Validity

The question that should be asked here is “are we measuring what we think we are measuring?” Kumar (2005) opines that validity is the ability of an instrument to measure what it is designed to measure. Hence, validity is defined as the degree to which the researcher has measured what he or she set out to measure (Denscombe, 2014). To further the definition of validity, Saunders & Lewis (2012) suggest that validity is the extent to which a data collection method or methods accurately measure what they set out to measure and the research findings are really about what they acknowledge to be about. Simply put, validity is concerned with whether research findings are actually about what they seem to be about. Validity is a crucial factor that should be considered in research strategy design. This is owing to the view that various factors can render research findings invalid. Thus, to arrive at valid research conclusions, the factors that threaten the validity of findings must be eliminated (Saunders & Lewis, 2012; Saunders et al., 2012).

Consequently, the principal factors that threaten validity (Saunders & Lewis, 2012) and how this particular study navigates through them in order to draw valid conclusions are presented below:

Subject Selection – This points to the notion that biases may exist as a result of selecting research subjects, which are not representative of the general population. However, in a bid to ensure that the population used in this research are valid and can be used to draw conclusions, this study makes use of data that covers all the institutions involved. The data collected from the Central Bank of Nigeria and the Nigeria Deposit Insurance Corporation have aggregated information of all the commercial banks that operated in Nigeria. This indicates that the information used is a true representation of the general population, and thus valid generalisations can be made. Though it was the desire of this study to interview one individual each from all the twenty-three institutions (twenty-one commercial banks and the two regulatory agencies) presently in existence, only seventeen individuals were eventually interviewed. But to scale down this limitation and increase validity, financial figures covering all the banks still in existence and those that operated in the country before the consolidation reforms of 2005 are examined in this study.

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History – Specific events, which occur in the history of the observed phenomenon, may have a significant effect on research findings. Due to the effect of such events, the research strategy employed should be able to incorporate the history. Accordingly, in order to ensure validity, the scope of this study is fourteen (14) years (2000 – 2013). The periods before and after the 2005 banking reforms, the 2009 banking reforms, the global financial crisis that started in the second half of 2007, and the periods before some banks were nationalised and transformed into bridge banks are all covered within the scope of the study. All these events that are perceived to have some impact on the performance of banking institutions are discussed in this study and interview questions solicited answers, which sought to bring to light the effects of these events.

Testing – This factor suggests that the process of collecting data may have effects on the subjects. For instance, respondents may try to impress the interviewer, and in the process, stray from providing valid responses. In relation to this study, responses were only obtained from seasoned, experienced bankers who had no reason to impress the interviewer because they acted in positions of trust and had their reputation and those of their institutions to protect. More so, the information collected from regulatory documents, the financial stability reports of the CBN and the annual reports of the NDIC are documents that were carefully prepared because of the audience. Likewise, the data obtained from the BUREAU VAN DJIK Bankscope database are adaptations from original bank financial statements, and this database is renowned to be used for academic and professional research. Thus, to ensure the validity of this study, only trusted data sources as mentioned have been used.

Mortality – This is mainly an important issue for the conduct of longitudinal research if it happens that the research subject is lost. However, institutions matter in this particular study but not individuals. Even though some banks ceased to exist during the period covered, their non-existence is integral to this study.

Furthermore, validity can be viewed under two perspectives (internal and external validity). The factors discussed above are predominantly viewed as internal validity. External validity refers to the extent to which conclusions are generalizable under different research settings. This dwells on whether the institutions used can be relied upon to guarantee generalisations. The concern of this research is to x-ray the regulatory terrain in the Nigerian banking sector, and it does not make recommendations that should exactly fit into the scope of another banking sector. However, the generalisations made can be used as a reference source

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especially to developing countries in Africa, while the methods employed can be adopted to be applied in other jurisdictions (Heukelom, 2009; Saunders & Lewis, 2012).