Research Methodology and Method in Finance and AccountingProfessor Li ZengquanShanghai University of Finance and Economics2011.2I: ObjectivesThis course is aimed all those who are interested in understanding the research process and improving their performance in research. The main objective of this course is to provide students a clear guidance on research method and methodology in finance and accounting.The course can be divided into two parts. In part one, some issues on research methodology will be discussed. In this part, we will first examine the philosophical debates which condition research in our subject areas, and then explain our understanding of the scope of accounting and financial research. Part two provides two chapters on research methods. In the first chapter of this part we will discuss the power and application of different methods. In the second chapter, a general structure of an academic paper will be introduced.II: RequirementsThe course includes seminal-type discussion of the assigned papers. The class will be assigned into groups of eight separately and will be asked to make a 45-minute presentation of one paper in the reading list. For each presentation, the two group in charge has to present the paper using PowerPoint for 20 minutes. Then we open for discussion in the remaining 15 minutes. Especially, each member in the group is randomly designated as the presenter at the beginning of the presentation.For the final examination, each student is required to complete a short “term paper”(3000 to 5000 words) in the style of a completely paper. The structure of this paper must be formally completed, e.g., some issues such as research questions, key assumptions, sample selection, variable definition, structured model, and empirical results have to be explicitly spelled out. This paper can be written in English orChinese.III. GradingThe purpose of grading is twofold. One is the usual evaluation of your performance of academic purposes. The second is to encourage active discussion in the classroom. In line with these objections, your grade will be determined as follows:Class participation 15%Group presentation 40%Exanimate paper 45%IV. Class TopicA. Methodology1)The philosophy of finance and accounting research2)Traditions of research in accounting and financeB. Method1)The method of empirical research2)The research output/SAS codeV. Reference1. Text bookRyan Bob, Robert W. Scapens, Michael Theobold, 2002, Research Method and Methodology in Finance and Accounting (second edition), published by Thomson.2. Complemented paper1)Alchian A.A., 1950, Uncertainty, Evolution, and Economic Theory, Journal ofPolitical Economy 58, 211-2212)Fridman, Milton, 1953, Positive Research Methodology, Published In Chap.1 of“Essays in Positive Economics”, Chicago: The Press of the University of Chicago.3)张五常，2002，科学的方法，载于《经济解释》（卷一）之《科学说需求》第一章，香港：花千树出版社。

4)Watts, R.L., Zimmerman, J.L., 1986, The Role of Accounting Theory, Publishedin Chap.1 of “Positive Accounting Theory”. Prentice-Hall, Englewood Cliffs, NJ.5)Holthausen, R. W., R. L. Watts, 2001, The relevance of the value-relevanceliterature for financial accounting standard setting, Journal of Accounting and economics 31, 3-75.6)Barth, M.E., Beaver, W.H., Landman, W., 2001. The relevance of value relevanceresearch for financial accounting standard setting: Another view. Journal of Accounting and economics 31, 76-91.7)Johnson, Bruce W., Robert Magee, Nandu Nagarajan, and Herry Newman, 1985,An Analysis of the Stock Price Reaction to Sudden Executive Death: Implications for the Management Labor Market, Journal of Accounting and Economics 7, 151–174.8)Slovin, Myron B., and Sushka, Marie E., 1993, Ownership Concentration,Corporate Control Activity, and Firm Value: Evidence from the Death of Inside Block holders. Journal of Finance 48, 1293-1321.9)Karpoff Jonathan M., 2001, Public Versus Private Initiative in Arctic Exploration:The Effects of Incentives and Organizational Structure, Journal of Political Economy 109, 38-7810)Bertrand Marianne, Antoinette Schoar, 2003, The Managing with Style: TheEffect of Managers on Corporate Policy, The Quarterly Journal of Economics 118, 1169-120811)Mackinlay, A. C.，1997, Event studies in economics and finance , Journal ofEconomic Literature 35, 13–3912)Kothari, S.P., Andrew J. Leone, Charles E. Wasley, 2005, Performance matcheddiscretionary accrual measures, Journal of Accounting and Economics 39, 163-19713)Brown Stephen, Kin Lo, Thomas Lys, 1999, Use of R2 in accounting research:measuring changes in value relevance over the last four decades,Journal of Accounting and Economics 28,83-11514)Petersen, Mitchell A., 2009, Estimating Standard Errors in Finance Panel DataSets: Comparing Approaches, The Review of Financial Studies 22, 435-48015)Larcker, David F., Rusticus, Tjomme O.,2010, On the Use of InstrumentalVariables in Accounting Research, Journal of Accounting and Economics 49: 186–2053. Discussed paper1)Healy, P.M., Palepu, K.G., Ruback, R.S., 1992, Does corporate performanceimproves after mergers? Journal of Financial Economics 31, 135–175.2)Ghosh, A., 2001, Does operating performance really improve following corporateacquisitions? Journal of Corporate Finance 7, 151-178.3)Chaney, P.K., Philipich, K.L., 2002. Shredded reputation: the cost of audit failure.The Journal of Accounting Research 40, 1221–1245.4)Nelson, Karen K., Richard A. Price, Brian R. Rountree, 2008, The marketreaction to Arthur Andersen’s role in the Enron scandal: Loss of reputation or confounding effects?, Journal of Accounting and Economics 46, 279-2935)DeFond, M., Park, C., 1997. Smoothing income in anticipation of future earnings,Journal of Accounting and Economics 23, 115–139.6)Elgers, P. T., R. J. Pfeiffer Jr, S. L. Porter, 2003, Anticipatory income smoothing:a re-examination, Journal of Accounting and economics 35, 305-422.7)Perez-Gonzalez F., 2006, Inherited Control and Firm Performance, AmericanEconomic Review 96, 1559-1588.8)Bennedsen, M. K. Nielsen, and, Wolfenzon, D., 2007. Inside the family firm: Therole of families in succession decisions and performance, Quarterly Journal of Economics 122 ,647-691。