LECTURE 1 RESEARCH METHODS WHAT IS RESEARCH?

How would you define research? Give examples of what has research brought to everyday life? Why research in business? . And how is it different from research in pure science?

LECTURE 1 RESEARCH METHODS WHY CARE?

What is the relevance of studying research methods? Research in business topics is not much different from practical problem solving The source of any valid research is the formulation of a problem Project/Dissertation is a training process to prepare students to handle a typical research or business problem
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LECTURE 1 RESEARCH METHODS SOME POTENTIAL AREAS OF RESEARCH

Financial Reporting Management Accounting Auditing Taxation Accounting Information Systems Accounting and Finance Education Corporate Governance

Behaviour of stock, bond, currency and derivative markets Corporate financing & restructuring Valuation of financial Instruments Efficiency and effectiveness of trading strategies

Financial Statement Analysis

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TYPES OF RESEARCH QUESTIONS 1

There are three basic types of questions that research projects can address: Descriptive: When a study is designed primarily to describe what is going on or what exists.
Public opinion polls that seek only to describe the proportion of people that hold various opinions are primarily descriptive in nature. For instance, if we want to find out what percent of the population know the components of a companys annual reports.

TYPES OF RESEARCH QUESTIONS 2

Relational: When a study is designed to look at the relationships between two or more variables. An opinion poll that compares what proportion of young and old people would prefer to receive a steady rate of dividends is essentially studying the relationship between age and preference for dividend payments. Hence, we can investigate the impact of shareholders age on dividend policies, what is commonly referred to as the clientele effect

TYPES OF RESEARCH QUESTIONS 3

Causal:When a study is designed to determine whether one or more variables causes or affects one or more outcome variables.
e.g if a new budgeting system was introduced in a company to improve managerial performance, one we would essentially be studying whether the budgeting system (cause) influenced positively on managerial performance (effect). These three types of research questions represent different levels of complexity, with the last one being the most difficult to achieve.
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MORE RESEARCH TERMINOLOGIES - TIME

Time is an important element of any research design and one the most fundamental distinctions in research are between cross-sectional and longitudinal studies.
A cross-sectional study is one that takes place at a single point in time. A longitudinal study is one that takes place over time -- we have at least two (and often more) waves of measurement in a longitudinal design.

TYPES OF RELATIONSHIPS

A relationship refers to the correspondence between two variables. When we talk about types of relationships, we can mean that in at least two ways: the nature of the relationship or the pattern of it.
Correlational and Causal relationship is not synonymous to causal. Direction of Relationship can be none, negative or positive

VARIABLE

A variable is any entity that can take on different values. Simply, anything that can vary can be considered a variable. For instance, profits can be considered a variable because profits can take different values for different companies or for the same company at different times. Similarly, country can be considered a variable because a companys home country can be assigned a value.
Hence, variables are not necessarily numerical but one tends to assign numbers to them for practical/analysis reasons. A specific value for a variable is an attribute.
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VARIABLE 2

Another important distinction having to do with the term 'variable' is the distinction between an independent and dependent variable. This distinction is particularly relevant when you are investigating cause-effect relationships. Butwho decides whether a variable is independent or dependent? (e.g. stock prices and dividends)
The independent variable is the known or controllable one, which will help us to identify/pinpoint the unknown or uncontrollable dependent variable.

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WHAT IS AN HYPOTHESIS?

An hypothesis is a specific statement of prediction. It describes in concrete (rather than theoretical) terms what you expect will happen in your study.There is no need for all research studies to have hypotheses why? A more formal approach would be to have in fact two hypotheses A hypotheses must not be only formulated but must be also motivated and convincingly argued for.

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UNIT OF ANALYSIS

The unit of analysis is the major entity that you are analysing in your study. For instance, any of the following could be a unit of analysis in a study individuals, investors, accountants, geographical units, stock prices, economic data You can have different units of analysis in the same study i.e. investigating stock prices of individual companies, or sector or market indices. You will need to identify at the earliest possible your unit(s) of analysis for both conceptual and practical reasons.

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BEWARE OF RESEARCH FALLACIES..

A fallacy is an error in reasoning, usually based on mistaken assumptions synonyms half-baked truths, urban legends or plain simple prejudices.The ecological fallacy occurs when you make conclusions about individuals based only on analyses of group data whereas an exception fallacy occurs when you reach a group conclusion on the basis of exceptional cases. This points to the dangers of over-generalising research findings and the need to focus ones conclusions.

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DEDUCTIVE VS INDUCTIVE REASONING

There are two ways of establishing what is true or false and of drawing conclusions: induction and deduction. Induction is based on empirical evidence, while deduction is based on logic.Facts acquired through observation lead us to theories and hypotheses, while with deduction, we accept or reject hypotheses.

Laws and Theories

Induction

deduction

Observations
Source: Chalmers (1982)

Explanations & predictions

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IN CONCLUSION

The key research terms have been presented and aimed at familiarising students to research Research is not just statistics Research methods involves concepts and practices aimed at solving problems At the core of research is the problem The problem needs to be formulated and conceptualised

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