Research Relating Towards Stock Broking Firms

Research Relating Towards Stock Broking Firms

3.1 Introduction

This chapter discusses an overview of common research methodologies used in the social sciences. The methodology implemented in the study will be implemented afterwards in an online survey along with the explanation of its justification.

The chapter stresses on the research paradigm, research methodology, questionnaire design and survey population including rationale behind choosing the questionnaire and survey population, ethical issues, basis of analysis and lastly the interpretation of the analysis.

The type of research undertaken in this project is descriptive. The primary aim of this research project is to describe the factors that have impact on sub-prime crises on stock brokers in India. The survey data collection strategy was used for primary data collection in this project.

The objective of this chapter has been discussed in subsequent section. Then, research design, this project based on, has been discussed. After that, this chapter discusses the primary and secondary research techniques used for this research study with implicit justification. After that, this chapter explains privacy and ethical issues associated to primary data and, finally the chapter ends with a summarise conclusion.

The overall objective of this chapter is to explain the both how data was collected and analysed afterward. Hence, the prime objective of this chapter is to provide an insight in process that author has used to conduct the primary and secondary data for this research. The other objective of this chapter is to describe the main principles on which the research methodology has been selected and justification of methodology choice.

3.2 Research Paradigm

Research Paradigm is about the perception of the researcher and serves as his/her frame of reference. “Research Paradigm is basis for comprehension, for interpreting social reality” (Crabtree, 1999)

My research hinges around the study of impact of sub-prime crises on stock brokers of Bombay Stock Exchange. On the basis of this understanding a survey will be constructed to gain first hand insights of the issues.

Technical nature of the topic makes it difficult to go for Positivist approach in which data is quantitatively analyzed to draw the conclusion because it is not possible to assign number without adding your own judgement. Interpretive research philosophy is more suitable for this kind of study and hence been chosen for my research.

At the same time my research is exploratory in nature because I am trying to gain more understanding and deep insights of the research topic using both primary and secondary data collection methods. Again exploratory research is supported much better by adopting interpretive approach for research.

3.3 Research Design

When a researcher tends to carry out a research to solve a problem in hand there are three layers that need to be considered prior to design a research methodology/ research strategy. These three layers are research philosophy, research approach, and time horizon (Robson, 2002). The way chosen by researcher to answer the research question will be influenced by researcher’s research philosophy and research approach. Subsequently, the research question notifies the selection of research strategy/ methodology, data collection techniques and data analysis procedures and time horizon deployed for research study. (Saunders et al., 2007: 130-131).

3.3.1 Research Philosophy

This research study has undertaken the positivism research philosophy. Positivists assume that facts cannot be changed by own judgements for example there are one billion people in India. As Saunders et al. (2007) strongly argued that the positivism approach is normally used to study fact in place rather than human attitudes and behaviours. Moreover, a most common attribute of positivists researchers suggested by Saunders at el (2007:103) is that positivist research is undertaken in a value free way as far as possible. Remenyi et al, (1998:33) stated that research subject stands alone neither affecting or affected by the researchers. This philosophy applies to this project since change in researchers would not affect the subject of the research.

3.3.2 Research Approach

In social sciences, a survey is considered as a quantitative methodology whereas a field study is considered as a qualitative methodology. There are four principal research strategies implements in social sciences, namely: experiments, surveys, field researches, and use of secondary data from trusted sources. The goal of all scientific methodology is to explain, predict, and control phenomena. This goal is based upon the assumption that all behaviors and events are orderly and as effects, they have discernable causes. For instance, the phenomenon of productivity and its enhancement in a construction company is possible through identification and control of its causes (Allen Rubin, 2007).

Research methodologies are categorized under overall two approaches to inquiry which are qualitative and quantitative approaches. Quantitative approach is considered as a process inquiry based upon testing a specific theory composed of different variables, which is measured with numbers and usually analyzed using varied statistical techniques. The primary goal of the quantitative methods is determining the extent to which the predictive generalization of any theory is true. The research through quantitative approach generates statistics with the use of a large scale survey research, including different methods like questionnaires and structured interviews. The approach involves extensive narrative data, which is collected in order to gain insights into the phenomena of interests. It includes historical and qualitative studies. Historical studies are defined as the study of pas events whereas qualitative study is defines as the study of current events. Vast amount of numerical data is collected with a view of explaining, predicting, and controlling the phenomena of interest (Difference between qualitative and quantitative research, 2007).

Qualitative research approach is considered as a process of building complex & holistic pictures in the phenomenon of interests, which is conducted in the natural setting. Researcher using qualitative method of research aims to seek a deeper truth. The aim is studying things in their natural setting. Researchers attempt to make sense of and interpret the phenomenon in terms of the meanings people bring to them. The primary goal of qualitative research approach is developing the understanding of human and social problem from multiple perspectives. It further explores attitudes, attitudes, motivations and experiences through methods such as interviews and focus groups, with an attempt of getting in-depth opinion from participants regarding the research topic. Fewer people take part in qualitative research, but the contact with people lasts longer. There are many different methodologies under the umbrella of qualitative research. This approach tends to be subjective in nature, with emphasis on meanings, experiences and description and so on. The information gathered in the qualitative research can be further classified into two categories, namely exploratory and attitudinal.

On the other hand, the quantitative approach in objective in nature. It is defined as inquiry into social and human problem, based on testing hypothesis and comprising of variables, measured with numbers and analyzed using statistical procedures, with a view of determining whether the hypothesis of the theory holds true. The quantitative research approach includes descriptive, co-relational, casual-comparative and experiments studies. The descriptive studies describes current conditions and hypothesis tests, co relational study describing the relationship between various quantifiable variables, casual comparative study establishes cause-effect relationship after the fact, and experimental study investigates cause-effect relationship in the controlled environment. The survey, involving the study of productivity factors in construction industry and test of hypothesis is descriptive according to the above categories (Qualitative Vs Quantitative research, 2007).

According to Naoumi, p.42 the difference between quantitative and qualitative research is rather like the difference between counting the shape and types of design of a sample of green houses as against living in them and feeling the environment. The difference between each one maybe somehow quantifiable but such measurements will not convey the importance and the special impact of some over others. Quantitative research often intervenes and attempts to control as many variables as possible whereas the qualitative research dies not involve intervention and controlling phenomena.

The role of a quantitative research is a fact-finding based on evidence or records, with a distant relationship between researcher and subject. Usually, the scope of finding is Nomothetic. Also, the relationship between theory/ concepts and research are drawn through testing/confirmation. Often, the nature of data in a quantitative research is hard and reliable.

On the other hand, a qualitative research role is looked at as an attitude measurement based on opinions, views and perception measurement, Unlike quantitative, the relationship between researcher and subject is closed and the scope f findings is classified as Idiographic. Moreover, the relationship between theory/ concepts and research is described as emergent/ development with rich and deep nature of data.

The survey measures perceptions of construction practitioners and tests hypotheses regarding the degree of influence of miscellaneous factors on productivity of construction 100 companies. Quantitative approaches are more focused and outcome oriented. One common kind of quantitative methodology includes descriptive research that involves assessment of attitudes or opinions toward individuals, organizations, events, or procedures. Descriptive data are typically collected through a questionnaire survey, an interview, or an observation. A problem with descriptive research is when the response rate is low and valid conclusions cannot be drawn.

There are two research approaches suggested by various theorists as deductive approach and inductive approach. The deductive approach can be defined as an approach in which researcher develops a theory and hypothesis to test them deploying a research strategy to undertake a research study. On the other hand the inductive research approach is defined as a research approach in which researcher collects the data first and develops a theory on the basis of findings from analysis of collected data. (Saunders et al 2007:117).

Keeping in mind the objective of the research and the nature of the research approach suggested above, author followed deductive approach in this study in order to achieve the aim of describing the theory and research topic.

3.3.3 Type of Study in Accordance with Objective

Suggested by Saunders et al. (2007) there are three main types of research study based on research objective namely as exploratory study, descriptive study, and explanatory study.

The exploratory study is seen a valuable means to intend new insight in a new problem and discovering what is happing and assessing phenomena in a new light deploying any of three main techniques such as search of literature, interviewing the focus group, and conducting interview with experts (Robson,2002:59).

A descriptive study is carried out to describe the profile of persons, events or situations. Descriptive studies may be an extension of exploratory or explanatory studies. In these studies, it is important to have a clear idea about the nature of problem or research question before research is commenced (Robson, 2002:59).

Explanatory are describes as studies which form casual relationship among variables. Hence, the objective of an explanatory study is to study relationships between variables (Saunders et al. 2007).

Analysing the various types of research study suggested by theorists the research study undertaken by author is descriptive in nature since the objective of study is to describe the theory along with testing theory by primary research.

The research methodology used for this research is survey sampling. Research strategy is consistent with research nature and question design and research objectives. This is deductive approach that is used to answer who, what, where, and how questions. The reasons behind using this strategy are that it allows identify a particular location of population, enable to narrow down the population, standardise data, cheaper strategy, and author has control over the research process. This methodology provides author choice between research technique such as questionnaires, interviews, and structured observation.

3.4 Research Overview

There are two main types of data as primary data and secondary data.

3.4.1 Secondary Data

Secondary data is defined as data that was collected previously by someone else for other purposes not for the problems in hand. The secondary data is obtained by researcher from various sources such as websites, books, journals articles and academic magazines, library’s data bases, previous dissertations, research projects and any other source like newspapers, radio, TV programs so on (Zikmund, 2003 pg 136). The secondary data is inexpensive and is easy to access through various channels.

Secondary data provides author an insight about research question and provides existing findings and results on the topic that helps author in conducting research to solve the problem in hand or basis to conduct a particular research. Analysing the secondary data is often used to construct foundation for any kind of research and to find gaps in the area of research study where a subsequent new research can be carried out. Such gaps lead to conducting a primary research.

Main types of secondary data according to Saunders et al (2007:272) are:


Survey and

Multiple sources

Advantages of secondary data:

The main advantage of use of secondary data source is that it is relatively inexpensive and quick to access the information needed for research. secondary data is previously collected by others so researchers only need to reanalyse that according to their needs (Ghauri and Gronhaug, 2005).The use of internet has make the secondary research very fast providing access to various academic websites and library databases from outside the campus where as it was not possible prior to use of internet. Moreover, the other main advantage of use of secondary data is that it enable author to understand the research question and help to design primary research (Malhotra, 1996).

The historical data can only be gathered by the mean of secondary research so research of past event can only be completed by secondary data. (Cooper and Schindler, 1998). Secondary data sometimes could be only source of information when researcher do not have enough time to conduct primary research in large population sample and such secondary data could be of better quality than researcher collects himself (Stewrt and Kamins, 1993).

Therefore, the secondary data collection via secondary research is a great help for author to understand what factors influence the capital structure decisions, how the influence of these factors vary among the different types of industry. The secondary data research help author to know the main theories behind topic capital structure and help to design the questions for interviews to collect the primary data.

Limitations of secondary data:

According to Dunsmuir & William (1992) the one of the main disadvantages of secondary data collection is the inconsistency in data. Secondary data are historical data so may not provide current real happenings and only data is not adequate to answer the research questions. A particular author cannot check the biases and inaccuracies of secondary data.

The other disadvantage of secondary data is that it is collected by others for their purposes in their minds. Therefore, the researcher’s objective and research problem may not be the same to the purposes for which secondary data was collected. Hence the secondary data may not be appropriate for a particular research. It is not always free if researcher needs high quality data from such as market research companies and government. (Saunders et al. 2007, pg 261-262).

As far as the dissertation is concerned, there is lack of data available especially for determining what influences the capital structure decisions in ICT SMEs in Indian context. The secondary data provides a very broad picture of the research. Most of the research and articles used in literature review focused on the developed countries like US rather than developing countries and research context of this dissertation. So the information may divert in different context. The accuracy and reliability on secondary data will be verified through primary field research providing the real picture of what are the main factors that affect the capital structure decisions in Indian information and communication small and medium firms.

3.4.2 Primary Data

Primary data are data that is collected and analysed by a researcher for the specific purpose of concentrating on a particular research topic or question. The process of collecting primary data is known as primary research. This is important for a researcher to conduct a primary research to obtain primary data since the secondary data is not sufficient to solve the problem or to answer the research question because of disadvantages of secondary data. Business dictionary (2008, online) describes primary data as the data that is collected or observed from personal experience is knows as primary data.

According to Allen G., (1999) there are three main methods of gathering primary data as a) Survey, b) experiments, and c) observation.


A major advantage of primary data is that this is first experience data collected by researchers for their particular unique objectives. This is up to date data which provides picture of real situation.


Primary data collection takes time in gathering data. The data collection techniques are expensive too. For example If researcher go for personal interviews then it cause travelling expenses, if researcher use telephonic interview then it costs them telephone call expenses. Sometime access to the primary data is too difficult to approach because of the type of respondent. Sometime language problem arise in gathering primary data if research is undertaken in different countries where languages are different.

3.5 Research Methodology/Strategy

This section explains the research strategy employed for secondary and primary research for this study. Yin, (2003) suggested that each strategy can by deployed for exploratory, explanatory and descriptive study. Accordingly, Patton, 1990 and Reichardt, (1979) argued that the mixture of two research methods (qualitative and quantitative) can be used in any research project.

In contrast, Saunders et al. 2007 suggested that some research strategy clearly associated to deductive approach and can not be used for inductive approach.

Schmeid (1993) strongly suggests a recent trend of multi method approach that is suggest as a better research method to previous ones. This new combination is often called the triangulation method and its benefit suggested by Schmeid and other theorists is that the limitations of one or the other methods are covered and the outcomes could be more improved and result oriented.

The research approach followed in this study is deductive. The main reasons behind the choice were the objective (describing and testing main theories of capital structure) and type of research (descriptive). The other reason to choose the philosophy used (positivism) and time framework (tense).

As Creswell (1994) strongly suggests that there are two issues which affect the research approach. Firstly, nature of research topic is the most important thing as Creswell argues that if there is a plenty of literature available for a topic from which a theoretical framework and hypothesis can be defined leads to deductive approach. Whereas on the other hand if topic is a new and little previous literature exists then it may be relatively more appropriated to use inductive approach by gathering data and analyzing and reflecting upon what theoretical arguments the data are suggesting. Second issue suggested by Creswell is the time available for research as deductive approach will is quicker to finish research project as data collection is based on one take and it is more structure and designed approach keeping time available in mind. Whereas the inductive approach is much more prolong research approach as data collection, data analysis take long time to be completed. The qualitative data collection approach is primarily used for primary data collection and semi structured interview technique was used to assist the author to explore and understand topic in detail and explain that.

The process used in this study for primary and secondary data collection is as below.

3.5.1 Secondary Research Design

A preliminary review of existing literature was conducted in order to refine research question and understand the topic. Some key word, key terms and key authors were identified by the means of this preliminary research on the basis of which the subsequent secondary research was conducted. The sources of preliminary research are previous dissertations on similar topic, text books, and library’s databases.

Using the key words and authors’ name the subsequent secondary research was designed to write the literature review.

The secondary research was started by reviewing previously published literatures, journal articles, books relevant to the topic, academic websites. Griffith college library was the access centres to access these secondary data throw academic search engine & database such as Business Source Premier (EBSCOhost, 2009).

In order to access to the secondary data for this dissertation author mainly focused on article journals through the mean of Griffith College library’s database. The reason to employ the college’s online library database for secondary research was that this was a most reliable source available that time to access to academic journal and literatures easily and free of cost. It was thought that the use of academic source is vital to get data since the research project is a peace of cadmic work.

As it is often the secondary data was not sufficient to come at any conclusion and resulting to conduct primary research to achieve the objective of research study discussed earlier.

3.5.2 Primary Research Design

The primary research process employed by author was online survey structured questionnaire at initial stage of primary research. The internet websites were utilized to get the contact details of respondents that were owners of brokerage firms and sub-broking counters operating in India. The internet online system ( was employed to send and collect the questionnaires.

The online directory was used to obtain the email addresses of stock brokers in order to send online questionnaires.

As it is often discussed that the primary data collection method should be in accordance with not only the type of research and research objective but also research philosophy, approach, analysis methods and research methodology/ strategy used. Based on the deductive approach, descriptive nature of research the structured questionnaire technique is appropriate as it will help to analyse the data in quantitatively. Online Survey Questionnaire

The structured questionnaires, containing 10 questions, were designed to collect primary data. The first four questions were about firm specific variables. Question number five and six were focused on industry specific variables. However, question seven, eight and nine were focused on focused on the impact of sub-prime crises on stock broking business. Finally, last question was designed in accordance with the prediction for the future. The overall structure of the questionnaire was based on the conceptual framework, developed in previous chapter. (A sample of questionnaire is give in appendix A at the very end of dissertation)


The structure online questionnaire data collection technique is seen very quick and inexpensive method to collect large amount of primary data in one go. Additionally, this technique enables researchers to draw conclusion for a particular entire population on the basis of results and findings from a small sample of whole population. Therefore, if a particular research is designed to conclude findings in relation to a large population then structured questionnaire techniques is useful mean and this was is case in this research study.


A major limitation of this method is that it does not help researcher to explore and understand research topic in detail. This provides a much standardised results those may not be sometime appropriate to understand and describe the things accurately.

Saunders at el. (2007) argued that structured interviews or questionnaire technique can be used as a means to identify general patterns but various types of interviews are useful to assist the progress of each kind of study.

Wass and Wells, (1994) and Saunders at el. (2007:314) suggested that a particular research may incorporate more than one type of data collection technique. Therefore, as a part of survey strategy of data collection, semi structured interview can be used to explore and explain the theme emerged from finding or results of questionnaires. Moreover, it is suggested be Wass and Well that the semi structured interview can be used as a means to validating results or findings from questionnaire techniques. Choice of the Industry

As the topic of our research is directly related to stock broking firms, the industry chosen is financial institution involved in stock broking and pure brokerage firms in India. Sample Selection for Primary Research

Online directories were used to obtain the email addresses of Brokerage companies for designing online survey based on random sampling technique for online questionnaire method. The survey sample for questionnaire was sent to 100 brokerage firms for the purpose of primary research. This sample was selected randomly by the means of online directories. Only 45 completed questionnaires were received. The rate of completed questionnaire was only 45% that was very far behind than that was expected at initial stage and it took longer than expected time as well.

3.6 Data Analysis

3.6.1 Analysis of Survey Questionnaire

Based on the research approach used (deductive), and objectives of research study (describing the research topic on basis of comparison of primary and secondary research) the data collected from questionnaires has been analysed quantitatively with the help of online survey collector ( and interpreted by the means of graphs and statistics. The analysis of survey was completed in accordance with concepts emerged through literature and those were included in conceptual framework. The online survey designer ( was used to send and collect the online survey. All completed online survey questionnaires were received and saved online, and analysed automatically by survey designer. The graph were constructed by author using Excel spread sheets using data automatically analysed by online survey designer.

The nature of data was identified at the questionnaire design stage. The nature of data variables was as follows. This was done as it makes analysis process simpler if it was analysed with the help of simple data matrix using spread sheets, and to develop the different quantitative codes.

The Questions of survey questionnaires were divided as follows in order to know expected kind of variable in form of responses.

Figure: Categories of Quantitative variables.

Categorical variables

Quantifiable variables A B

Nominal Categorical variables

Questions – 2,5,9,10

Dichotomy variables

Questions – 1 and 8

Ordinal quantifiable variables

Questions 3, 4, and 7.

Categorical Rating variables

Question 6

3.7 Privacy and Ethical Issues

The respondent were free not to answer any question seems to them breach of confidentiality policy of their firm. All the respondents were assured of the anonymity and privacy about any data provided by them. Privacy assurance was guaranteed by author during the time of interview permission for data collected through interview.

A clear statement about privacy and confidentiality of the respondents was also provided in cover letter of each online survey questionnaire.

For this reason the identity and address details of the companies and owners have not been disclosed in this study. Author used proxy terms to represent the respondent firms where so was required. By letting the respondents know that no identity related to their firm is shown in this study, a copy of final writing will be sent to some respondents as they asked author to do so at time of interview process. However, author decided to adhere to the Chatham House Rules for data protection and privacy of the information gathered from respondent firms. The Chatham House Rules prohibit the author to identify the respondent or the firm, but permit to use the information freely with anonymity of respondent.

Some respondents did not answer the total value of their firm due to the privacy reason but some of respondents answered this question on the agreement of not to disclose in research project with identity of the firm. Some respondents did not allow saving their conversation electronically then paper records were used for such interview responses.

3.8 Conclusion

This chapter was about the methodology and techniques employed by author to gather primary and secondary data for this research study. Some problems and issued experienced prior and during the research also were discussed in this chapter. One of the important issue regarding whole study, the privacy and ethical issues was also discussed in this chapter. The subsequent chapter discuss the findings and data analysis.


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