduate school guidelines
▶ Tables— limit decimal places to three
for coefficients, two for test statistics,
three for p-values, and use reasonable
formats for absolute numbers: millions,
or billions.
Do same for in text writing. Prefer
percentages to decimals where possible
for in-text writing
▶ Graphs: do not present graphs and
7. Preparing your
proposal
Research FAQs

1 What is the causal relation of interest?

2 What experiment could ideally be used
to capture the causal effect of interest?
3 What is your identification strategy?
4 What is your model of statistical
inference?
WHAT DO YOU
PROPOSE?
Really, what do you propose?

Research question/problem
A Research question that will enlighten us on
something new and important, Or solve a
problem we do not yet have a solution to.
WHAT IS IN A
PROPOSAL?
Yes, what is in a proposal?

▶ Identifying the problem, issue and

stating the question
▶ Defining your strategy to answer the
question, to solve the problem, to clarify
an issue
▶ Outlining the information required and
how you would acquire it, access it,
collect it, process it, …
▶ Outlining how you would know if
PROPOSAL DOCUMENT
STRUCTURE
Proposal structure

▶ Introduction
▶ Statement of research problem, research
questions, research objectives
▶ Method, research approach, research
design
▶ Significance
▶ Limitations and scope
The Introduction

▶ What is the problem?

▶ Lead us to the problem do not expect
us to figure it out
▶ Is it important? New?
▶ What is your motivation? Why are you
doing this?
▶ Do not tells long tales or read a long
literature review
More on Introduction

▶ Do not go writing:
More on Introduction

▶ Do not go writing:
Like so
“The whole world since Einstein days has
been grappling with the problem of quantum
mechanics and relativity”
▶ If a lay person should ask you what is
your research about?
▶ You should be able to answer with a
statement not a story
Statement of problem

▶ After the introduction no more

literature review
▶ State the problem, → the research
question
▶ Link it with the issues you discussed in
the introduction
Statement of problem

▶ After the introduction no more

literature review
▶ State the problem, → the research
question
▶ Link it with the issues you discussed in
the introduction
Like so:
“Now that I have showed that everybody
hates “dumsor”:, its disruption to business
Objectives and questions

▶ These two should be matched very

clearly
▶ they should Directly related to solving
the problem you identified
▶ Recommendations is NOT an objective
RESEARCH DESIGN
Methods, research design

How do yo plan to answer your research

questions?
▶ For each research question the means to

answer should be clear

▶ Use a table like this one:
Question Objective Method
How does Perform
intermittent To es- Granger-
power sup- timate causality
aggregate
KNOW YOUR UNIT OF
ANALYSIS
Unit of analysis

▶ Understand what exactly you are

studying
▶ What is your unit of analysis?
▶ This depends on the question you pose
▶ Do not present without reading about
your unit of analysis
First example

What is the unit of analysis

Challenges in land registration in the central
region of Ghana
Another one

What is the unit of analysis

Internal audit practices of XYZ Metropolitan
Assembly in the XXL Metropolis of the
Middlesborough Region of Ghana
Yet another one

What is the unit of analysis

An analysis of petroleum revenue
management in Ghana
Even more examples

What is the unit of analysis

Working capital management and its impact
on the profitability of micro finance firms.
And some more

What is the unit of analysis

Assessing the influence of microfinance on
rural livelihoods in Dombotha district, Ghana
SIGNIFICANCE
Significance

▶ Contribution does your research make?

▶ How will it enlighten us?
▶ What use can we make of the answers
your research will provide?
▶ Yes, who would use it and how will they
use?
LIMITATIONS AND
SCOPE
Limitations

▶ Limitations are the weaknesses in your

research design
▶ Limitation is not your time
▶ Limitation is not your lack of funds
▶ Limitation is that your ideal experiment
is not feasible
▶ Limitations are factors that despite your
best efforts could bias inferences you
make
More about Limitation

▶ For example, there is measurement error

in the productivity measure that you use
as your productivity variable
▶ Your data is not the ideal for the
statistical model (e.g. fewer
observations)
▶ Limitation is that you will be translating
your questionnaire and linguistic
nuances could bias the responses you
SCOPE
Scope

Scope
Literally, which parts of the elephant will you
be able to touch? Technically, what aspects
of the problem would you address? It is NOT
your study site, the years covered in the
study, nor the fact that you used one
company nor that you used a sample.
SOME TIDBITS
Some tips

▶ Search in www.scholar.google.com
▶ Get yourself EndNote to manage your
references
▶ Learn to search efficiently
▶ Learn boolean logic as used in web
search
▶ Understand logical AND, logical OR,
logical XOR, logical NOT
▶ www.ats.ucla.edu/stats has a host