A study note on research philosophies employed in Accounting and Finance

A study note on research philosophies employed in Accounting and Finance (information from perplexity.ai)

My question 1: "Which research philosophy is the most frequently used one in the academic research works of the Finance and Accounting field? Which one is the least popular one?"

The reply: "In the academic research field of Finance and Accounting, the most frequently used research philosophy is Positivism. Positivism dominates because it emphasizes precise, objective data analysis, hypothesis testing, and the scientific method, fitting well with the natural science-like approach of finance research which seeks causality, general laws, and model building. The ontology in finance tends toward objectivism, and epistemologically positivism is favored due to its focus on measurable, objective knowledge. This positivist paradigm is seen as mainstream and dominant especially in financial market research, financial economics, and accounting research relying on quantitative methods.

In contrast, the least popular research philosophies in Finance and Accounting tend to be interpretivist, critical theory, and alternative qualitative paradigms. These paradigms, though gaining some traction in critical accounting research, remain minority approaches. They emphasize subjectivity, social context, and constructivist knowledge, which conflict with the dominant positivist approach emphasizing objectivity and quantitative methods. There is a recognized methodological narrowness and underuse of qualitative paradigms in finance and accounting literature, limiting the examination of social implications and diverse research questions.

In summary:

• Most popular philosophy: Positivism (objective, scientific, quantitative, model-based).

• Least popular philosophies: Interpretivism, critical theory, and other qualitative or constructivist paradigms (subjective, social-contextual, less quantitative).

This reflects ongoing paradigm debates but with positivism still overwhelmingly dominant in finance and accounting research."

My question 2: "Does the preference on the research philosophy to use also differ by geographical regions (e.g. North America, South America, UK, continental Europe, North Asia and South East Asia?"

The reply: "Yes, the preference for research philosophy in Finance and Accounting academic research does differ by geographical regions.

• In Anglo-American regions (North America, UK), there is a strong dominance of positivist research philosophy, focusing on empirical, quantitative, and model-based approaches consistent with natural science paradigms. This dominance is linked to the longstanding development of financial markets and academic traditions in these regions that emphasize scientific rigor and hypothesis testing.

• In continental Europe and parts of Asia (including North Asia and Southeast Asia), while positivism is still prevalent, there is more openness to interpretivist and critical approaches, especially in accounting research. Some European and Asian researchers incorporate qualitative methods and socio-cultural perspectives, influenced by different academic traditions and local contexts such as Confucian culture in East Asia shaping financial behaviors.

• Research from emerging markets and regions like South America, parts of Asia, and other developing economies tend to show a wider diversity of philosophical preferences due to varying degrees of institutional development, cultural factors, and practical research focuses. These regions may employ more pluralist and flexible approaches, sometimes blending positivist and interpretivist methods to address social and economic realities that are less suited to purely quantitative models.

Overall, Anglo-American finance research favors positivism most strongly, while other regions show more philosophical diversity in accounting and finance research. These geographical differences reflect distinct academic traditions, cultural influences, and market conditions.

If more detailed regional comparisons or examples are preferred, further investigation can be done. Yes, the preference for research philosophy in Finance and Accounting does differ by geographical regions. Anglo-American regions (North America, UK) predominantly favor the positivist philosophy, emphasizing empirical, quantitative, and scientific methods aligned with natural science paradigms. Continental Europe and parts of Asia show more openness to interpretivist and critical approaches, incorporating qualitative and socio-cultural perspectives, influenced by regional academic traditions and cultures such as Confucianism in East Asia. Emerging markets and regions like South America exhibit more diversity in philosophical approaches, blending positivist and interpretivist methods to better address their unique economic and social contexts. These differences reflect distinct academic traditions, cultural influences, and market conditions across regions."

A collection of blog notes on using chatgpt for research purpose.