Lecture note on International Business and Economics Research, May 23 2014pdf.pdf1.pdf

Lecture on International Business and Economics Research Room: 5116, 15:30

May 23, 2014

Muhammedamin Hussen Saad PhD fellow and Visiting Scholar, KU Leuven, FEB @ HUB, Centre of

Entrepreneurship Research Haramaya University, Ethiopia

Email : [email protected]

1 International Business and Economics Research

• What is Research?

• Contents of Research Proposal

• Search strategies: Literature and Data

• Conclusion of Lecture

Outline of Lecture


•Greener, S. (2008) Introduction to Business Research

Methods, Ventus Publishing. FREE download:

http://bookboon.com/uk/student/management/introduction-

to-research-methods

•Saunders, M., Lewis, P. and Thornhill, A. (2007) Research

Methods for Business Students, (4th ed.), Prentice Hall -

Financial Times.

References Books:


http://bookboon.com/uk/student/management/introduction-to-research-methods








What is Research about?


Ok Let’s Begin………..

•The systematic investigation into and study of materials and

sources in order to establish facts and reach new conclusions

(Oxford English dictionary).

•A process of finding out information and investigating the

unknown to solve a problem (Maylor and Blackmon, 2005).

•Something that people undertake in order to find out things in

a systematic way, thereby increasing their knowledge

(Saunders et al.,2007).

General Research Definitions:


Basic Premises of Research


Uncertainty

Information

I don’t know

if we

have demand

for

our products at

Brussels ?

CEO/Manager

VALUE

Decreased uncertainty

Higher likelihood of correct

decisions

Better business performance

Higher profits

Better reputation

COSTS

Research Costs

Delay in Making Business

Decisions

Disclosure of Information

to Rivals

Possibility of Error

Value and Costs of Undertaking Research?


•Dominant are researchers’ personal interests and opportunities

•But researchers differ in the degree to which they are inspired by

The needs of business

The “business community”

knowledge gaps

Academic community

Current discourse

Origins of research problems and questions?


Business and Economics Research

Defined?

Systematic and objective process of generating

information for aid in making business decisions.

Financial, investment portfolio, marketing, HRM,

Entrepreneurship, macro or micro economic issues etc.


Business …

•Used in situations of uncertainty, that is, when decision-makers

face two or more courses of action and seek to select the best

possible alternative under the circumstances.

•Aimed at improving the quality of decision-making which, in

turn, benefits the organization and helps ensure its continuity and

efficiency


Drivers for Business and Economics Research?

” It is a fantastic time to be entering the business

world, because business is going to change more

in the next 10 years than it has in the last 50.”

Bill Gates


Drivers of Business---

International Business and Economics Research 12

• Information overload

• Technology Connectivity

• Shifting global centers of economic-activity and

competition

• Increasing critical scrutiny of big business

• Battle for analytical talent

Examples of Business Research Applications

A firm wants to produce a new product but first wants to ascertain

if there is a potential consumer demand for this product in markets

x,y and z

a multinational firm wants to establish a production facility in

another country after determining its technical-economic feasibility

A financial institution wants to invest in commodities and need a

study of the past trends and forecast future returns

13

When Business Research be Undertaken?

Is sufficient time available?

Is information inadequate?

High importance of decision?

Research benefits greater than costs?

Yes

Yes

Yes

Undertake Business Research

NO Do not

undertake Business Research

14

Tips: How to Choose a good Research Topic


Capability: is it feasible

Is the topic something with which you are really fascinated?

Do you have the necessary research skills to undertake the topic?

Is the research topic achievable within the available time?

Is the research topic achievable within the financial resources ?

Are you reasonably certain of being able to gain access to data?

Appropriateness: Is it worthwhile?

Do the topic fit the specifications and meet the standards set by the

examining professors/institutions?

Does your research topic contain issues that have a clear link to theory?

Are you able to state your research question(s) and objectives clearly?

Will your proposed research be able to provide fresh insights into this

topic?

Does your research topic match your career goals? Outcomes?

International Business Research

Business research is being increasingly applied in an international context

=Globalization + freedom of movement of labor, capital and information

A few Multinational firms- 67% international business

Market knowledge + Overseas market potential

Competition and demand estimation

•Joint ventures, investment and trade overseas requires consideration of example:

Culture and legal environment,

Political stability, security and physical infrastructure

Availability and quality of human resources

Logistics, Trade and investment incentives

16

Note: What's not Research?

•Research isn’t information gathering: Gathering

information from resources such as books or magazines isn’t

research. No contribution to new knowledge.

•Research isn’t the transportation of facts: Merely transporting facts

from one resource to another doesn’t constitute research. It only

might make existing knowledge more accessible

17

General: Characteristics of Good Research

• Purpose clearly defined

‐ ill defined projects become superficial

• Research process detailed

‐ enable others to replicate research

• Research design thoroughly planned

‐ research is often one shot game, no chance to adjust later on

• Limitations frankly revealed

‐ not revealing limitations that others see makes you looking stupid

• High ethical standards applied

‐ doing well by doing good, matter of pride and reputation

• Adequate analysis of decision maker’s need

• Findings presented unambiguously-be clear

• Conclusions justified-What can be documented

18

International Business and Economics

Research 19

• … objective is to obtain information

• … information is collected and analyzed systematically

• … analysis responds to a managerial problem

Consequences

• …. problem-methods -analysis-conclusion-recommendation

Elements of Business Research?

Types of Research-From the view point of

Application

Basic

Applied

Purpose

Reporting/Exploratory

Descriptive

Explanatory

Predictive

Type of Information Sought

Quantitative

Qualitative

20

1. Application View Point

Basic Research

•Attempts to expand the limits of knowledge.

•To test theory or to discover more about a concept.

21

Basic Research Example

Is executive success correlated with high need for achievement?

Are members of highly cohesive work groups more satisfied than

members of less cohesive work groups?

Is there gender difference in family-owned businesses leadership

intention?

22

Applied Research

•Conducted when a decision must be made about a specific real-life

problem.

•The analysis and interpretation of empirical evidence(facts from

observation or experimentation) to confirm or disprove prior

conceptions.

23

Summarizing Applied and Basic Research

Kind of Research Key Characteristics

Basic research Focuses on generating

fundamental knowledge

Applied research Focuses on real-world

questions and applications

24

25

i. Reporting/Exploratory

Research

International Business and Economics Research

oInitial research conducted to

clarify and define the nature of a

problem

oDoes not provide conclusive

evidence

oSubsequent research expected

o Mostly based on desk research,

summarizes research results of third

parties

2. Purpose View Point

Descriptive Research

• Describes characteristics of a population or

phenomenon

• … deals with what questions.

• Some understanding of the nature of the problem


Explanatory


Research 27

• … here it gets academic. Answers why questions and aims to

understand

Predictive/Causal Research

… Very very difficult - requires a lot of pre‐knowledge

Conducted to identify cause and effect relationships

Ex. Quantity demand and Price

Quantity supply and price


Predictive…


Dependent and Independent Variable


Research 30

COMPLETELY CERTAIN ABSOLUTE AMBIGUITY

CAUSAL Exploratory

Which type to choose?

Uncertainty Influences

Exploratory Research Descriptive Research Causal Research

(Unaware of Problem) (Aware of Problem) (Problem Clearly Defined)

“Our sales are declining and “What kind of people are buying “Will buyers purchase more of

we don’t know why.” our product? Who buys our our products in a new

package? competitor’s product?”

Degree of Problem Definition


Reporting: OECD

report shows

that almost 40%

of 23-35 years

old obtained

tertiary

education

Description:

Survey

among HUB

students

shows that

75% do never

fail a course

Explanatory : The

number of

courses failed is

mainly

determined by

the score on the

admission test

and the hours

studies per week

Predictive:

Students with

an admission

score of less

than 83 points

will not

complete their

study

Study types and examples

3. Type of Information Sought


Research 32

Qualitative vs. Quantitative

Quantitative: Descriptive Statistics + Regressions

Econometric Model Specification

Ordinary Least Squares + Categorical Variables

Logit, Probit and Tobit

Consider Data type: Cross-sectional, Panel and Times series

Methodology of Econometrics


Anatomy of classical econometric modeling steps:

Methodology of Econometrics


To illustrate the preceding steps, consider the well-known Keynesian

theory of consumption

1. Statement of Theory or Hypothesis

Keynes states that on average, consumers increase their consumption as their

income increases, but not as much as the increase in their income (MPC < 1).

2. expenditure and (dependent variable)

X = income, (independent, or explanatory variable)

β1 = the intercept

β2 = the slope Specification of the Mathematical Model of Consumption (single-

equation model)

Y = β1 + β2X 0 < β2 < 1 (1)

Y = consumption coefficient

The slope coefficient β2 measures the MPC.

Methodology


3. Specification of the Econometric Model of Consumption

Variables affecting consumption expenditure: income, size of family, ages of the

members in the family, etc., are likely to exert some influence on consumption.

To allow for the inexact relationships between economic variables, (1) is

modified as follows:

Y = β1 + β2X + u (2)

where u, known as the disturbance, or error, term, is a random (stochastic)

variable that has well-defined probabilistic properties.

The disturbance term u may well represent all those factors that affect

consumption but are not taken into account explicitly.

Research

Methods/Design

Sampling

Data

Gathering

Data Processing

and Analysis

Conclusions and

Report

and so on


Problem Discovery

and Definition

Building Blocks of Scientific Research

“The formulation of the problem is often more essential than

its solution” Albert Einstein


Problem Discovery and Definition

State the research questions and objectives

Hypothesis

• A statement that can be refuted by empirical data


Research Methods


If you do not know where you are going,

any road will take you there.

Specifies methods and procedures

• Sampling Techniques and Sample size

• Data Collection Methods

• Data Analysis Techniques

POPULATION

Sample: subset of a larger population

Selecting a Sample


How will sample units be selected? Random or non-random

Who is to be sampled? Random-use statistical formula

•General intuition-Central limit Theorem?

SAMPLE

Example of Sample Frame


Study Population(HUB)

Accounting 1

Management 2

Economics 3

Student

1

Student 2

Student

3

Data Gathering Methods( Primary vs Secondary


• Questionnaire/survey

• Interviews( Structured or Unstructured questions)

• Observation

• Focus Group Discussion(FGD)

Data Processing and Analysis

43

Conclusions and Report Writing

• Effective communication of the research findings

44

International Business and Economics Research

Theorizing

Research Questions

Research Proposal

Research Design Strategy(type, purpose, time frame, scope, environment)

Data collection

Design

Sampling

Design

Instrument Development and Pilot Testing

Data Collection and

Preparation

Data Analysis and

Interpretation

Reporting Management

Decisions

Summary of the

Research Process

Literature

Study

45

2. Research Proposal Components

• Provide a MAP/PLAN how do you want to conduct your study

• A written statement of the research purpose

• Statement of the research question

• Inform about the objective of the study, what is the aim,

what do you want to achieve?

• Brief description of the methodology (design) of the study


Definitions


• To present the question to be researched and its importance

• To discuss the research efforts of others who have worked on

related topics

• To suggest the data necessary for solving the question

• Allows the researcher to plan and review the project’s steps

• Serves as a guide throughout the investigation

• Forces time and budget estimates

Proposal Purpose and Benefits?

Title Page Abstract (on a separate single page) Introduction

Backgrounds of the study

Statement of the Problem/Research Questions

Objectives

Significance/Scope

Literature Review

Methods and Materials/Methodology Sampling Techniques and Size Data Collection Methods

Data Analysis Techniques

Activity Plan

Budget Schedule/Plan

References

Appendices

Research Proposal Formats/Contents


Main Elements of Proposal

Problem Statement Research Objective Literature Review

Research

Methods/Design

Plan (Activity and

Budget)

References


•Problem Statement

Management question + Justification of the Research

•Objective of study

What problem do you solve? How do you contribute to literature?

•Literature Review-What is your theoretical approach? Is there

empirical work on the area?

• Research Methods

Research type?

What is your sample?

How do you collect the data?

• Plan (Activity and Budget)


Main Elements …

• Proposal must be neatly written in appropriate writing style

• Major topics should be easily found and logically organized

• Technical writing style must be clearly understood and explained


Proposal Evaluation criteria

If you want to set up a coffee shop near FEB@ HUB?

1. what is your research topic/title?

2. Identify the problem statement.

3. Identify the objectives?

4. The hypotheses

5. The research methodology.

6. The examples of the Questions/Questionnaire


3. Search Strategies: Literature and Data


• Articles in academic and professional journals

• Reports

• Books

• Secondary information-data base

Literature Sources Available


Literature ---internet


•Browsing:

Browsing means manually examining a document (e.g., a

printed bibliography or an online directory) for useful

information or references (Greenlaw,2006).

• Examples: Reviewing a table of contents of a book/journal;

browsing at http://www.jstor.org => “Browse”

•Use search engines on the World Wide Web or on specialized

databases” (Greenlaw,2006).

–-Tip: Start broad, with a topic, then narrow your search

by using more specific

Keyword searches…


• AND: Search will look for anything with all the terms

• OR: Search will look for anything with any of the terms

• NOT: Search will omit anything with these terms

Tool for focusing searches-Operators: AND, OR, NOT

57 International Business and Economics

Research

– Finding some potentially helpful material

– Evaluating the relevance of the material

– Throwing out the irrelevant material you find

– Working with the remaining relevant material

– Checking the material you are working with for “hints” and

“leads” about other possibly valuable sources

“Filtering”: Successful searching is all about:


Business and Economics Resources: Journals/Data

Secondary sources:

– Google: http://scholar.google.com

– Newspapers’ websites: e.g., BBC, NYTimes, Wall Street and

others

Primary sources: Journal/articles

- KU Leuven ( Libraries, HUB)

- European Union:

EuroStat http://epp.eurostat.ec.europa.eu

- International Monetary Fund (IMF): http://www.imf.org

=> “Data and Statistics”


http://scholar.google.com/







http://epp.eurostat.ec.europa.eu/

Research is a form of learning

It is not easy, but the more time and effort you

put into it, the better will be your results

Some aspects of research are experimental and

“do-it-yourself”

Conclusion of Lecture



Research 61

"The secret of success is to know something nobody else knows“

Aristotle

Piece of Advice: Read more, work hard and Generate new knowledge

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