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Quantitative Data Gathering Techniques

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 Audrey Paterson, David Leung GMS
William Jackson, Robert MacIntosh
& Kevin O’Gorman

THE GLOBAL MANAGEMENT SERIES

Research Methods
for Accounting
& Finance

Quantitative Data Gathering Methods and Techniques

Ahmed Salhin, Anthony Kyiu, Babak Taheri, Catherine Porter,
Nikolaos Valantasis-Kanellos and Christian König

This is a sample only. Full information and purchase details for this title
are available at http://www.goodfellowpublishers.com and for other
Series Editors: Robert MacIntosh & Kevin O’Gorman
titles in the series at the Global Management Series page.
THE GLOBAL MANAGEMENT SERIES

Research Methods
for Accounting
and Finance

A guide to writing your dissertation

Audrey Paterson, David Leung, William Jackson,

Robert MacIntosh and Kevin O’Gorman

(G) Goodfellow Publishers Ltd

(G)
Published by Goodfellow Publishers Limited,
26 Home Close, Wolvercote, Oxford OX2 8PS
http://www.goodfellowpublishers.com

Published 2016

British Library Cataloguing in Publication Data: a catalogue record for this

title is available from the British Library.
Library of Congress Catalog Card Number: on file.

ISBN: 978-1-910158-90-6
Copyright © Audrey Paterson, David Leung, William Jackson,
Robert MacIntosh and Kevin O’Gorman, 2016
All rights reserved. The text of this publication, or any part thereof, may not
be reproduced or transmitted in any form or by any means, electronic or
mechanical, including photocopying, recording, storage in an information
retrieval system, or otherwise, without prior permission of the publisher or
under licence from the Copyright Licensing Agency Limited. Further details
of such licences (for reprographic reproduction) may be obtained from the
Copyright Licensing Agency Limited, of Saffron House, 6–10 Kirby Street,
London EC1N 8TS.

All trademarks used herein are the property of their respective owners.
The use of trademarks or brand names in this text does not imply any
affiliation with or endorsement of this book by such owners.

Design and typesetting by P.K. McBride, www.macbride.org.uk

Cover design by Cylinder

This is a sample only. Full information and purchase details for this
title are available at http://www.goodfellowpublishers.com and
for other titles in the series at the Global Management Series page.
 Contents

Acknowledgements v

Biographies vi

Preface xiv

1 The Nature of Accounting and Finance Research 1

Audrey Paterson, William Jackson, Moh Sherif, Robert MacIntosh and Nigel Caldwell

2 Formulating a Research Project 23

Mercy Denedo, Andrew MacLaren and Emma Hill

3 Critical Reflections of Academic Literature 41

Anthony Kyiu, Nana Abena Kwansa,
Audrey Paterson, Norin Arshed and Mike Danson

4 Research Philosophy and Paradigm 59

Kevin O’Gorman and Robert MacIntosh

5 Data and Case Study Research in Accounting and Finance 81

Roza Sagitova, Darren Jubb, Anees Farrukh, Angeliki Papachroni and Sean Lochrie

6 Data Sources from Archives to the Internet 101

Darren Jubb, Lubaina Zakaria, Keith Gori and Rodrigo Perez-Vega

7 Methods and Techniques for Qualitative Data Gathering 123

Bridget Ogharanduku, Darren Jubb, Sean Lochrie, Ross Curran and Kevin O’Gorman

8 Evaluating and Analysing Qualitative Data 142

Bridget E Ogharanduku, Lubaina Zakaria, Rafał Sitko and Katherine J C Sang

9 Quantitative Data Gathering Methods and Techniques 168

Ahmed Salhin, Anthony Kyiu, Babak Taheri, Catherine Porter,
Nikolaos Valantasis-Kanellos and Christian König

10 Approaches to Quantitative Data Analysis and Evaluation 187

Stephen Rae, Ahmed Salhin, Babak Taheri, Catherine Porter, Christian König and
Nikolaos Valantasis-Kanellos

11 Ethics, Moral Philosophy and Accounting and Finance Research 211

Audrey Paterson, David Leung and William Jackson
12 Writing Up: A Tool Kit for Constructing your Written Project 239
Robert MacIntosh, Thomas Farrington, John Sanders and Mercy Denedo

Appendices
1 Time Management and Planning Your Research Project 255
John Sanders, Vera Tens and Robert MacIntosh

2 Evaluating Your Research Project 266

Nigel Caldwell and Robert MacIntosh

3 Project Structure and Word Counts 271

Kevin O’Gorman

4 Information and Consent 273

James Richards, Lakshman Wimalasena and Gavin MacLean

Index 275
 9 Quantitative Data
Gathering Methods
and Techniques

Ahmed Salhin, Anthony Kyiu, Babak Taheri,

Catherine Porter, Nikolaos Valantasis-Kanellos
and Christian König

Researchers are concerned with analysing and solving problems. These problems come
in many forms, can have common features and often include numerical information. It
is therefore important that researchers should be competent in the use of a range of
quantitative methods. Data is required in order to perform quantitative analyses. This
chapter focuses on methods of collecting quantitative data, sampling and measure-
ment issues, surveys, collecting secondary data and experimental research.

The nature of quantitative research

According to our Methods Map (see Chapter 4), quantitative methods are part
of an objective ontology and a positivist epistemology. Social science research
is mainly influenced by the hypothetico-deductive paradigm (a research
approach that starts with a theory about how things work and derives test-
able hypotheses from it). According to Malhotra (2009), quantitative research
aims at quantifying the collected data and employs some kinds of statistical
analysis based on a representative sample. The following phrases are linked
with quantitative methodology and are often used interchangeably: deductive
approach, etic view, objective epistemology, structured approach, systematic
approach, numerically based data collection, statistical analyses and replicable
research design.
 Quantitative Data Gathering Methods and Techniques 169

In other words, quantitative studies have four main characteristics:

1 systematic/reconstructed logic and linear path (step-by-step straight line);
2 data which is hard in nature (e.g. numbers);
3 a reliance on positivist principles and an emphasis on measuring variables
and testing hypotheses and
4 they usually verify or falsify a pre-existing relationship or hypothesis.
Advantages of using quantitative data relative to qualitative data include
the broad comparability of answers, speed of data collection and the ‘power
of numbers’. Qualitative questions can be asked in a quantitative survey, but
responses (and resultant data) are much more structured (and, some may say,
restrictive).
The data that you need to collect will very much be driven by the research
question you are trying to answer (see Box 9.1). This needs to be very specific
and will drive both your data collection method and sampling. We discuss these
terms below.

Box 9.1: Examples of research questions suited for

quantitative analysis
In its simplest form, a quantitative research question will try to quantify the variables
you wish to examine.
e.g. ‘What is the average change in a company’s value after merger and acquisition trans-
actions?’
9
Another researcher might wish to identify the differences between two or more groups
on one or more variables.
e.g. ‘What is the difference in value between financial and non-financial companies after
merger and acquisition transactions?’
Finally, a researcher might wish to explore the relationship between one or more vari-
ables on one or more groups. This type of research is mostly associated with experi-
ments and the identification of causal relationships as will be discussed later in the
chapter.
e.g. ‘What is the relationship between leverage and the value of a company after merger
and acquisition transactions?’
170 Research Methods for Accounting and Finance

„„ Defining dependent and independent variables

Data analysis and design involves measuring variables, which can be depend-
ent or independent. We define dependent and independent variables as follows:
a dependent variable is one which the researcher thinks will be affected by
another variable (or by an experiment), while an independent variable is one
which the researcher thinks will affect the dependent variable. These will be
identified directly from the research question. For example, if you are studying
the effects of stock liquidity on firms’ performance, firms’ performance is the
dependent variable and liquidity is the independent variable. Other independent
variables, called control variables, may include firm size, capital structure and
other factors that may affect performance. These control variables are included
in order to provide a clear understanding of the role of the independent variable
on the dependent variables. In the example above, stock liquidity is not the
only variable that affects the performance of the firm: size, capital structure and
some other factors might also have an impact on performance. The power of
the relationship between the dependent and the independent variables under
investigation can be understood more reliably through the inclusion of control
variables in the model.
For all quantitative studies, a crucial component of design is the selection
and measurement of the dependent variable. It is crucial because the useful-
ness of the research depends upon the relevance of the dependent variable and
its representation on the outcome of interest. Researchers must be cautious, as
dependent variable selection reflects the problem definition process and can
thus influence the decision-making. Our example suggests the aspect of per-
formance to be considered and the method of measuring it should be carefully
selected. For example, if the researcher is interested in the ‘financial’ aspect of
performance, he/she has to choose a suitable measure of financial performance,
e.g. accounting measures, such as return on assets (ROA) and return on equity
(ROE), or market measures, such as Tobin’s Q and market return. To use
a different example, if a researcher studying the relationship between board
of directors’ diversity and capital structure were to choose ‘the ratio of male/
female directors in the board’ as the dependent variable, he/she would have
to justify why that ratio is considered to be a more appropriate indicator of
diversity than, for example, the ratio of independent directors in the board.

„„ Primary and secondary sources of data

In quantitative research, data can be gathered from either a primary or a second-
ary source. Primary data refers to data that has been collected directly through
first-hand experience. The most common means of gathering primary data for
 Quantitative Data Gathering Methods and Techniques 171

quantitative research is through the use of experiments and surveys, which will
be explained in detail later in this chapter. Secondary data, on the other hand,
is pre-existing available data collected from second-hand sources. The type of
data which will be collected depends on a number of factors, such as (1) the
objectives of the research and (2) time and resources constraints, as primary
data collection can be time consuming and expensive.

Gathering primary quantitative data

„„ Sampling and measurement
Population and sample size
The collection of primary data requires that the researcher clearly define the
population under investigation, as well as the units of analysis that constitute
that population. ‘Population’ refers to all the concerned units (e.g. people, com-
panies) within a particular problem space and at the specified time that the
researcher would like to study. For example, in a study looking to ascertain the
level of compliance to the UK code of corporate governance, the population
would be all public UK companies. However, because it is often impossible
to investigate all members of the population (usually for legitimate reasons,
such as time and resources constraints), a portion of the population, known
as a ‘sample’, is studied. Samples are therefore used to make inferences about
the population. In trying to draw a sample from a population, a number of
techniques are used. Broadly, there are two types of sampling techniques: prob-
ability/random sampling and non-probability/non-random sampling. 9
„„ Probability sampling uses a random selection process and gives every
member of the population an equal chance of being included in the sample.
There are two main requirements for probability sampling: first, an adequate
sample frame, comprising a comprehensive list of all members of the popu-
lation of interest, and second, an ability to randomly select based on features
present in the sample frame (Walter 2013).
„„ Non-probability sampling involves a specific sample chosen on the basis
of particular characteristics or similar differentiating features relevant to
the study; therefore, it cannot be used to determine whether the results of
the study are representative of the entire population. Table 9.1 provides a
summary of the various types of probability and non-probability sampling
techniques.

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