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BBA Program

BUSINESS RESEARCH METHOD

Course Policy

Course Title: BRM (Business Research Method)

Total Credit: 3 Units

Credit Hours: 48hrs

Teaching Method: Lecture, Simulation and CBL

Evaluation Method: Mid-term, Research Paper, Assignments and

Terminal Exam

Recommended Books and Webs:

1) Research Method for Business. Uma Sekaran & Roger Bougie, A Skill building approach. 5th Edition

2) Research Method for Business Students. Saunder et al., 5th Edition

3) Business Research Method. Donald Cooper & Pamela Schindler, TMGH 9th Edition

4) Business Research Method. Alan Bryman & Emma Bell, Oxford University Press

5) Research Methodology. C.R. Kathorai

6) Economic Papers / Ideas and MPRA

7) SSRN

8) Scopus

9) Elsevier / Science

Course Structure

[1]. Research Methodology (Business Research Method)

Chapter 1

Introduction to Business Research

Learning Objectives:

After Completing this chapter, you will be able to demonstrate

understanding the following:

1) Define what is research

2) Recognize the meaning, concept and objectives of research

3) Types of research

4) Process of Research Design

5) The Features of Research

Definition

Research is a systematic and an organized effort to

investigate a specific problem encountered in the work

setting which needs solution (Bougie, 2005).

Research is an art of scientific investigation.

Research is a creative work undertaken on a systematic

basis in order to increase the stock of knowledge (Aristotle,

384bc).

Research holds the torch of knowledge (Basrelief, 1986).

Research is a systematic approach to purposeful

investigation which releases logical solution (Kumar, 2007).

Research is a process of steps used to collect and analyze

information to increase our understanding of a topic or

issue (Creswell, 2008).

Meaning of BRM

BRM is further a scientific attempt in gathering,

processing, analyzing and interpreting business

and economic related data to support the decision

making process.

Business research is a competitive analysis of data

with regards to customers, consumers, rivals,

market and strategic business issues to help

managers make rational decisions.

BRM is a scientific inquiry that assists to solve

business problems and to increase the knowledge

of managers (Smith, 2008).

BRM Vs. SS Research

BRM SS

Context research

Deals with financial, Deals with sociological

marketing, products, and psychological

price, customer, rivals tendencies

and sales variables Helps the overall

Helps managers to society and increases

innovate new business the social science

oriented works knowledge stock

Objectives of Research

There are a lot of things that we learn from others and

learn from our own observations and experience. Personal

experiences might be fitting good in one condition and

might be ineffective in other.

There are lots of other things that remain hidden and need

exploration.

There are always knowledge gaps as we evolve.

Human beings need welfare which calls for innovations.

Businesses need to exist, sustain, grow and make profit.

Labors need jobs to satisfy their requirements.

Etc.

Types of Business Research

Business research is widely divided into two

main categories:

1) Basic Research: A basic research (also called the pure or

fundamental) is a scientific approach aiming to improve scientific

theories for effective improvements and prediction of natural

phenomena.

involving the practical application of science. It accesses and uses

some part of the research communities' (the academia's) accumulated

theories, knowledge, methods, and techniques, for a specific, often

state-, business-, or client-driven purpose (https://en.wikipedia.org/wiki/Applied_research).

Process of Research

Till 16th century, the inquiry into new knowledge

areas was based on the participation of individuals

but later the role of participants changed to be

observers rather than participants. Mechanistic and

organized way of looking into gaps and

innovations began to evolve.

The scientific revolution in 17th has benchmarked

the sequential process of investigating into new

phenomenon.

Process of Research

Formulation Research

Looking into

of Research Cost Benefit

past / LR

Problem analysis

Data

Design and Size of

Collection

Decision Sample

Test

Research Report the

Hypothesis

Method Findings

Types of Research Design

Research Design

Exploratory Conclusive

Direct Indirect

Approach Approach

Group Interview Techniques

Association completion Completion Completion

Techniques Techniques Techniques Techniques

Exploratory Research Design

1) Exploratory research is the one which is

conducted on a phenomenon that is not

clearly defined. so:

1) Used to clarify and define a hidden problem

2) Used to provide greater details where small

amount of information exists.

during 2015.

Quantitative Research

The systematic approach to test a research

hypothesis by deploying statistical, mathematical

and computational techniques.

Qualitative Research

It is conducted to investigate any attitudinal and

tendency hypothesis to provide an insight into the

opinion, rationale reasons and motivations.

It is used to gain understanding about qualitative

problems and facilitates in building the ideas for

potential quantitative approach to research.

workplace*.

Conclusive Research

According to Malhotra (1999) conclusive research

is designed to assist the decision maker in

deciding, evaluating and choosing the better action

course in a given situation. This is divided into

two types:

Descriptive Research Causal Research

explains happening, an event or cause and effect relationship

to offer accurate and factual arising due to factors affecting a

description of the population phenomenon (Mohan, 2007).

being studied (Brannon, 1992).

The Hallmarks of Sc. Research

We believe and assume that any research attempt should fulfill the

requirements (i.e. to fill knowledge gaps or to innovate).

Research is an expensive work which uses time, money and

intellectual resources and therefore, such attempts must have been

filtered and characterized to possess the following features:

Purposiveness Objectivity Generalizability

The research should have Research shall reflect real A research scope must be

a specific purpose. life matters thus, it shall be generalized to maximum

objective not subjective. extent.

Soundness of theoretical Confidence Simplicity in explaining

framework and Closeness of findings to dilemma and phenomena

Methodology. truth which is based on so can attract more

confident findings. readers and thus extend

its benefits

Testability Replicability

Developing testable Test of hypothesis result

hypothesis. shall reflect the truth.

Chapter 2

Data Collection

Learning Objectives

After the completion of this chapter, you learn the following significant issues:

1) What is a research data?

2) Sources of Data

1) Primary Data

2) Secondary Data

3) Types of Research Data

1) Time Series Data

2) Cross Section Data

3) Longitudinal and Panel Data

Research Data

Research data (simply the data) are the facts

and figure that are collected, tested and

analyzed to produce actual results on which

a research conclusion is drawn.

Data is the raw material that needs to be

analyzed and interpreted through a set of

research testing models to produce

meaningful information.

Sources of Data

There are two main sources of data:

1) Primary Source of Data: It is the first hand /

original evidence left behind by respondents of a survey,

interview, opinion expression, records and scientific data

at a given time. This data can be collected through:

1) Research Questionnaires

2) Surveys

3) Personal Interviews

4) Emails

5) Fax

6) Telephone

Sources of Data

2) Secondary Source of Data: The series of

financial and economic data that are collected for a special

purpose and that is still of further use by economic and

financial researchers is called the secondary data. Such data

can be collected from:

1) Government Departments

2) Research Units

3) National Bureau of statistics

4) World Bank Indicator: World Bank Group

5) Central Bank of Brazil

6) Case Studies

7) Libraries

Types of Research Data

There are several types of data that

researchers are interested to investigate and

test them like:

Time Series Data

Cross Section Data

Longitudinal / Panel Data

Time Series Data

Set of chronological observations describing an economic or

finance variables arranged either on unit, daily, weekly,

monthly, quarterly or yearly basis is called time series data.

Year Sales / Unit 170

Sales per Unit

2005 $120.00 160

2006 $120.89

150

2007 $130.25

140

2008 $132.12

2009 $135.00 130

2010 $148.90

2005 6 7 8 9 10 11 12 13 14

2011 $165.25

2012 $170.00

Cross Section Data

The set of data collected on one or more variables

presenting a given time is called cross sectional

data.

An example of cross section data can be the

sample of 1,000 consumers of chocolate during

one month regressed on the level of their income.

Longitudinal / Panel Data

Is a set of data collected to investigate a subjects

changes over the course of another in a

chronological time period. It is sometimes called

the Time Series Cross Section Data as well.

An example of panel data can be the GDP growth

rate in SAARC Countries from 1960 to 2015.

Chapter 3

Sampling

Learning objectives

Upon completion of this chapter, you will know the following:

1) Meaning and concept of sampling

2) Population and sample parameters and estimates

3) Types of sampling

4) Calculating sample size

Introduction

Recently, we discussed the data and its collection sources

(i.e. primary and secondary), in this chapter we mainly

focus on how to collect data from primary sources.

Surveys are the most popular and widely used method of

collecting data directly from the intended and random

respondents with regards to a specific research study.

Though, there are several approaches in collecting primary

research data from respondents, the mostly used term

survey is more applicable in research studies.

Research Population

A research population is the entire number of people,

groups, events and objects of interest to a scholar for the

purpose of his/her research.

of investigable objects that a researcher intends to make

inference.

marketing strategy do the production companies adopt in

Afghanistan. So, the entire production companies located

in the country refers to as the population.

Sample

Sample is the friction of a population.

Sample is a subset of a population (Bougie, 2003).

A sample is a subgroup of a population (Frey, et al., 125)

A sample represents some selected elements of a

population in a given time.

For instance, the total number of production companies in

Afghanistan round to 1000, a researcher may not study all

of the 1000 due to time, cost and other limiting factors, but

he studies 200 out of it. The 200 is the sample of a 1000

population.

Sample

As we agreed that a sample a subset or friction of

population, then we can statistically express them as:

Sample Population

Statistics Parameters

=PopulationMean

=

=PopulationStandardDeviation

=

2 = 2 =PopulationVariance

Estimates

Parameters

The characteristics of a population , , 2 are called

the parameters of a population.

, 2 are called the

estimate of the parameters.

the parameters of the population and the estimates

of the sample.

Types of Sampling

Sampling

Probability Non-Probability

Sampling Sampling

Simple

Stratified Convenience Quota

Random

Sampling Sampling Sampling

Sampling

Sampling Sampling Sampling Sampling

Probability Sampling

Simple Random Sampling

Is a method of sampling in which, every member of the

population (N) has an equal chance of being selected for the

sample (n).

Stratified Sampling

This is a method in which, the whole population is split into

non-overlapping groups (Strata) then simple random

sampling is performed on each group to determine the

sample.

Probability Sampling

Systematic Sampling

This is a sampling method in which, every nth element or

subject of the population is selected for the required sample.

For example, to select a sample of 121 buyers from the whole

population of buyers from Finest Super Market. we set a

criteria of nth (7th) that every 7 buyer will be selected for our

sample till it gets to the required sample size (121).

Cluster Sampling

In this method, the population of research may be of different

section from which the sample must be drawn. For instance,

we may take our sample that should represent the population

from north, south, east, west and central zones of the

Afghanistan.

Non-probability Sampling

Convenience Sampling

Convenience sampling or Voluntary response sampling is the

easiest way to obtain individuals from a population to be

placed in the sample. Often, the individuals opt to be part of

the sample.

Judgmental Sampling

Judgmental or purposiveness sampling is a method in which,

the sample is selected from a population on a certain and

specific purpose.

Non-probability Sampling

Quota Sampling

Quota sampling is a type of sampling in which, the sample

size (n) is initially determined and quoted to be picked up

from the population.

Snowball Sampling

Snowball or reference sampling is a method in which, the

sample is selected to represent to population on a matter of

reference. For example, one respondent may refer the

researcher to another potential respondent of the same nature

so the sample size gets bigger till it comes to sufficiency.

Selecting Sample Size

Selecting sufficient appropriate size of a sample

that fairly represent a population depends on how it

takes place. For rationality, we use the following

equation to choose a sample size:

(2 )

=

2

confidence interval, 2 is the population standard

deviation and 2 is the error squared.

Selecting Sample Size

Suppose we have the following information available

on the basis of which, we can compute the sample

size:

= 1.96, = 20 and E = 4, then we derive the sample

size as

(2 ) 1.962 (202 )

= 2

= 2

= 96

4

So, the sample size is computed to be 96. you should

remember that as much as the std. dev. Increases the

sample size increases too.

Selecting Sample Size

Look at the following graph:

Sample Size

300

250

Sample Size = 216

200

150

100

Sample Size = 54

50

0 5 10 15 20 25 30 35

Std. Dev.

Chapter 4

Literature Review

Learning Objectives:

Upon completion of this chapter, you will understand the following topics:

1) What is a literature review

2) Characteristics of literature review

3) Steps in conducting a literature review

4) Citation and Referencing in the literature

What is a LR

This chapter is of high value to potential researchers and

students of your level in understanding the research

literature review.

The LR is the foundation for your research theoretical

framework without which, a research is of no importance

and value.

By this chapter, most of the misconceptions must be

resolved with the term Literature Review.

Soon, we see that what a LR is and what it is not?

What is a LR

A literature review is the identification and review of

significant published and unpublished research works

collected from the secondary source of data relevant to the

topic of concern.

The collection and review of literature consists of research

papers, books, journals, conference papers and working

papers in order to discover what similar has already been

done before and what gaps are left behind in those studies.

A literature review exhibits how much contribution has

been done by other researchers and scholars and how your

research can add value to that specific area.

What is a LR

A literature review is not a chronological list of researches

done by others.

A literature review is not only to show what has been

studied before but it is to be critically analyzed so can the

gap be found and the base for your research is theoretically

and logically founded.

A literature review is to prevail knowledge about the topic

of your interest. Remember! That you are not the first and

not consequently the last person who conducts research in

that topic. There are many other who have done that

before. Therefore, LR supports you not to repeat the same

thing as it is already there.

Features of a LR

According to Bougie (2003) a good LR ensures that:

1) Important variables that are likely to influence the

problem situation are not left out of the study.

2) It helps to develop a rationale theoretical framework

3) It helps and supports in designing your research paper

4) It helps to test your hypothesis

5) It helps rediscovering a new thing from an existing

phenomena.

6) It prevents repetition of the same findings

Steps in Conducting a LR

The following are the generally accepted principles in

conducting a literature review:

Manual Online

Review Brows into

Relevant Books internet

Copy the

Collect the main

abstracts and

theories behind

conclusion of

your topic

the papers

Analyze the findings and

theories results

Write them out left behind and

note them

Documenting a LR

A good LR is to help the researcher in developing a good

problem statement and to identify the important variables

and document significant findings from earlier research

which serves as the foundation on which the theoretical

framework is built.

Accurate and transparent documentation of the researches

done by others is of the research ethics.

Plagiarism is strongly prohibited in any small and large

research studies.

A plagiarized paper has no value.

Universities, journal publishers and research organizations

use plagiarism detection software that tackles with this

problem.

Citation and Referencing

To avoid plagiarism and to accurately cite the work of

others, there are several accepted and international

methods of citation that we discuss few of them as given

below:

APA MLA Chicago

APA (American MLA (Modern Is a referencing and

Psychological Language citation method

Association) is a Association) is accepted worldwide

widely used another popular and and is used in

referencing and mostly used method research papers.

citation method in of referencing and

research papers. citation method in

research papers.

Citation and Referencing

Before starting to describe anyone of the methods, you

should know that there are two main issues:

Citation: Providing an accurate and summarized particulars of the

writer in the text which is called in-text citation.

Reference: The works cited throughout the paper, shall be reflected

at the end of the paper in an alphabetically approach which is

called the Reference / Bibliography.

Furthermore, there are another two issues that you are

concerned with:

Direct Quotation: A direct quotation is the reflection of the same

thing said by the original author that shall not be more than 40

words.

Indirect Quotation: An indirect quotation is the reflection of your

analysis from the work of other author with changed words and

sentence approach.

Citation and Referencing

Example of Direct Quotation

In-Text Citation

The implementation of neoliberal economic system had affected the

overall financial trading in the Arab emerging financial and economic

market (Azimi, 2016).

The Arab emerging financial and economic market is affected by adapting

the neoliberal economic system (Azimi, 2016).

Reference

Azimi, Mohammad Naim (2016). The effect of neoliberal economics on

Arab emerging financial market. International Journal of Economics and

Finance, Vol. 6 (1). pp 141-149.

APA Style

APA (American Psychological Association) is the most

popular and widely used in formatting a research papers

worldwide.

In-Text Citation

Azimi (2016) argues that the Afghan GDP per capita is non-stationary and thus it

follow unit root.

According to Azimi (2016) the Afghan GDP per capita follows unit root and it is

non-stationary.

The Afghan Real GDP per capita is non-stationary and thus it follows unit root

(Azimi, 2016).

APA Style

How to reference this in the list of reference at the end of the

paper, see the APA referencing style as given below:

References

Azimi, Mohammad Naim (2016). A Unit Root Hypothesis: Is

Afghanistan Real GDP per capita Stationary? Journal of

Economic and Business Research, Vol. 1(1). pp 1-6.

MLA Style

MLA style specifies guidelines for formatting manuscripts

and using the English language in writing. MLA style also

provides writers with a system for referencing their sources

through parenthetical citation in their essays and Works Cited

pages (see, https://owl.english.purdue.edu/owl/resource/747/01/).

Bestul suggests that, The large number of papers show that the work was

popular and widely read into the 16th century (92).

The large number of papers show that the work was popular and widely

read into the 16th century (Betsul 92).

MLA Style

In case if you quote something from another author which is

more than 3 verses then the following method is applicable.

The large number of research papers show that the

book is very famous and is widely used throughout the

16th century and most of its parts have been cited by

many scholars around the globe (Betsul 92).

Reference

Betsul, W.A. The Logic of Human Beings. Social Science

and Its Surrounding. N.p., 1987. 92.

Chicago Style

This is one of the most famous and widely used style for

books and papers formatting and referencing.

In-Text Citation

The large number of papers show that the work was popular

and widely read into the 16th century.1

Reference

Betsul, W.A. 1987. The Logic of Human Beings. In Social

Science and Its Surrounding, 92.

___________________

1. Betsul, W.A. 1987. The Logic of Human Beings. In

Social Science and Its Surrounding, 92.

Citation with more than 1 and 2

authors (APA Style)

You will need to ensure to correctly provide the citation in

your paper. We have already seen the citation with one author

but how we can quote if there are 2, 3, and more authors?

Two authors:

According to Azimi & Karimi (2016) write the quotation

Azimi & Karimi (2016) suggest that write your quotation

Write your quotation (Azimi & Karimi, 2016).

Citation with more than 1 and 2

authors (APA Style)

If there are more than two authors (3, 4, N) then you

should quote like this:

Azimi, et al. (2016) state that write your quotation .

Write your quotation (Azimi, et al., 2016).

Chapter 5

Developing Research Hypothesis

Learning Objectives:

Upon completion of this chapter, you will understand the following:

1) What is a variable?

2) What is a research hypothesis?

3) Simple Vs Complex Hypothesis

4) Null Vs Alternative Hypothesis

What is a research variable?

From this point on, you will come across with

term variable a lot as this builds the base of all

our discussions.

It is advised that you refresh your knowledge of

econometrics and basics of statistics as we come

across the required techniques associated with

numerical approaches to research models.

What is a research variable?

Typically, a variable is an economic and financial

phenomenon that is liable to change over time.

Scientifically, a variable is any factor that is liable

to change and that can be controlled, measured

and predicted.

Statistically, a variable is a factor liable to change

and that is denoted either by letter x or y. The y

thus changes over the course of x.

Some Notations

Variable X Variable Y

Research Hypothesis

We now look at some definitions for hypothesis:

predicts what you expect to find in your empirical data

(Bougie, 2003).

A research hypothesis is the statement created by

researchers when they speculate upon the outcome of a

research or experiment (Shuttleworth, 2016).

A hypothesis is a specific and testable prediction.

Types of Hypothesis

Typically, a research hypothesis can be divided into the

following categories:

1. Simple Hypothesis

2. Complex Hypothesis

3. Null Hypothesis

4. Alternative Hypothesis

Simple Hypothesis

A simple hypothesis is the one in which, there are only two

variables (dependent and explanatory) that a researcher seeks

to investigate any associationship between them.

For example:

An increase in GDP per capita leads to household monthly

expenditures.

Or

The increase / decrease in cost of sales causes the sales price

to significantly change.

Complex Hypothesis

A complex hypothesis is developed by a researcher when

he/she intends to investigate the relationship between more

than two variables and the causes running from them.

For example:

An increase / decrease in cost of sales leads the sales price to

increase, sales volume to decrease and labor turnover to

increase.

Or

The higher ratio of unemployment leads to greater poverty,

illiteracy, higher ratio of crimes, robbery and killings

Null Hypothesis

A null hypothesis is the statement of equality developed by a

researcher and is assumed to be true until statistical evidence

in the form of a hypothesis test supports in rejecting the null

hypothesis.

The term null is used to nullify or invalidate (reject) the

hypothesis developed by researcher unless the statistical

supports indicate otherwise.

0 :

Alternative Hypothesis

An alternative hypothesis is the one which is developed in

contrast with the null hypothesis.

Remember that the rejection of null hypothesis is in direct

favor of the alternative hypothesis.

:

Chapter 6

Test of Hypothesis

Learning Objectives

By completing this unit, you will understand the following main issues:

1) Introduction to testing alternatives

2) Parametric Hypothesis Testing

1) F test / ANOVA

2) t test

3) z test

4) Pearsons Correlation

3) Non-Parametric Hypothesis Testing

1) Wilcoxon Test

2) Mann-Whitney Test

3) Kruskal Wallis Test

4) Spearmans Correlation

An Overview

In the previous unit, we stated that the base of any research

paper is the construction and testing of research

hypothesis.

Hypothesizing a phenomenon leads the scholar to follow a

uniform pathway to conduct, test, achieve findings and

conclude the research.

We have also seen that how hypothesis are developed in

the light of a research problem.

In this chapter, we pay core attention in developing and as

well as testing research hypothesis using both qualitative

and quantitative alternatives.

Introduction to Testing alt.

A testing alternative is the set of testing models that

involve econometrics and statistical techniques.

Selecting an appropriate and logical testing model to apply

for testing a concerned hypothesis is of high value and

importance since, the ultimate research result is generated

from this process.

Selecting the appropriate testing procedures is one of the

crucial task a researcher is ought to decide.

Testing Tools and Measures

There are several tools and measures used to test the

hypothesis in a research.

Parametric Non-Parametric

F test / Wilcoxon

ANOVA test

Whitney

Z test

test

Kruskal

2 test

test

Pearson Spearman

Correlation Correlation

Parametric Hypothesis test

In parametric hypothesis test, it is assumed that the

observations in a particular sample is normally distributed

(known as Gaussian distribution).

and are parameterized by mean and standard deviation.

That means if you know the mean and standard deviation,

and that the distribution is normal, you know the

probability of any future observation.

F Test

The variance analysis F test is one of the testing models

that fits under the parametric hypothesis testing criteria.

To understand the practical application of this model

requires us to solve an example, we create 3 samples of

employment distort at a workplace. See the sample data.

Sample 1 Sample 2 Sample 3

2 10 10

3 8 13

7 7 14

2 5 13

6 10 15

F Test

We apply the F test to test the following hypothesis:

0 :

:

and then determine the variance between the groups and

within the group on the basis of which, we compute the

Total Sum of Square.

Distribution table to see whether the null can be rejected.

F Test

Calculating the Sum of Square Within the Groups:

S1

dif S2

dif S3

dif

2 4 -2 4 10 8 2 4 10 13 -3 9

3 4 -1 1 8 8 0 0 13 13 0 0

7 4 3 9 7 8 -1 1 14 13 1 1

2 4 -2 4 5 8 -3 9 13 13 0 0

6 4 2 4 10 8 2 4 15 13 2 4

4 22 8 18 13 14

Sum of Square Within the Group or SSW = 22+18+14 = 54

F Test

Now we calculate the Total Sum of Square as given below:

S

2 3 7 2 6 10 8 7 5 10 10 13 14 13 15 8.3

1-3

8.3 8.3 8.3 8.3 8.3 8.3 8.3 8.3 8.3 8.3 8.3 8.3 8.3 8.3 8.3

Diff -6.3 -5.3 -1.3 -6.3 -2.3 1.7 -0.3 -1.3 -3.3 1.7 1.7 4.7 5.7 4.7 6.7

2 39.69 28.09 1.69 39.69 5.29 2.89 .09 1.69 10.89 2.89 2.89 22.09 32.49 22.09 44.89 258.55

F Test

Now we calculate the Sum of Square Between the Group as

given below:

1. We take the mean of each individual group and subtract

from the mean of total group.

2. Once we determine the above variance, we square it, sum

it and multiply it by the number of observation in a group.

Individual group Mean Total Mean: 4 8.3 = -4.3

8 8.3 = -0.3

13 8.3 = 4.7

= (4.3)2 + (0.3)2 + (4.7)2 5 = 203.35

F Test

So, now perform the final calculations and dividing the SSB by the

Degree of Freedom or (number of groups minus 1) and the SSW by

Degree of Freedom or (number of observation minus the groups).

See the following:

203.3

= = = 101.65

1 2

54

= =

12

101.65

= = 22.59

4.5

F Test

F Ratio (2,12)= 22.59 p <.05

Rejection Region

95% Reject the null

Z Test

Z test or Z score is a test of hypothesis that measures the

distance of raw scores from the mean.

the right hand side of the bell curve.

Z Test

Lets solve a problem with regards to Z score or Z test.

Suppose we have a sample of data with the following

observations: 17, 15, 23, 7, 9 and 13.

Required:

1) Calculate the sample variance

2) Calculate the sample standard deviation

3) Calculate the Z score and test the hypothesis at 95%

confidence interval.

Z Test

Let us first tackle the requirement 1 and 2 and then calculate

the Z score and test the hypothesis.

To calculate the sample variance, use the following equation:

2

2 =

1

2

17 14 3 9

15 14 1 1

23 14 9 81

7 14 -7 49

9 14 -5 25

13 14 -1 1

Sum 166

Z Test

So, lets calculate the sample variance and the sample

standard deviation using the given equation:

2

2

166

= = 33.2

1 5

= 2 = 33.2 = 5.76

6 14

= = = 1.39

5.76

Now we look at the z table and compare our z score p-value

with the p-value at 95% confidence interval.

Z Test

We draw a bell curve first and put in the obtained value both

from the z score including its corresponding p-value and the

p-value at 95% confidence interval of two tailed distribution.

0.95

0.025 0.025

-1.96 6 14 1.96

Z score -1.39

P-value 0.735

Cannot Reject the Null Hypothesis

Test

The another test of hypothesis under the parametric

hypothesis criteria is the chi-square test.

We now solve a problem to illustrate the practical

application of chi-square test.

Suppose we have four types of products that we expected

to sale 1,600 units of all in aggregate during the month

February but the actual sales volume were:

Test

Using the chi square method, we now test the following

hypothesis:

0 : = = =

:

as:

( ) 2

2 =

Where O stands for Observed or actual, E presents the

Expected volume of sales in our example.

Test

Lets calculate the values for nominator of the equation

given in the previous slide.

Super

Products Coca-Cola Pepsi Three G

Cola

41 4 2 -47

( )2 1681 16 4 2209

( )2

= 9.77

Test

2 3 = 9.77, < 0.05

2 3 > 7.81

Rejection Region

95% Reject the null

2 7.81 9.77

Pearson Correlation

Under the stated criteria for parametric hypothesis testing,

we can also investigate relationship between two variables

for which we use the Pearson Correlation.

A Correlation is a statistical method of econometrics

applied to measure the strength of relationship between the

two variables and treat the two variables symmetrically

where there is no distinction between the dependent and

the independent variable. The equation of Pearson

Correlation is given as:

n xy x y

r

n x2 x n y2 y

2 2

Pearson Correlation

n xy x y

r

n x2 x n y2 y

2 2

where

n number of observation for a given variable

x the explanatory variable (unemployment)

y the dependent variable (interest rate)

Here is the data

Unemp 50 43 38 35 25 20 15

Int 10 22 28 35 44 48 50

Pearson Correlation

In order to calculate the correlation coefficient of the given

variables using the data in table, we first need to determine

the values for components stated in the formulae as follow:

Unemp(x) Int(y) X2 Y2 XY

50 10 2500 100 500

43 22 1849 484 946

38 28 1444 784 1064

35 35 1225 1225 1225

25 44 625 1936 1100

20 48 400 2304 960

15 50 225 2500 750

226 237 8268 9333 6545

Pearson Correlation

Now we can use the formulae to derive the

result as given below:

7(6545) (226)(237)

r= 2 2

7 8268 226 7 9333 237

= 0.9814

Significant negative relationship between the

variables.

Pearson Correlation

In addition, we can also plot the variables on scatter plot as

shown below:

50

45

40

Interest

35

30

25

20

15

Unemp.

0 15 20 25 30 35 40 45 50

Pearson Correlation

We test the data with a hypothesized positive relationship

between the unemployment and the interest rate, though

the statistical result we obtained shows a rather significant

negative associationship between the stated variables.

If we use a statistical software (say, SPSS), the same

results can be obtained as given below:

Pearson Correlation

Reminder

You should now feel to refresh your statistics skills but I

rather state few of them here:

1. In the correlation coefficient test, the result is always from

-1 to 1.

2. It is just used to investigate the relationship between the

variables but does not produce causality relationship.

3. The closer the R-square is, the stronger the relationship is

(both negative and positive).

4. Correlation coefficient is computed as an initial testing

procedure for more complex research papers.

Non-Parametric

We recently stated that there are two types of criterion,

parametric and non-parametric hypothesis tests.

We covered the parametric tests and turn our focus on non-

parametric hypothesis test models.

The non-parametric hypothesis test criteria underlines that

the sample is not normally distributed within the series.

The three types of tests that we cover in this course are

majorly based on ranking approach so can the rationale

decisions be made upon their results.

Wilcoxon Test

In non-parametric hypothesis tests, we assume that the data

are not complying with the requirements of Gaussian

Distribution and they are independent of one another.

The first test which always comes up for testing such data

is the Wilcoxon Sum of Ranked test which we also apply

in this course.

Since, the MBA course is mostly practice based

approach, we ignore the rest of definition formalities and

go right on solving a problem using the test.

Wilcoxon Test

We are provided with the following set of sample data

from the same population (Product A and B). The customer

satisfaction on a scale of 1 to 10 is given as below:

Product A Product B

20 27

19 23

23 19

21 25

19 18

22 24

17

Wilcoxon Test

Using and testing the data by Wilcoxon method, we test the

following hypothesis:

0 :

:

To begin with testing, we arrange the data horizontally and

rank them.

Ob 17 18 19 19 19 20 21 22 23 23 24 25 27

1 2 3 4 5 6 7 8 9 10 11 12 13

R 1 1 4 4 4 6 7 8 9.5 9.5 11 12 13

Wilcoxon Test

Lets put in the ranks into the samples.

Obs. Rank Obs. Rank

20 6 27 13

23 9.5 19 4

19 4 23 9.5

21 7 25 12

19 4 18 2

22 8 24 11

17 1

1 38.5 2 52.5

Wilcoxon Test

Remember that the test statistics is the sum of ranks whose

observation is lower than the other samples. In our

example, the sum of ranks of A is the test statistics.

= 1 = 38.5

30 and 40 at 0.05.

6,7 30, < 0.05

1 6,7 = 38.5 > 30, < 0.05

So we fail to reject the null and conclude that A and B are

identical.

Mann-Whitney Test

Mann-Whitney U test is performed on set of data that are

not satisfying the requirements of normal distribution and

that are ordinal by nature.

The equation we use to compute the Mann-Whitney U test

is given as:

= 2

+ +1

12

The comparison of critical value is based on z table.

Mann-Whitney Test

Suppose we have the following set of data and want to test

the hypothesis:

0 :

:

The data we have is here:

A B

28 12

31 18

36 19

35 14

32 20

33 19

Mann-Whitney Test

So, we arrange the data first and assign the required ranks.

Rank Score Sample Point

1 12 (B) 6

2 14 (B) 6

3 18 (B) 6

4.5 19 (B) 6

4.5 19 (B) 6

6 20 (B) 6

7 28 (A) 0

8 31 (A) 0

9 32 (A) 0

10 33 (A) 0

11 35 (A) 0

12 36 (A) 0

Mann-Whitney Test

Lets put the data into the equation.

= 06 + 06 + 06 + 06 + 06 + 06 =0

= 2

+ +1

12

(6)(6)

0

= 2 = 2.88

(6)(6) 6 + 6 + 1

12

So, the z value for Mann-Whitney test is -2.88 which is greater than the -

1.69 the rejection area on the basis of which, we reject the null.

Kruskal-Wallis Test

A Kruskal test also known One Way ANOVA test is

performed on set of data that are not satisfying the

requirements of F test that means they are not normally

distributed.

The test is usually performed on ordinal (ranked) data.

The Kruskal equation can be written as:

12 2

= 3 +1

+1

and they are given as:

Kruskal-Wallis Test

Remember that our original data are ordinal. We test the

following hypothesis at 0.05 (95% Confidence Interval):

0 : 3

: 3

14 10 17

1 6 16

3 8 2

9 18 13

5 11 15

7 12 4

Kruskal-Wallis Test

In order to compute the Kruskal, we determine the values of

the equation as follow:

14 10 17

1 6 16

3 8 2

9 18 13

5 11 15

7 12 4

T=39 65 67

n=6 6 6

N= (6 x 3) = 18

Kruskal-Wallis Test

12 2

= 3 +1

+1

= + + 3 18 + 1

18 18 + 1 6 6 6

= 0.0351 1705.84 3 19

= 59.8538 57 = 2.8538

Now we look at the 2 distribution table for critical value

which is 5.99 and if the H > 2 we reject the null.

In this case, we fail to reject the null.

Spearmans Correlation

A Spearmans correlation is almost the same as the

Pearsons correlation with a distinctive difference of

normal distribution matter.

between two variables.

Pearsons which falls between -1 to +1, where the negative

sign indicates negative correlation and positive sign shows

the positive correlation between the variables.

Spearmans Correlation

Suppose we have two products A and B. Where A is the

main product and B is a supplementary product which

doesnt necessitate the customers to buy it but still it is of

good use along with A product. The data are given below:

Observation Product B Product A

Day 1 73 77

Day 2 76 78

Day 3 78 79

Day 4 65 80

Day 5 86 86

Day 6 82 89

Day 7 91 95

Spearmans Correlation

To compute the Spearmans correlation, use the following

equation:

6 2

= 1

(2 1)

Where 6 is constant, d represents the difference between the

values of two variables.

You should be clear enough that our variables are sales

volume of products A and B and we test the following

hypothesis:

0 :

:

Spearmans Correlation

Now we arrange the data to put them in the equation.

Observation Ranking

Date (X-Y)

A B X Y

D1 77 73 7 6 1 1

D2 78 76 6 5 1 1

D3 79 78 5 4 1 1

D4 80 65 4 7 -3 9

D5 86 86 3 2 1 1

D6 89 82 2 3 -1 1

D7 95 91 1 1 0 0

Sum 14

Spearmans Correlation

We now put in the data into the equation.

6 2

= 1

(2 1)

6 14

= 1

7 492 1

84

=1 = 0.75

336

indicates a very strong positive correlation between the

variables on the basis of which, we cannot reject the null.

Regression Overview

We now turn our focus on a little more complex hypothesis

and the way to test it.

Causality relationship

Suppose that there are two variables (let X be the explanatory

and Y the dependent variable). We assume that X causes Y to

change. For testing such hypothesis, we typically, compute

the regression analysis.

Regression Overview

What is a regression analysis?

A regression analysis is a statistical model which is applied to

measure the associationship between two variables

(dependent and independent variables) in which, the

dependent variable is treated as random or stochastic with an

assumption to have probability distribution whereas the

explanatory variable values are assumed to be known and

fixed. The essential idea is to estimate and evaluate two or

more variables to have some kind of relationships in a

particular way.

Regression Overview

The simplest equation for regression can be expressed as

follow:

yi 0 1 x1

Where beta zero and beta one are the intercept and slope of

explanatory variable trying to estimate the given variable y.

looking at the equation and the nature of data we collect for

the purpose of our research is a little misleading where there

is always some kinds of disturbance and error associated with

the data that must be taken into account. In econometrics, we

extend the equation with the view of this fact and express as:

yi 0 1 x1 ui

Regression Overview

We hypothesize that export as a significant factor which

drives the Afghan GDP for the purpose of its testing, we

collect the following data. Export is the independent variable

and GDP is the dependent variable.

X (Export) Y(GDP)

1 2

2 4

3 5

4 4

5 5

Regression Overview

Now we calculate the regression analysis and test the

developed hypothesis. See the following for step by step

guide.

X Y 2

)(

1 2 -2 -2 4 4

2 4 -1 0 1 0

3 5 0 1 0 0

4 4 1 0 1 0

5 5 2 1 4 2

Mean 3 4 10 6

6

1 = 2

= = 0.6

10

1 20 0.6 15

0 = = = 2.2

5

Regression Overview

So by this, we obtain:

= 2.2 + .6

that X (export) variable varies. See the following:

= 2.2 + .6 6

= 5.8

We can clearly see that the export variable causes the GDP

over time. In addition, we can also determine the fitted value

of the regression line and compare with the actual values of

GDP and export. See the next slide.

Regression Overview

We now predict the GDP values given by

export and draw the regression line on a

scatter plot. GDP Estimated

5

= 2.2 + .6 1 = 2.8

4

= 2.2 + .6 2 = 3.4

3

= 2.2 + .6 3 = 4.0 2.2

2

= 2.2 + .6 4 = 4.6 Actual

1

= 2.2 + .6 5 = 5.2

0 1 2 3 4 5 EXP

Chapter 7

Interpretation and Research

Report Writing

Learning Objectives

Upon completion of this chapter, you will demonstrate understanding the

following issues:

1) How to interpret research findings

2) What is a research report layout

Introduction

All readers and potential recipients of your research do not

hold education of the same field and level of you.

People expect to read easy read report to understand and

make decisions upon.

At the workplace, it is not necessary that everyone should

be a researcher so can understand your technical approach

to conclusion of your research and its results.

Therefore, every technical aspect of a research whether

more or less, should be effectively interpreted and reported

in accordance with an acceptable format.

What is Interpretation

An interpretation of a research is the general discussion of

application of research methods and the researchers

findings.

As stated, an effective communication of the research

results and findings can lead the sponsors to make their

decisions otherwise, the efforts you put up to conduct a

research is of no value.

On the basis of my own experience and the

recommendations I received from international research

reviewers, commentators and editors of high-peered

journals, I have developed an interpretation structure that

we discuss herein.

Descriptive Statistics

A three line tabulate approach to present the descriptive

statistics can help the reader to understand the nature, size

and source of your variables and data used in a research.

This is mostly presented at the very beginning of the data

collection part or sometime it is combined with research

analysis section.

A descriptive statistics usually contains the following

heads: Name and Nature of the Variables, number of

observations, Mean, Median, Standard Deviation, Normal

distribution, Minimum and Maximum information.

Descriptive Statistics

Below I provide you with a descriptive statistics table which is globally accepted

in the research articles.

Table 1: Descriptive Statistics

Variables at level Variables at First Difference

(Trade) (SPC) (Trade) (SPC)

Minimum 34.123 11.314 -8.8521 [8.8521]

Maximum 84.532 47.067 21.056 7.0192

Mean 58.018 26.852 0.58240 0.56064

Standard Dev. 14.628 10.653 5.6851 2.7875

Skewness 0.14305 0.0089913 0.71190 [0.50677]

Kurtosis [1.1837] [1.4233] 2.0202 1.6027

P-value of Normality 0.1886 0.1023 0.0967 0.0670

Correlation Trade SPC 1.0000 0.567*** - -

Table 1 presents the descriptive statistics for our two endogenous variables both at

level and at first difference. The computation of Pearson r model exhibits a

significant linear correlation between the variables (see, Figure 1[d]) which invites

suspiciousness of existing cointegration among the stated variables. The variables

also show no serial correlation and Arch effect and they both are normally

distributed within the series.

Discussion on Findings

You will need to ensure that each of the computed models

is presented in a tabulate format and each table must be

numbered sequentially.

Based on common practice, each table and figure must be

generally discussed and findings should be clearly and

evidentially interpreted.

Technical terms must be interpreted so as the reader can

understand what does each term mean.

The crucial task is the presentation of findings of

numerical data with the application of the testing models

along with appended results.

Discussion on Findings

See an example.

Table 2: Augmented Dickey Fuller test

Variable t-statistics Critical Value @5% P-value

Residual [2.610796] [2.917650] 0.0972

5% [2.917650] with a corresponding p-value of 0.0972 >

0.05 on the basis of which, we cannot reject the null

proposition , rather we accept it. The test shows that the

residuals follow unit root and they are non-stationary caused

by any structural break and level shift throughout the series

(see for simulative case, Pala, 2013).

Writing Research Conclusion

As a researcher, a report of a research should contain a

section for conclusion in which, all the evidentially

research findings are sequentially connected and concluded

so as the reader understands what is done and what is

recommended for future decisions.

Chapter 8

Research Proposal

Adopted from Kumar, 2005. Research Methodology

Learning Objectives

Upon completion of this chapter, you will be able to discuss the following

topics:

1)The Purpose of a research proposal in qualitative and quantitative

research

2)The structure of a research proposal

3)Writing a research proposal

Introduction

All research endeavors in both qualitative and quantitative

research, in every academic and professional field are

preceded by a research proposal.

It provides an overall but concise information about your

research process conceptualization, objectives, scope and

limitations including the method you approach to conduct

the research and present your findings.

So, a research proposal can be defined as an overall plan,

scheme, structure and strategy designed to obtain answers

to the research question and problems that constitutes your

research project.

Objective of RP

Mainly, there are three objectives that a research proposal

must be developed. Though, the format of a research

proposal may differ from University to University and

from department to department or field of specialization.

How you plan Why you

proposing to

to do it? want to do it?

do?

Contents of a RP

A research proposal of any nature should contain the following contents:

1) An introduction, including a brief literature review

2) The underpinning theoretical framework

3) Conceptual framework that constitutes the base of research

4) Objective of research questions

5) Scope and Limitations / Delimitations

6) Research hypothesis

7) Research method and measurement instruments

8) Data and data collection method

9) Chapter of report

10) Proposed time plan

11) Contingency and Risk Plan

12) Financial Budget of the research

The End

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