Basic clarifications regarding the research methodology

The aim of the present examination was to examine the economic policy, the innovation policy, the public funding policy, and the PE and VC market in Germany during 2010, 2011 and 2012. This research focus was associated with the following research objectives. First, the examination of Germany’s economic and innovation policy. Second, the examination of public funding on the federal level. This encompassed research subsidies and public funding measures for SME financing, innovation projects, enterprise founding and equity investments. Third, the examination of Germany’s PE and VC market with regard to investor’s investment strategy, investment behaviour and investment process (see section 4.6.4).

These research objectives required a deeper analysis which could not have been achieved by an isolated application of a merely quantitative or qualitative research design. Hence, it seemed

appropriate to combine both quantitative and qualitative research methods in order to examine the research subjects in their interconnection. This applied in particular with regard to the issue of public funding. On this examination level, a purely quantitative research strategy seemed inappropriate to analyse the progress of public funding in relation to the economic and innovation policy on the federal level. Hence, flexibility and openness regarding a suitable research strategy was required to penetrate the different but interrelated subjects.

In that respect, Ulrich (1981) remarks that an appropriate research strategy would be influenced and dependent on social systems complexity. Quantitative research methods would be unsuitable to capture the complexity of social systems. Ulrich (1981) argues that it would not be possible to examine social systems by solely individual methodologies which would contradict the complexity of phenomenon. Hence, he criticises Popper’s critical rationalism as a narrowed paradigm that simply reduces sciences by physical assumptions (see also appendix J.1). Grochla (1976) in that respect argues that applied sciences should not exclude particular methods and recommends the application of combined research approaches (see also appendix J.3). Chmielewicz (1979) supplements that researchers should be focused on methodological approaches which enable them to realise new knowledge. He (Chmielewicz 1979, p. 88) criticises that: “…, rather than resulting in discoveries, pure logic and deduction have an inhibitory effect”. In that respect, Chmielewicz (1979) distinguishes four different research aims:

term development; theory development;

pragmatic and normative research.

The term development is concerned with the description of reality, whereas theory development is concerned with cause and effect relationships. Pragmatic sciences are transforming theoretical results into decision making models for practice. Finally, normative sciences are concerned with the development of rational models.

Furthermore, Laughlin (1995) in the context of research regarding accounting systems argues that every kind of empirical research would have limitations. Hence, neither completely subjective nor solely objective research approaches would be able to generate a complete picture of reality. As a consequence of the each one-sided application of research methodologies in accounting research, recommendations for practice were only rarely considered by practitioners.

These circumstances out of Laughlin’s (1995) point of view would call for the application of a more flexible research approach. In terms of selecting an appropriate research procedure, Laughlin (1995) argues along the detail of theory and methodological development on the one hand and the requirement of changing the status quo on the other hand. The application of a detailed theory might be possible in research examinations of well-researched areas in which generalisations are possible. On the opposite of low theorising, the examination is based on researcher’s perceptions and hence generalisations would not be possible. Both of these extremes would be either associated with a detailed research methodology and a largely irrelevant researcher or a low level of methodology development with a permanently involved researcher. Moreover, these different possibilities of both theory and methodology in research examinations would be associated with either the final requirement of changing the status quo or its acceptance (Laughlin 1995).

Laughlin’s (1995) approach of so-called middle-range thinking, rather than being focused, is positioned within these extremes and hence takes a medium position in theory and methodology and also regarding the change requirement. This specific approach is based on the assumption that generalisations about reality would be possible but not guaranteed to exist. Therefore, this approach of middle-range thinking is based on a skeletal initial theory which might be both complemented and enriched during the research progress. In order to ensure theory’s possible enrichment, the selection of an appropriate research methodology is also rather skeletal and associated with a medium position too. This procedure allows for flexibility and adjustments during the research process in which the researcher is always involved. By focusing on the middle-point, this approach tries to preserve the strength of each of the one-sided paradigms in order to avoid their respective weaknesses. According to Laughlin (1995), this medium position would be best addressed by German critical theory. However, Laughlin (1995) makes clear that parts of German critical theory’s representatives would follow a rather Marxist orientation with clear theoretical assumptions and propositions for change. Therefore, middle-range thinking according to Laughlin (1995) follows the Habermasian path of German critical theory, which is less politically motivated and also associated with a rather strategic orientation of the change requirement. Middle-range thinking is open for accepting the existing status quo on the one hand but also for a change in the case that this is required on the other hand (Laughlin 1995). This procedure was initially applied with regard to the development of a rather skeletal theory which is expressed by a set of presumptions rather than a set of detailed hypotheses (see section 4.6.3). Moreover, this approach of so-called middle-range thinking forms the basis of the research

methodology for the present thesis. Such a proceeding seemed advisable in order to reduce the research risk as a consequence of a one-sided research approach (see section 5.2).