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Bakhtar University

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)

[2]. Data Collection

[3]. Sampling and Sampling Techniques

[4]. Literature Review

[5]. Developing Research Hypothesis

[6]. Test of Research Hypothesis

[7]. Data Interpretation and Research Report

[8]. Research Proposal


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

Specific to Business General to all fields of


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.

2) Applied Research: is a form of systematic inquiry


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

Research Selecting type


Data
Design and Size of
Collection
Decision Sample

Select Interpret and


Test
Research Report the
Hypothesis
Method Findings
Types of Research Design
Research Design
Exploratory Conclusive

Quantitative Qualitative Descriptive Causality

Direct Indirect
Approach Approach

Focus Depth Projective


Group Interview Techniques

Free word Sentence Story Cartoon


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.

1) The Companys turnover had a downward slope


during 2015.
Quantitative Research
The systematic approach to test a research
hypothesis by deploying statistical, mathematical
and computational techniques.

The Afghan Real Per Capita GDP is non-stationary*.

* Look at this: http://ssrn.com/abstract=2682935


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.

Financial Scandals are caused by ethical fragility of accountants at


workplace*.

*Look at this: http://econpapers.repec.org/paper/pramprapa/69532.htm


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

Describes population data and major emphasis is on deciding a


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.

Rigor Precision and Parsimony


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.

In other word, the research population is the total number


of investigable objects that a researcher intends to make
inference.

For example, a company wants to know that what


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.

The characteristics of a sample ,


, 2 are called the
estimate of the parameters.

We use the measure of central tendency to measure


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

Systematic Cluster Snowball Judgmental


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

Where n stands for sample size, is the 95%


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

Summarize and Analyze their


Analyze the findings and
theories results

Find any gaps


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).

Example of Indirect Quotation


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/).

An example of MLA in-text citation:


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:

According to Azimi, et al. (2016) write your quotation .


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

Independent Variable Dependent Variable

Exogenous Variable Endogenous Variable

Explanatory Variable Explained Variable

Control Variable Controlled Variable

Predictor Variable Predictand Variable

Regressor Variable Regressand Variable

Stimulus Variable Response Variable


Research Hypothesis
We now look at some definitions for hypothesis:

Hypothesis is a tentative, yet testable statement which


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

We shall now look at each one separately.


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.

The null hypothesis (hereinafter refers to as H0).


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.

The alternative hypothesis (hereinafter refers to as HA).

:
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.

YOU SHOULD ALWAYS REMEMBER THE GIGO


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).

The normal family of distributions all have the same shape


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 :
:

First we need to calculate the variance of all the samples


and then determine the variance between the groups and
within the group on the basis of which, we compute the
Total Sum of Square.

The results we obtain will be matched against the F-


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

Total Sum of Square or SST = 257.35


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

By this, the F test result is 22.59.


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

Rejection Region
95% Reject the null

F Ratio 3.89 22.59


Z Test
Z test or Z score is a test of hypothesis that measures the
distance of raw scores from the mean.

Is a unit of measure in standard deviation.

Z score is always equal to 0 at the mean.

Z score is always negative to the left side and positive at


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:

Coca-Cola Super Cola Pepsi Three G

441 404 402 353


Test
Using the chi square method, we now test the following
hypothesis:
0 : = = =
:

The equation for computing the chi-square test is expressed


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

O 441 404 402 353

E 400 400 400 400

41 4 2 -47

( )2 1681 16 4 2209

( )2 / 4.20 0.04 0.01 5.52

( )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

Alright, the statistical results of test shows a


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

The critical value given Wilcoxon for 6 and 7 observation is


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

We have collected a set of data which presents three samples


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

12 392 652 672


= + + 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.

It is also used to investigate and determine the correlation


between two variables.

The assumption underpinning the correlation is the same as


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

So, the result obtained from the Spearmans correlation


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

Now we can predict future values of the Y(GDP) if we assume


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*** - -

Correlation SPC Trade 0.567*** 1.0000 - -

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

The t value for statistics is [2.610796] < the critical value at


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.

What you are


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