THE RESEARCH PROPOSAL/PROJECT

Introduction
• The research proposal comprises several components
a) Preliminary pages
• The cover page
• The declaration page
• Acknowledgement page
• Dedication page
• Abstract
• Table of contents
• List of Tables
• List of Figures
• Acronyms and abbreviations
• Operational Definition of terms

b) Main pages
• These chapters 1 to 3. for the proposal, they are written in future tense. For the final research project the tense is modified to reflect the fact
that the research work has been completed.

b) The report pages

This covers chapters 4 and 5 in a tense indicative of the fact that the work has been completed.
 The Cover Page
• It serves to identify the research topic, the researcher, the affiliation and the date of the
research. For illustration purposes assume you are carrying out a study on “Effect of
Firm Size on Tax Efficiency of Firms Listed at the Nairobi Securities Exchange”. The
cover page is portrayed as:
Effect of Firm Size on Tax Efficiency of Firms Listed at the Nairobi Securities Exchange

Oluoch Oluoch

A research Proposal Submitted to the Department of Economics, Accounting and Finance,

in the School of Business in Partial Fulfillment of the Requirements for the award of The
PhD in Accounting degree of the Jomo Kenyatta University of Agriculture and Technology

October 2018
 The Declaration Page
• It serves to authenticate the originality of the research work and adherence
to ethical expectations. The declaration page is portrayed as:
DECLARATION

This research is my original work and has not been presented for a degree in any other
university.

Signed: _____________________________ _______________________

Oluoch Oluoch Date
HD433/1343/2018

This research proposal has been submitted for examination with my approval as the
University Supervisor.

Signed: ________________________________ ____________________

Dr. Another A.N., JKUAT Date
 Acknowledgement Page
• Used by the researcher to acknowledge various parties that may in one or
another contributed to the development of the proposal.
• Some of these include:
• Consultants
• Lecturers
• Guardians
• Fellow researchers
• Research grant providers
• Scholarship fund providers
• The government
• Support groups
• Etc
• It is used to show gratitude to the parties that contribute to the research
efforts of the researcher.
 Abstract
• The abstract allows one to elaborate upon each major aspect of the paper and helps readers decide whether
they want to read the rest of the paper. Therefore, enough key information must be included to make the
abstract useful to someone who may want to examine your work. There are four general types of abstracts.
• Critical Abstract: A critical abstract provides, in addition to describing main findings and information, a
judgement or comment about the study’s validity, reliability, or completeness. The researcher evaluates
the paper and often compares it with other works on the same subject. Critical abstracts are generally 400-
500 words in length due to the additional interpretive commentary. These types of abstracts are used
infrequently.
• Descriptive Abstract: A descriptive abstract indicates the type of information found in the work. It makes
no judgments about the work, nor does it provide results or conclusions of the research. It does
incorporate key words found in the text and may include the purpose, methods, and scope of the research.
Essentially, the descriptive abstract only describes the work being summarized. Some researchers consider
it an outline of the work, rather than a summary. Descriptive abstracts are usually very short.
• Informative Abstract: While they still do not critique or evaluate a work, they do more than describe it.
A good informative abstract acts as a surrogate for the work itself. That is, the researcher presents and
explains all the main arguments and the important results and evidence in the paper. An informative
abstract includes the information that can be found in a descriptive abstract [purpose, methods, scope] but
it also includes the results and conclusions of the research and the recommendations of the author
• Highlight Abstract: A highlight abstract is specifically written to attract the reader’s attention to the
study. No pretense is made of there being either a balanced or complete picture of the paper and, in fact,
incomplete and leading remarks may be used to spark the reader’s interest. In that a highlight abstract
cannot stand independent of its associated article, it is not a true abstract and, therefore, rarely used in
academic writing.
 Table of Contents/List of Tables/List of Figures
• A table of Contents provides a road-map to the research work.
• It is used to facilitate easy navigation through the research proposal and final research
project.
• Word processing tools have inbuilt ability of automatically generating not only the table
of contents but also the list of tables and the list of figures used in the research
document.
• The list of tables provides a road-map of the tables used in the document. They are often
numbered according to the chapter e.g. tables 1.1., 1.2 etc will appear in chapter 1; tables
2.1, 2.2 etc will appear in chapter 2; tables 3.1, 3.2 etc will appear in chapter 3 and so on.
• The list of figures provides a road-map of the figures used in the document. They are
often numbered according to the chapter e.g. figures 1.1., 1.2 etc will appear in chapter
1; figures 2.1, 2.2 etc will appear in chapter 2; figures 3.1, 3.2 etc will appear in chapter
3 and so on.
 Acronyms and Abbreviations
• The page outlines the important abbreviations used in the research document.
• The acronyms and abbreviations are specified in an alphabetic order like in the specimen
provided below.
• An acronym is an abbreviation formed from initial letters of other words or name of
something e.g. NPM : Net Profit Margin
• An abbreviation is any shortened or contracted form of a word or phrase. It includes
acronyms as well as other forms of word shortening e.g. CAP: Capitalisation.
ACRONYMS AND ABBREVIATIONS

ANOVA : ANALYSIS OF VARIANCE

CBK : CENTRAL BANK OF KENYA

CAP : CAPITALISATION

NPM : NET PROFIT MARGIN

ROA : RETURN ON ASSETS

 Operational Definition of Terms
• This page provides the definition of key terms used in the study.
• The terms must be properly referenced in line with the APA systems of referencing.
• This should focus on the key terms relating to the variables and other concepts of the
study. They should be arranged in alphabetic order e.g.
OPERATIONAL DEFINITION OF TERMS
Assets : Economic resources controlled by a firm as a result of past transactions and events
and from which future economic benefits are expected. Examples include cash,
buildings, investments (Goel, 2014)
Firm size : The magnitude of a business often measured by a variety of metrics like the number
of employees, the total value of assets, the market capitalization, the market share and
similar indicators (Miller & Modigliani, 1961).
Stock Market : A physical place used for exchange of equity and debt securities especially ordinary
shares, preferential shares, bonds and debentures (Olugbenga & Atanda, 2014)
Tax Efficiency : The ability to minimize tax liability when given many different financial decisions for
instance by investing in tax efficient avenues (Young & Cohen, 2013).
 CHAPTER ONE
• It is the introductory chapter meant to provide a background to the research problem, the
research problem itself, the research objectives, the research hypotheses, the scope of the
study, and the justification of the study. The outline of the chapter is shown in the table
below:
CHAPTER ONE
INTRODUCTION
1.1. Background to the Study
1.1.1. Firm Size
1.1.2.Tax Efficiency
1.1.3. Firm Size and Tax Efficiency Global Perspective
1.1.4. Firm Size and Tax Efficiency Local Perspective
1.1.5. Listed firms at Nairobi Stock Exchange
1.2. Statement of the Problem
1.3. Research Objectives
1.3.1. General Objective
1.3.2. Specific Objectives
1.4 Research Hypotheses/Research Questions
1.5. Scope of the Study
1.6. Justification of the Study
1.7. Limitations of the Study*
 Research Background
• The background introduces the reader to the variables, the extant literature and the basis of
the research problem.
• It must be explicit in explaining the research variables and must also highlight the
confounding aspects of theoretical, empirical and conceptual literature. It is these
confounding aspects of literature that lay down a basis for stating the research problem.
• It is advisable to provide literature from around the globe as well as related literature in the
contextual environment of study.
• It is advisable to segment the background to various sections to enable the research to
articulate literature relating to the variables, their interrelationship and well as the state of the
environment that forms the context and scope of the study.
• Incorporating background information into the introduction is intended to provide the reader
with critical information about the topic being studied, such as, highlighting and expanding
upon foundational studies conducted in the past, describing important historical events that
inform why and in what ways the research problem exists, or defining key components of
your study.
• In social sciences research introductory background information can often blend into the
literature review portion of the proposal and research project .
 Statement of the Problem
• This section follows from the background. It states what the problem is, why it is a
problem and how it is a research problem.
• A research problem is a literature problem that calls for a study because of lack of
literature agreement in that area.
• It easily can be supported by an existing research problem.
• The research must provide empirical and theoretical literature as to the what, why and
how of the problem.
• A research problem must be consistent with the research objectives as well as the
research hypotheses.
• There are varying opinions as to the appropriate length of the statement of the problem.
It is plausible that in a maximum of one and a half pages one can specify the problem
and provide evidence as to how and why it is a problem.
• From the illustration, the following can serve as a skeleton for articulating the research
problem.
1.2. Statement of the Problem
Tax efficiency is an important objective of all organizations. Businesses always aim to maximize shareholder value and this
inevitably involves minimizing cash outflows arising from payment of tax (Pandey, 2012). Despite the critical importance of
tax minimization, it is still not clear whether and how business size affects tax efficiency. This lack of clarity arises from the
seeming conflict in both theoretical and empirical literature as to the effect of business size on tax efficiency.
From a theoretical angle, there are two sets of conflicting theories that try to explain how business size affects tax efficiency.
The first school of thought propagated by corporate governance expectations of Doyle (2007) indicates that size has a positive
effect on tax efficiency and that the larger the firm size, the greater the tax efficiency. On the extreme opposing theoretical
angle is the X-efficiency theory of Leibenstein (1966) concludes that size is inversely related to tax efficiencies arises from
diseconomies of scale.
To add onto the confusion, extant empirical literature arrives at conflicting findings with respect to the effect of firm size on tax
efficiency. Sharpe (2017) while studying the effect of business size based on market share on tax efficiency found that size has
a positive effect on tax efficiency among public manufacturing firms in Bulgaria. Similar findings have been reported by Sloan
(2016) in Malaysia using assets as a measure of size; O’Hara (2014) using employee base as a measure of bank size in Nigeria
and Francis et al. (2016) using market share to measure firm size in Argentina.
Contradicting findings indicate that firm size has a negative effect on tax efficiency. A Study by Easley (2013) who used
market capitalization to measure firm size of listed firm at Johannesburg stock Exchange found that large capitalization firms
are less tax efficient when compared to their small size counterparts. These findings are supported by Chen (2017) in South
Korea for insurance firms with size measured by market share and Gray (2016)among public Banks in Botswana with size
measured using the number of employees.
Drawing from the confounding literature , it is not clear how firm size as indicated by market capitalization, asset base and
employee base affects tax compliance among firms listed at NSE. To further compound the problem, literature does not explain
how firm age moderates the effect of firm size on tax efficiency
 Research Objectives
• They are specified as both general and specific. The general objective reflects the title of the
research project while the specific objectives relate to the individual independent variables and
their relationship with the dependent variable.
• From the illustration the objectives are set as:
1.3. Research Objectives
The objectives of this study are identified as both general and specific objectives.
1.3.1. General Objective
The General objective of this study is to establish the effect of firm size on tax efficiency of firms listed at
the Nairobi Securities Exchange
1.3.2. Specific Objectives
The specific objectives are stated as:
1.To evaluate the effect of firm asset base on tax efficiency of firms listed at the Nairobi Securities
Exchange.
2.To establish the effect of firm employee base on tax efficiency of firms listed at the Nairobi Securities
Exchange.
3.To assess the effect of firm market capitalization on tax efficiency of firms listed at the Nairobi Securities
Exchange.
4.To Establish the moderating effect of firm age on he effect of firm size on tax efficiency of firms listed at the
Nairobi Securities Exchange.
 Research Hypotheses
• The hypotheses are statistically testable statements to help resolve the research questions
or meet the research specific objectives.
• They can be stated as null (falsified form of hypotheses) or alternative (hypotheses to be
held as true if the null is rejected). For the illustration, these can be specified as:
1.4. Research Hypotheses
The objectives of this study are identified as both general and specific objectives.

H01 Firm asset base does not have any significant effect on tax efficiency of firms listed at the
Nairobi Securities Exchange

H02 Firm employee base does not have any significant effect on tax efficiency of firms listed at
the Nairobi Securities Exchange
H03 Firm market capitalization does not have any significant effect on tax efficiency of firms
listed at the Nairobi Securities Exchange

Firm age has no significant moderating effect on the the effect of firm size on tax efficiency
of firms listed at the Nairobi Securities Exchange
H04
 Research Questions
• They can be used in place of the research hypotheses.
• They represent the problem areas set for testing on inquiry in the study.
• They are simply research specific objectives set in a question format.
• For the illustration, the research questions can be set as:
1.4. Research Questions
The research questions of the study are specified as
1.What is the effect of firm asset base on tax efficiency of firms listed at the Nairobi
Securities Exchange?

2.What is the effect of firm employee base on tax efficiency of firms listed at the Nairobi
Securities Exchange?

3.What is the effect of firm market capitalization on tax efficiency of firms listed at the
Nairobi Securities Exchange?

4.What is the moderating effect of firm age on he effect of firm size on tax efficiency of
firms listed at the Nairobi Securities Exchange.
 Scope of the Study
• This section provides an insight onto the scope with respect to:
i. The context of the study
ii. The time period for the study
iii. The theoretical scope
iv. The population of the study
v. The conceptual scope of the study
• The researcher must be careful to justify the choice of the scope by relying on existing literature. For the
illustration the scope could be shown as:

1.5. Scope of the Study

This study aims to cover all the listed companies on the Nairobi Stock Exchange as at 31.12.2017. This scope is
justifiable on the basis that listed companies are under an obligation to publish their financial information.
Accordingly there will be adequate data for analysis of tax efficiency. In addition, it is only listed companies that
one can obtain market capitalization from their trading data at NSE.
Further the study will cover a five year period running from January 2013 to December 2017. The period is
considered long enough to establish cross sectional and time series variations important in such studies as
stipulated by Garman (2012). From the theoretical aspect the study will focus on X-efficieny theory and corporate
governance theories. Finally, from a conceptual point of view, the study will use firm asset base, employee base
and market capitalization to measure firm size. These are aspects readily measurable from available secondary
data (Fama, 2008).
 Significance/Justification of the study
• The justification of the study provides the benefits of the study to the various
stakeholders as well as the significance of the study to literature.
1.6. Significance of the Study
This study is expected to provide benefits to a wide range of stakeholders in the business world .To investors, the
findings show the interlinkage between firm size and listed firms’ tax efficiency. They are likely to use the findings
to make tax decisions in a management decisions in a manner that would maximize shareholder.
To market regulators, the findings provide an opportunity to show how firm size is related to the tax efficiency of
listed. This linkage can be used to provide information that would help regulators especially the Institute of
Certified Public Accountants of Kenya (ICPAK) and the Capital Markets Authority (CMA) to provide guidelines on
the disclosure requirements on tax information.
To Kenya Revenue Authority (KRA) and similar authorities, the study is likely to provide information that could
help close avenues of tax avoidance as based on size of companies. This can help increase the tax revenue base of
such authorities.
To scholars, academicians and other researchers, the findings of the study help to bridge the existing empirical
literature gap in that they will help show how firm size affects tax efficiency among listed companies in an
environment like the Kenyan one. This will therefore provide findings that can be compared to the existing
literature and thereby boost the accumulating empirical evidence on this area of academic inquiry. It will help
explain theoretically and empirically how firm age moderates this relationship
 Limitations of the Study
• This section is often not an integral part of the proposal. It however apprears in the final
research project where the researcher provides the empirical, contextual, conceptual and
theoretical limitations encountered during the research work.
• Such limitations are usually in line with the recommendations for further study.
• For the illustration above the section could be provided as:

1.7. Limitations of the Study

The study encountered a number of limitations in the course of the study. Firstly, it focused only on the companies
listed at the NSE. It therefore left out other firms that are non-listed yet in is not clear whether they could provide
findings similar to those in this study.

Secondly, it covered a short period of time spanning only five years. It could be that a longer period could provide
contradictory findings given the time series patterns of data. In addition, the length of time may not have been
long to give room for establishing the effect of growth of a firm on tax efficiency.

Lastly, the study relied on firms in Kenya. It may be that the findings are attributable to the unique reporting
standards in Kenya and that it may be hard to replicate similar findings in varying regulatory regimes.
 CHAPTER TWO: LITERATURE REVIEW
• The chapter outline is provided as:
CHAPTER TWO
LITERATURE REVIEW
2.1. Introduction
2.2. Theoretical Framework
2.2.1. The Corporate Governance Theory
2.2.2. The X-Efficiency Theory
2.2.3. Firm Life Cycle Theory
2.3. Conceptual Framework
2.3.1. Firm Asset Base
2.3.2. Firm Employee Base
2.3.3. Firm Market Capitalization
2.3.4. Firm Age
2.3.5. Tax Efficiency
2.4. Empirical Literature Review
2.4.1. Firm Asset Base and Tax Efficiency
2.4.2. Firm Asset Base and Tax Efficiency
2.4.3. Firm Market Capitalization and Tax Efficiency
2.4.4. Firm Age and Tax Efficiency
2.5. Critique of Literature
2.6. Literature Gaps
2.7. Summary
 Introduction
• The section is used to introduce the chapter.
• It serves as a snapshot of the content of chapter 2.
• It must be as brief as possible.
• For illustration:

2.1. Introduction
This chapter presents the review of literature on firm size and tax efficiency. This is
divided into theoretical as well as empirical literature review. The theoretical
literature review presents theories that try to link firm size to tax efficiency including
their inherent limitations in the context of this study. Empirical literature review on
the other hand presents the extant studies on this area. The empirical evidence is
derived from both local studies as well as from studies from around the globe.
Subsequently, the conceptual framework and research gaps resulting from the
literature review are presented.
 Theoretical Framework
• The section is used to evaluate the theories that inform the study area. A good theory
must help explain how the study variables are related. The theoretical literature review
must identify the theory’s proponent, proposition as well as interrogate the theory using
extant empirical literature. This may help bring out the theoretical limitations.
• For illustration:
2.2. Theoretical Framework
This section discusses the various theories that try to explain the relationship between firm size and tax efficiency of firms.
2.2.1. Corporate Governance Theory
Corporate governance theory proposed by Doyle (2007) indicates that firm size has a positive effect on tax efficiency and
that the larger the size of a firm, the greater the tax efficiency. The theory which falls in line with the classical economics
theory of economies of scale postulates that large firms have highly skilled and capable corporate management teams that
help firms identify tax expense management opportunities and thereby exploit them to reduce tax liability. It is such skilled
personnel that are able to identify tax efficient investment vehicles and thereby use them to enhance tax efficiency. This
theory has been supported by a number of empirical studies. Chen et al. (2016) for instance studied the relationship between
tax liability and board characteristics among South Korean manufacturing firms. The findings showed an inverse
relationship between board skills diversity and tax liability. Olum (2017) and Eliakim (2015) have reported similar findings.
On the opposing side, some studies have found little evidence to support the Doyle (2007) theoretical supposition. Li (2012)
for instance found that corporate governance does not affect tax liability of firm. Using board diversity to proxy for
corporate governance among medium size firms in Hong Kong, the study found board diversity to have no bearing on tax
liability. Similar findings have been registered by Wilkins (2014) and Aromba (2013).
 Conceptual Framework
• The section shows a schematic representation of the interrelationship expected between
the various variables of the study. It draws from the relationships established from the
theoretical literature review. Each variable must then be empirically discussed.
• From the illustration:

2.3. Conceptual Framework

The interrelationship between firm size and tax efficiency is shown in figure 2.1.

Firm Asset Base

•Total Assets

Firm Employee base Tax Efficiency

•No. of Employees •Tax Liability Ratio

Firm Capitalization
•NSE Market value Firm Age
•LnAge
Fig. 2.1: Conceptual Framework
 Empirical Literature Review
• This form of literature review appraises existing studies related to the area of study. The
review involves evaluating the context and scope of the study, the objectives, the design
and methodology as well as the findings. One should go ahead and compare such studies
with similar and contrasting studies and identify empirical literature gaps.
• A good evaluation of empirical literature must consider the following:
i. Must focus on current empirical studies since knowledge is very dynamic and old
references could have been overtaken by newer findings
ii. Must use authoritative literature and not any unverifiable study
iii. Must bring out the following:
• The author and year of the study
• The context of the study
• The scope of the study
• The objectives of the study
• The methodology used for the study
• The findings of the study
• Comparison with similar findings
• Contrast with similar studies
• For illustration purposes the following literature review suffices:
2.4. Empirical Literature Review
Several empirical studies have been done both globally and locally to establish the general effect of firm
characteristics on tax compliance as well as the specific effect of firm size on tax efficiency. These studies are
reviewed in this section in a bid to establish the existing empirical literature gaps.
2.4.1. Firm Asset base and Tax Efficiency
Aghouei and Morad (2015) carried out a study to evaluate the relationship of firm characteristics and corporate
governance with the difference between declared and final taxes in Iran. The study focuses on firm characteristics
and corporate governance criteria in 102 listed companies at the Tehran Stock Exchange. The research analytical
model was multiple linear regression (MLR) along with the generalized panel method of integrated data. Firm size as
measured by total assets was one of the firm characteristics evaluated in the study. The findings of the study indicate
that there is a no significant effect of size as measured by total assets and the difference in declared and final taxes.
Taken of a wholesome the difference between declared and final taxes can be used to measure tax efficiency. In this
respect, Aghouei and Morad (2015) find no evidence to reject the hypothesis that firm size as measured by asset base
has no significant effect on tax efficiency. The findings of Aghouei and Morad (2015) are supported by a number of
other studies Gerry (2017) for Ghana manufacturing firms and Chengli (2016) for Pakistan Banks.
2.4.2. Firm Employee Base and Tax Efficiency
2.4.3. Firm Capitalization and Tax Efficiency
2.4.4 Firm Age and Tax Efficiency
 Critique of Literature
• This is a systematic way of objectively reviewing a piece of literature to highlight both
its strengths and weaknesses.
• The critique must address both empirical and theoretical literature.
• The critique may find a study falling short on scope, methodology, theoretical basis,
context, concept or any other basis.
• For illustration purposes:
2.5 Critique of Literature
The extant literature has various shortcomings. Aghouei and Morad (2015) for instance is one of the
most important studies on firm size and tax efficiency. The study carried out in Iran explores a wide
range of firm characteristics including size and how they affect tax efficiency. It helps provide a
basis for conclusion on emerging countries with similar characteristics to Iran. It however falls
short on some fronts. It for instance only focuses on listed firms and fails to cover companies
outside the scope of Tehran Stock Exchange. It is also localized to Iran and fails to incorporate
firms from outside that country yet it may be the case that the findings depend on the context
covered. It is also likely that contextual characteristics of a country affect the findings of the study.
 Research Gaps
• This section appears at the end of chapter 3 and shows the theoretical, conceptual and
empirical short-comings in extant literature.
• It highlights the overall shortcomings in the existing literature that is covered by the
study. In essence, it corresponds with the research statement of the problem and
objectives.
• As an illustration:
2.6. Research Gaps
Following the literature review in the foregoing sections, several literature gaps become evident. Firstly, the
literature (Aghouei & Morad, 2015; Ezra, 2016; Kim, 2016; Liam, 2011) focus on tax compliance rather
than tax efficiency yet tax efficiency is critical in achieving firm shareholder wealth maximization objective.
In addition, they are carried in contexts outside Kenya (Iran, Pakistan, South Korea, China) yet Kenya has a
unique tax administration and regulatory regime that may affect the relationship between firm size and tax
efficiency.
 Summary
• This is the ultimate section in chapter two that summarizes the theoretical, empirical and
conceptual literature covered in the section.
• It is a snap-shot of the conclusions arrived at in the course of the literature review.
• It must cover:
i. Theoretical conclusion
ii. Conceptual conclusion
iii. Empirical conclusion.
 CHAPTER THREE
• This chapter covers the research methodology used in the study. It covers the following:
CHAPTER THREE
RESEARCH METHODOLOGY
3.1. Introduction
3.2. Research Design
3.3. Study Population
3.4. Sample and Sampling Design
3.4.1. Sampling Frame
3.4.2. Sample Size
3.4.3. Sampling Approach
3.5. Data and Data Collection
3.5.1. Research Data
3.5.2. Data Collection Instrument
3.5.3. Pilot Test
3.6. Data Analysis and Presentation
3.6.1. Model Specification
3.6.2. Variable Operationalization
3.6.3. Diagnostic tests
3.6.4. Descriptive Statistical Tests
3.6.5. Inferential statistical Tests
 Introduction
• The section serves to introduce the chapter three.
• For illustration:

3.1. Introduction
This chapter provides the basis of testing the research hypotheses of the study and
provides the mechanism for achieving the study objectives. It not only provides the
research design, but it also defines the study population and sampling technique. It
ultimately sheds light of the study model, the descriptive statistics and the tests of
hypotheses proposed for the study.
 Research Design
• The research design refers to the overall strategy that one chooses to
integrate the different components of the study in a coherent and logical
way, thereby, ensuring he effectively address the research problem;
• It constitutes the blueprint for the collection, measurement, and analysis of
data.

3.2. Research Design

This study is designed as a longitudinal survey of the value relevance of all the
manufacturing companies over a 5 year period spanning January 2013 through December
2017. A longitudinal study as per Shadish, Cook and Campbell (2002) is suitable when
observation is to be repeatedly made on the same subjects over a long period of time. In
this study size and tax efficiency information of the same listed companies will be
collected and analyzed over a 5 year period covering January 2012 to December 2016.
Reasonable data capable of analysis is only possible over a multiple period of time that
will involve multiple observations of the companies in line with the expectation of
Shadish, Cook and Campbell (2002).
 Study Population
• Shows all the possible units of analysis i.e. the universe of the units under study.
• For illustration:
3.3. Study Population
The population consists of all the 65 companies listed at the NSE as at 31 st December 2017.
The choice of listed companies is considered to be important because the listed companies
are under an obligation to continuously provide financial reports as a pre-requisite for
continued listing (NSE, 2014). This is necessary in order to collect the prerequisite financial
statement and tax data to carry out the study.

The study is designed as a census study. All qualifying companies will be included in the
study. The qualifying criteria would be that a company have enjoyed continuous trading over
the 5 year period covered by the study. Accordingly, companies delisted from the NSE over
the study period will be eliminated from the sample. This will allow the study to follow the
longitudinal design adopted by focusing on the effect of firm size on tax efficiency of the
sample companies over the study period.
 Sample and Sample Design
• The section shows the approach used in selecting the study units from the population.
■Simple random sampling. ■ Stratified sampling
■ Cluster sampling ■ Multistage sampling
■ Systematic random sampling ■ Voluntary sampling
■ Convenience sampling ■ Quota Sampling-
■ Purposive/Judgmental Sampling ■ Snowball sampling

3.4. Sample and Sampling Design

The section shows the approach used in selecting the study units from the population
3.4.1. Sampling Frame
The Sampling frame is all the listed companies at the NSE
3.4.2. Sample Size
This study is designed as a census study covering all the 65 companies listed at the NSE as at
December 2017.
3.4.3. Sampling Approach
The study is designed as a census study. Accordingly all qualifying companies will be included in the
study. The qualifying criteria would be that a company have enjoyed continuous trading over the 5
year period covered by the study.
 Data and Data Collection
• Research data is defined as recorded factual material commonly retained by and accepted in the scientific
community as necessary to validate research findings; although the majority of such data is created in
digital format, all research data is included irrespective of the format in which it is created.
• Data collection is a process of accumulating information from all the relevant sources to find answers to
the research problem, test the hypothesis and evaluate the outcomes.
• Data collection methods can be divided into two categories: secondary methods of data collection and
primary methods of data collection since data for the study can be primary data or secondary data.
• Secondary data is a type of data that has already been published in annual reports, economic bulletins,
books, newspapers, magazines, journals, online portals etc.
• Primary data collection methods can be divided into two groups: quantitative and qualitative.
• Quantitative data collection methods: are based in mathematical calculations in various formats. Such
methods include questionnaires with closed-ended questions, methods of correlation and regression, mean,
mode and median and others. Quantitative methods are cheaper to apply and they can be applied within
shorter duration of time compared to qualitative methods.
• Qualitative research methods: they do not involve numbers or mathematical calculations. Qualitative
research is closely associated with words, sounds, feeling, emotions, colours and other elements that are
non-quantifiable. Qualitative studies aim to ensure greater level of depth of understanding and qualitative
data collection methods include interviews, questionnaires with open-ended questions, focus groups,
observation, game or role-playing, case studies etc.
• For illustration purposes

3.5. Data Collection

This section details the data to be used in the study and how it is to be collected.

3.5.1. Research Data

Secondary data is to be used in the study to evaluate the effect of firm size on tax efficiency
of companies listed at the Nairobi Securities Exchange. The data will be obtained from the
semi-annual accounts of listed companies as well as the Nairobi Securities Exchange
trading data database. Semi-annual data on total assets and tax expense will be collected
from the semi-annual financial statements of companies listed at the NSE. Data on
outstanding shares and share prices will be obtained from the NSE trading data-base. The
data will be used to measure firm size and tax efficiency.

3.5.2. Data Collection Instrument

Data will be collected using a secondary data collection sheet as specified in appendix I
 Data Analysis and Presentation
• This is a critical section of the proposal that details how the data is to be analysed in
order to achieve the research objective.
• The choice of the analysis method depends on the research data and objectives. For
Illustration:
3.6.2. Variable Operationalization
To measure the variables, the proxies indicated in table 3.1. will be used.
Table 3.1: Variable Operationalization
Variable Type Source Measure
Asset Base Independent Balance Sheet LnTA
Employee Base Independent Annual Report LnE
Capitalization Independent NSE LnCap
Firm Age Moderating Website LnAge
Tax Efficiency Dependent Financial Statements Tax/TA
3.6.3. Diagnostic tests
For the overall model, the coefficient of determination (R-square value) will be used to show the overall explanatory power of
earnings quality information and market premium of the market returns of the companies under consideration. In addition, F-test
will be used to show the goodness of fit of the model. It would be considered a good fit if the F-ratio from the regression output
would be greater than the critical level of significance, which will also be an output from the regression.
3.6.4. Descriptive Statistical Tests
To have a general description of the independent and the dependent variables descriptive measures of central
tendency (mean and median) as well as dispersion (standard deviation) will be used. To combine the two,
coefficient of variation will be computed by relating the standard deviation of the variables to the mean of those
variables
3.6.5. Inferential statistical Tests
The hypothesis will be tested by checking out the statistical significance of coefficients of the regression output
of the model (1) at 95% confidence interval. The t-statistic of the output will be compared with the critical
student t-distribution value for a two tail test at 0.05 level of significance. The p-value will be used to
complement the findings from the t-statistic.
 CHAPTER FOUR
• The chapter presents the research findings.
• The outline of the chapter is provided as:
CHAPTER FOUR
RESEARCH FINDINGS, PRESENTATION AND DISCUSSION

4.1. Introduction
4.2. Pilot Test
4.3. Descriptive statistical Test Findings
4.4. Inferential Statistical Test Findings
4.4.1. Diagnostic Tests
4.4.2. Tests of Hypotheses

• NB: presentation of findings must correspond with a discussion that compares and
contrasts the findings with those from similar studies in extant literature
 CHAPTER FIVE
• The chapter provides a summary of the findings, conclusion on the basis of each
objective and recommendations arising from the conclusion.
• The recommendations are usually both practical recommendations as well as
recommendations for further study.
• The recommendations for further study must be in line with the study limitations.
• The outline of the chapter is provided as:
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1. Summary

5.2. Conclusion

5.3. Recommendations

5.4. Areas for Further Study

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