In the previous chapter, I gave a small version of what a research project looks like. In this section, I go over some of the tools that I have been using in the past for my research. These are good starting points for your own research project.
In the CEO compensation project in the previous chapter, we derived the theoretical prediction from a model in the literature. This is typical for the research process. You will build on prior theoretical and empirical research to build an argument for your predictions. To do that you will have to search for literature on your topic. There are a number of sources you can use to access the relevant academic literature. However, in most cases (ssrn is the exception), you will have to be on the university’s network if you want to actually read the full paper.
Google Scholar is probably
the most comprehensive repository. This search engine work very
similar to regular Google search. There are some additional
tricks you can use author:lastname-firstname will help you to
narrow down papers from a specific author. intitle:keyword
lets you search for keywords in the title of papers. You can
also narrow down your search based on year of publication. The
advanced search features hidden in the left side bar give you
additional options such as searching for certain journals. If you
are on the university network, Google Scholar will tell you for
every paper whether it is accessible or not.
Onesearch is the university search engine. It’s the best way to figure out whether there is an easily accessible version of the paper even when you are not on the university’s network.
Webofknowledge and EBSCOhost are two publisher driven search engines. They work pretty well. Each with their own quirks.
SSRN (Social Science Research Network) and NBER (National Bureau of Economic Research both provide access to their own not-yet-peer-reviewed paper repositories. Here you go to find cutting edge research.
My favourite way to start a research project now is to find one
or two excellent overview or review papers. A (systematic) review
paper provides a state of a research field and identifies
interesting new research questions. I find that a good review
paper gives a good list of papers you can build on and they often
already compare the most important papers in a field. The trick
is to be not too picky. You will not find a review for your exact
research problem but it is unlikely that you will not find a
partly relevant overview paper.15 When you start your literature search, you do not want to start
too narrow. You are not going to find an overview paper about
“CEO compensation in Australian mining companies after the GFC.”
However, you can start with an overview paper about CEO
compensation. Like the one I found: “Executive Compensation: A
Modern Primer” by
Edmans and Gabaix (2016) in Journal of Economic Literature.
You can search for review papers by adding intitle:review or
intitle:overview to your Google Scholar search.
To find other papers relevant to your topic, you can build on the review paper by (1) looking up the papers referred to in the review paper and (2) search for papers that cite the review paper. You can do the latter via Google Scholar and Webofknowledge.
To find good reviews, I believe you should start your search in the better journals.16 These links form a good starting point for Accounting and Finance. Unfortunately, you have to register your email address first.. There are even some journals that are dedicated to these literature reviews for instance Journal of Economic Literature and Journal of Accounting Literature.17 I also like Psychological Bulletin for theories in psychology. I am not aware of a similar journal in finance but I will happily add it if you let me know.
There are a couple of writing mistakes that are very common for first time researchers.18 There is a lot of good writing advice available. Dan Simons’ collection is very pragmatic and is close to my sensibilities. Below I highlight some of the problems I see quite often. Before I tackle those issuess it is useful to make a distinction between the different levels in a document. I will give you a quick overview so that you understand my other advice.
By now, you probably know that there is a general structure in an empirical research paper: (1) Introduction, (2) Theory, (3) Method, (4) Results, (5) Conclusion. This is the highest structural level in a thesis.
The second level is within each of these sections. For instance, your introduction will consist of multiple paragraphs. The third level is at the level of the paragraph which consists of multiple sentences. The fourth level is within those sentence which contain multiple words. The most common comment on writing is possibly that there are grammatical mistakes or typos in your writing. This is an issue at the lowest level, i.e. the level of the words. This is also the least interesting level. Most of my feedback will focus on the other issues.
You want to keep two rules in mind at each of the levels. (1) You should aim to keep each unit (section, paragraph, sentences) coherent.19 For instance, a paragraph should only contain one main message. (2) You should aim to give the reader the information that they need in the order that they need it. When you start using a new concept or theory, you should give the reader an introduction to that concept or theory, unless you can assume they already know the concept or theory.
Introduce the key concepts and theories in your introduction. If you write a paper about market efficiency, you should give the reader at least an idea of what you mean by market efficiency. This should come at the start of your paper otherwise the reader will not know whether the literature review is relevant or not. An introduction of a concept should include a simplified description of what it is not only what it’s effects are. If you look at the introduction of new legislation, tell the reader what the legislation requires of people or businesses. If you introduce a theory, explain it’s important assumptions.
If your thesis focuses on a practical concept, you should still attempt to define your concept in theoretical terms. This definition will help you to make the connection with the relevant theories and with the mathematical specification in your statistical model.
To be able to do a good research project, you should read a lot of literature first and then come up with your research question. However, when you write your research project up, you should explain your theory first and then present the literature.20 This one is a personal opinion and you should probably check with your supervisor. The theory will provide structure of your literature review: which studies should be discussed together, which ones should be contrasted with each other, and which ones are relevant for your setting. If you do not start with a theoretical motivation, you run the risk that your literature review comes across (or is) just a series of empirical results without any connection.
You recognise these literature reviews by the following conclusion: some papers find a positive effect, some papers find a negative effect, we are testing it again in a different sample. This is not necessarily a good approach because no matter what the result of your study is, the next researcher can just do the same thing: some papers find a positive effect, some papers find a negative effect, we are testing it again in a different sample. Nobody learns anything from these literature reviews and papers.
Sometimes I see students split up the literature review and the hypothesis section which artificially forces you to either postpone your theoretical arguments or to repeat them almost verbatim. You should integrate hypothesis and literature review. Don’t split them artificially.
One common mistake is to write too many words. This is an issue at the level of the sentence. The trick is to reread your sentences and see whether the meaning of a sentence changes if you drop certain words. You do not want to use more words than necessary because it will only make it harder for the reader to understand your main message.
When we explain a theoretical argument, we all want to express that we are not certain that this effect will be true. You maybe have the tendency to write " X may increase Y" to reflect that uncertainty. However, there are better ways to do this. You can write “According to theory, X increases Y” or “Under this assumption, X increases Y.” Avoid words like “can,” “may,” “might” and try to be more precise under which circumstances your prediction or argument holds. This will help you to assess whether your theory fits your setting. Being precise will also help you to avoid the trap of writing a noncommital literature review
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