The Real Estate And Stock Markets In China

Chapter 3 – Methodology

This chapter presents the research methodology used to achieve the research objectives of the thesis. Research methodology explains the role of different methods of research opted for and what could be obtained by utilizing them. The domain is vast more than considered, and it is a spectrum of methods rather than the methodology as a whole. Some specific purposes of research have been tied up with certain parts of academia, but it is not always the same in all cases (Lariviere, 2019). It is perceived that qualitative research is only for the utilization of social scientists and anthropologists, while quantitative research methods are for the use of economists and epidemiologists. This notion is not at all right, and researchers use a mix of different ways according to their choice. The choice of research method is based on the selection of the topic and research outcomes.

3.1 Research Design

According to the research study published by Bell, Bryman, and Harley (2018), there are five research designs. These research designs can be Comparative Social survey or Cross-sectional, Experimental, Longitudinal and Case study (Bell, Bryman, and Harley, 2018). Comment by Lewis Ramsden: You do not need to explain the general theory of research design in your dissertation. This is a very broad topic and you should only discuss the specific design/methodology you plan to use and why. Most people reading your dissertation will already know the basics of research design.

Comparative design is the implementation of two or more cross-sectional studies simultaneously. When analysts differentiate between two or more conflicting positions, the comparative design assists them to have a better idea.

The data of Social survey or Cross-sectional design is collected from more than one variable (e.g. persons) at a point in time given, so that one may gather a qualitative as well quantitative data, which is then cross-checked or observed to analyze pattern association. This design does not let analysts affect the variables (Bryman, & Bell, 2007).

The experimental design aims to observe the connections among different variables (dependent and independent), and to study how the change in the independent variable influences the other dependent variable or vice versa. Two types of groups, i.e. control and experimental, are used at the same time. The control group ensures the mitigation of potential impact due to some occasional finding. Therefore, the research is considered valid internally. Furthermore, this design does not allow the modification of variables, so it is not suitable for business research areas (McNulty et al., 2019).

The Longitudinal Research Design studies social modernization and occasional influence over shorter or longer periods. Short-term or long-term analysis of people and certain events may lead to influence on the subjects that are under observation.

The main single case study design describes the standout characteristics of a situation, that can either be a single corporation, only place or single individual or a unique situation. However, it is a multiple case study design that is gaining popularity among corporate and management research. It targets certain individual events and their specific backgrounds.

All of these research designs are covered in a different type of research data. Research data can be primary or secondary. The current research study includes longitudinal study design as it will be including the data from different sources. There can be two different stake issues that can be linked with theory and research. The use of secondary data makes it easier and faster to analyze the data. The connection of the method with the research objectives, along with the results of the thesis can prove to be extremely significant. There can be an inductive theory or deductive. In the current research, the deductive approach is used. It is viewed as the mainstream when collecting and analyzing data (Ruggiano and Perry, 2019).

3.2 Research Methodology

The research methods can be qualitative or quantitative. The qualitative approach of research is aimed at answering the questions that arise with who, what, how, why, and when. It tries to explain the nature or quality of a phenomenon. It can range on different approaches such as simple observations, interviewing individuals, little research, studying focus groups, and getting people to fill out surveys (De Wever, 2019). The main objective is to find out the underlying qualities and aspects of a phenomenon that cannot be expressed in simple variable numbers. It is in contrast to the qualitative research method as it tries to explain the questions arising from how much or the particular amount/figure. This methodology aims at the aspects related to the magnitude. When researching on ‘how much’ a thing is, it can be the magnitude of an occurrence, such as the number of people that were victims of a global pandemic (Kopf, 2016). It can also be seen to explain the relationship between two or more variables that are concerned. It can consist of observational analysis or the much detailed and complicated interventional research. In this thesis, quantitative research methodology will be implemented in analyzing the data as it is related to the numbers and ratios in the stock market. The quantitative variables implemented in this thesis are Adjustable-Rate Mortgage (A.R.M.) and Loan to Value (L.T.V.). Comment by Lewis Ramsden: Again here, you do not need an explanation of what qualitative/quantitative methods are. You need to discuss which method you are using and provide some supporting evidence/arguments to why you have made this choice. Comment by Lewis Ramsden: This is better but you need to expand on this. Why are you using these variables, in what capacity are using them, i.e. what quantitative model do you suggest and why? This should all be explained here.

3.3 Research Data Resources

There can be a variety of research methods, but, the resources of data are mainly two, either it can be primary or secondary. Primary data is the one that is collected by the researchers or investigators for the very first time, and the purpose of help in their study is known as primary data. It can be called as firsthand Information as it the first data of its kind collected straight from the source of the data (Rutberg, 2018). It is the most original form of research data as it is researched explicitly with a new purpose and aim that has not been done by other scientists or researchers ever before. Comment by Lewis Ramsden: Same as above. You do not need to explain what the different types of data are but instead, the data you plan to use, where it comes from, the validity of it and any problems that may occur.

On the other hand, secondary data that has already been investigated and found by previous researchers for the sake of help in their study, but it is of high relevance to other researchers after the pioneers. The data used in this way will be secondary. If a researcher is to use other investigator’s data in the form of secondary data research, they will have to adjust the Information being used in such a way that it can be related to the objective of the study being conducted (Johnston, 2017). Many researchers prefer it as it is hugely less expensive as compared to primary data research for each new study.

The researcher shall use secondary data with diligence and due care. They should double-check before using the data because there is a possibility that the selected data may not be sufficient or suitable for the case study which an analyst wants to analyse. To be on the safer side, the researcher should review certain features before the researcher uses that data. The choice of the correct secondary data should be based on the reliability of data. The authors should be reliable, and the data must have some proof of authenticity (Kothari, 2004). The choice of the right secondary data resource should also be based on the fact that either the data compiler is impartial while collecting the data. The choice of the methodology in the acquisition of the data is also essential (Kumar, 2019). The sources to collect the data should be made sure of the unbiasedness. Last but not least, the level of accuracy benchmark of the resource.

3.4 Suitability of data

If the data is relevant to one situation, it does not make it fitted for another position too. Therefore, if the Information is not adequate anymore, it shall not be used by the analysts. In this case, the analysts shall make a proper analysis of the data, sources, and methods from where they collected it. Furthermore, the design, descriptions, and limitations of the said situation shall also be analyzed. If there are discrepancies between the data and the given case, the data will remain unsuitable and unable to use (Castle, 2003).

3.4.1 Adequacy of data

Suppose the collected data is found insufficient and improper for the said event. The researcher shall consider not using it for the same case study. To sum it all up, it will not be wrong to say that it is not always right to use existing data. The researcher shall use that data when he makes sure that Information is reliable, sufficient, adequate, and trusted. On the other hand, it also does not mean that researcher shall always overlook the data, even the one that is available from authentic means and can be relied on. Comment by Lewis Ramsden: You are collecting the data, so you should be able to comment on it’s adequacy. This is all theoretical. You need to make specific to your research.

3.4.2 Significance of the research study

In economics, the evaluation of the stock market and mortgage return is significant. The collection of the secondary data and analysis of the relation of both the parameters in the two of the most markets in the world has a particular significance. China is suffering the stock market fluctuations recently, which even negatively influenced economic growth (Shan, 2002, p. 56). Tellingly, during 1986 to 2002, a decreasing trend has been found in stock returns in the U.S.A., where the securitized and un-securitized property performances were worthy of being considered (Brounen and Eichholtz, 2003). When studying the development of real estate in the U.S.A., scholars would always mention the speculation of investors, as their performance led to some famous periods in history. The development of the U.S.A. real estate industry is very early; in the 18th century, people were interested in buying and selling lands, the U.S.A. real estate industry has prospered since then. The secondary data will help in the understanding of the correlation and comparison of the parameters. Moreover, the results will allow the researchers as well as economists, to analyze the metrics. The study also has significant implications for business decisions.

3.5 Advantages of the secondary data research methodology

The secondary research has gained popularity in the corporate sector. The reason is its efficiency and reduced cost. It is suitable for those organizations that cannot afford extraordinary spending on research to collect data. Therefore, secondary research is a viable option for them. Following are the list of advantages of commonly used secondary research approaches and examples. There are several causes and benefits of using secondary data (Peffers et al., 2007). For instance:

· The secondary data is readily available and easier to use as we do not collect the original data.

· It is also cost-effective and saves a significant amount of research cost.

· It also ensures credibility as it is based on previous findings and conclusions.

· However, with many benefits, there are some drawbacks of the secondary data.

· It may lack quality at times.

· May lead to incorrect or biased Information.

· Information may not be tracked back to the relevant person.

Despite all its shortcomings, the secondary data could be helpful in plenty of ways if it is gathered in the right direction and is handled with due care and responsibility (Mackey, and Gass, 2015).

3.5.1 Availability of data on the internet

In this modern world, most of the Information is on our fingertips due to full availability of the internet. The internet is the most common way to collect secondary data. This data is readily available on the internet free of charge, or only a little amount is to be paid to get access to that secondary data. However, the organizations shall ensure they are collecting the data from a trusted website (Vartanian, 2010).

3.5.2 Government and Non-Government Agencies

The data available on Government or Non-Government agencies websites is reliable. This data can be accessed by paying only a small sum.

3.5.3 Public Libraries

Another cheap and readily available mean to collect secondary data is Public Libraries. These libraries have copies of research papers and articles that were published earlier. The public libraries have a wide range of data on various subject matters and topics such as corporate newsletters, market trends and statistics, which is an excellent source of Information for the required secondary data (Hoffmann et al., 2008).

3.5.4 Educational institutions

It is another excellent means to collect data that is often underestimated, as we know, most research centres are based in universities and colleges. The researcher can attain relevant secondary data from these institutions.

3.5.5 Commercial Information means

The commercial information sources are the mean of a collection of secondary data. The daily newspapers, T.V. programs or Journals provide Information mostly, and it also comes in very cheap. Therefore, it is another essential mean to collect secondary data (Bryman & Bell, 2007).

3.6 Steps to conducting Secondary Research

These are the steps involved in conducting secondary research –

3.6.1 Identify the topic of research

Before the start-up, highlight the research subject. After that, prepare a list of features and aims of that research. The research objectives for the study have been identified as the analysis of the correlation between the mortgage rates and stock return in China and U.S.A. The thesis also focuses on the comparison of the collaboration between the U.S.A. and China.

3.6.2 Identify research sources

The next step is, shortlisting the Information means that can provide the most authenticated and adequate data according to the research. After the identification of the research questions, several resources were collected and analyzed. After review of the credibility and reliability of the funds, few resources were selected. In the economic sectors and corporations that wish to attain such data can obtain it by filing a request to these outlets. They will be able to identify potential clients through these, as well as may find a way to promote their services through these means as they have a wider reach. For the thesis, the central database used for the mortgage rate in China is CEIC, as a professional financial and economic database funded in Hong Kong; In contrast, for the mortgage rate in the U.S.A., the data would mainly be collected from the ATTOM Data Solution, which plays a leading role in the real estate statistics in the U.S.A. For the data needed in the analysis of stock returns, the Center for Research in Securities Prices (CRSP) database would be applied, as the most renowned institution to save stock market data.

3.6.3 Collect Existing Data

After the first steps, the third step is observation and collection of existing data that is relevant and suitable for the selected study. This study can be obtained from several means such as commercial information sources, government, and NGOs websites. The data will be collected from the chosen secondary resources (Hox, and Boeije, 2005). The collection of data will include pinpointing the Information and recording it for analysis.

3.6.4 Combine and compare

When the data is compiled, ensure that data which is collected is free from errors and any duplication and then receive it into a proper format. As incorrect Information can damage the research, make sure that data is obtained from reliable means. The data is collected and arranged well in an excel sheet or any other form of software. Information is compared and contrasted manually. In addition, the analysis of data is done with the help of statistical software (Peffers et al., 2007).

3.6.5 Analyze data

That data that is collected shall be enough to answer all the relevant questions. Analysis and observations of the collected data should be made to ensure it is appropriate and adequate. Otherwise, repeat the process if there are some discrepancies found in the collected data. The primary data analysis tool applied would be SPSS, and the two main functions would be used Regression and Pearson Correlation. The regression study assist to figure would the if the two items have any linear correlations, which would be used to help with the previous two hypotheses; the Pearson Correlation study is used to work out the significance area, the result will indicate which correlation is more reliable, which would be suitable for the third hypothesis.

3.7 Ontological considerations

The consideration of ontology is concerned with the social entities of the research study. “There are two positions that are referred to as objectivism and constructionism, respectively. Objectivism exists whether human beings are there to observe it or not. On the other hand, there is a real-world out there which exists independently of our senses. However, the reality in the social world is constructed and not wholly existing out there at constructionism. That is to say, social phenomena and their meanings are continually being accomplished by social actors” (Sun, 2012). In this research study, objectivism is used. As it is based on the critical parameters and their correlation, objectivism is considered.

3.8 Sampling Method

Secondary analysis is the study of data by those analysts who were not part of the team in gathering the data. In this paper, we research the relationship between mortgage rates and stock return. Due to the constraint of time and finances, a secondary resource is the choice of methodology as the empirical data analysis. The population consist of a vast number of items and individuals. Therefore, it is almost impossible to collect data from the whole community. Instead of gathering data from the entire population, which is not practicable, the data is compiled from a portion of that population. The sampling method is often used to gather data from a large community. Sampling is the procedure; a section of the population is taken, which represents the whole population. It is called a sample. The studies are carried out on that sample to determine the characteristics of that entire population. It is more convenient to gather data through sampling as it takes less cost, efforts, and time. While selecting the samples, make sure that the example that is selected is not too large; otherwise, it can be harder to oversee and handle.

3.9 Limitations of secondary data research methodology

There are different limitations to the secondary data research methodology. The data can be unreliable because the secondary data obtained from the official statistics may mirror the dominant influence (those in power) – that can limit the findings. The data taken from the official websites are always evolving; the way they operate or measured may change with time. Therefore, it makes the stats collected a long time ago less reliable and hard to compare. The authenticity of documents can be compromised as well (Hair et al., 2007). At times, if the writing or a research article is too old, there may be some missing pieces, which may raise questions over its authenticity.

Similarly, if a document is earlier, there may be some questions over its representativeness too, whether it represents the whole population. A large percentage of materials are not taken care of; they may become weary within time and could become a waste. Some records are also kept away from the public, so they are never available. The research study has its limitations as well (Cole and Trinh, 2017). As the research study only focuses on two parameters, and the comparison has been made exclusively between the two countries. The research is limited because it has a narrow focus.

3.10 Ethical Considerations

Every research study implies some ethical considerations. There can be different ethical implications of the research studies. The use of secondary data is a highly ethical practice—the use of secondary research data maximizing the value of the collected data. The burden of authenticity is on the researcher. The secondary data research results ensure that the data can be replicable. There is a need for transparency in the research methodology, and the researcher should maintain integrity. However, if the benefits of the use of secondary data are more than the risks, there should be re-identification of the objectives (Atkinson, and Brandolini, 2001). Researchers are supposed to disclose any sensitive information. However, in the current research, there are no unethical implications. The leading five ethical considerations are informed consent, voluntary participation, no- harm policy, anonymity, and confidentiality. In the current research study, there is no direct contact with the human population, like in the case of surveys and questionnaire. In secondary research, the need to choose reliable and authentic sources are subjected to the compliance of ethical standards (Sherif, 2018). There does not seem to be any reason to get the affirmation of the ethical review board in the present research study.

3.11 Summary

The choice of research methodology is an essential step in conducting the research study. To meet the research objectives and answer the research questions, a specific research methodology is chosen. The research design can be qualitative or quantitative. Both of the research methodologies have their strengths and weaknesses. The choice of research data resources also depends on the research objectives and feasibility of the researcher. Due to the research objectives, financial and cost restraint, secondary data research methodology has been used in the research paper. The secondary resource used are some of the official websites of the U.S.A. and China. The data obtained from these websites will be analyzed with the help of the parameters, mortgage rate and stock return. The research study uses a deductive approach and the quantitative research methodology for the data analysis. There are certain limitations to secondary research, as it might be biased and outdated. However, the up-to-date Information has been taken for the examination of this objective in this thesis.

Moreover, the authenticity and reliability of the sources have been confirmed. There are no ethical implications of the study. The current research study has been performed within the standards of the moral code of conduct.