Research methodology

國

立 政 治 大 學

‧

N a tio na

l C h engchi U ni ve rs it y

of the institutional evolution, e.g. how startup-government cooperation has fostered regulatory reforms.

The research strategy for empirical research can be summarized as follows:

1. Review all relevant public documents from 2010 to 2018, of Taiwan and Korea, to describe sequence and content of government policies, initiatives and regulatory reforms concerning the fintech industry.

o Compare and validate government initiatives with secondary documents (e.g.

OECD regulatory indicators) to evaluate extent and quality of government initiatives.

2. Retrieve all publicly available industry information about how, where and when the fintech industry formed in Taiwan and Korea. Document central stakeholders and their initiatives.

3. Review and compare evolution of the fintech industry with government initiatives. Focus on temporal and causal patterns – how government and startups interacted.

4. Interview central stakeholders of the fintech industry in Taiwan and Korea. Focus on motivation and rationales for their behavior and perception of government policies and industry formation.

Lastly, the qualitative case study is iterative – moving between collection of data, analysis and theory formation – and in similar manner the analysis of material proceeds not in a linear strategy but instead in a more cyclical fashion. The research strategy for analysis of empirical material initially proceeds with initial coding and establishing of categories and patterns within the data, where each coding and category builds towards establishing more structures, patterns and categories within the data (see Hesse-Biber &

Leavy, 2011, p. 310). Patterns and themes emerging in the case study allow additional collection of information and analysis of the phenomenon while also guiding comparison of the cases of Taiwan and Korea.

4.3. Research methodology

The research puzzle and strategy guide the selection of research methodology as the research methodology aims to propose suitable methods to address the central research

‧

立 政 治 大 學

‧

N a tio na

l C h engchi U ni ve rs it y

puzzle. Empirical research is conducted as a comparative case study of institutional entrepreneurship in Taiwan and Korea – by comparison of how new fintech startups act as institutional entrepreneurs in Taiwan and Korea, what are the similarities and differences. Case study is a method to “investigate the case in relation to its historical, economic, technological, social and cultural context” (Eriksson & Kovalainen, 2008, p.

115), and case study is selected as the research method due to focus on establishing thick description of the empirical phenomena, while comparative approach is included to achieve more pronounced depth and validity for the research results. Due to fintech industry of Taiwan being relatively nascent, the case study will primarily focus on the case of Korea with more extensive focus, while the case of Taiwan is researched as a supportive case study. Case of Taiwan is still valuable as the analysis of Taiwan is focused explaining the reasons contributing to lack of fintech development in comparison to Korea. The focus of the research is to draw inferences about the temporal and causal patterns, the long- and short-term mechanisms of institutional evolution by studying data of Taiwan and Korea from period 2010 to 2018. The data includes the entire evolution path of fintech industries in both countries, which ensures that empirical data contributes to inductive reasoning and theorization of the patterns of institutional evolution.

The research methodology can be described as qualitative mixed methods case study as the research methodology includes both objective and subjective sources of data, the analysis is both deductive and inductive and moreover the research is explanatory. The research leverages primarily inductive reasoning as the newness of topic and empirical data requires building entirely new theoretical framework and conceptual foundations for new institutionalism. Moreover, the research is idiographic as the research aims to create in-depth thick descriptions but also by theory building aims to contribute to general theory. Holistic in-depth documentation of the causal patterns via data triangulation provides excellent foundation to make inferences about general patterns of institutional evolution. The empirical research is qualitative because qualitative research is especially suitable research method when there is limited prior research about the topic (e.g.

institutional evolution, fintech) and secondly qualitative methods are important as they focus on interpretation and understanding phenomenon on a deeper level (Eriksson &

Kovalainen, 2008, p. 5). Qualitative in-depth case study aims to create thick descriptions

‧

立 政 治 大 學

‧

N a tio na

l C h engchi U ni ve rs it y

of the studied cases, where the focus is to document in detail the temporal and causal processes (see Hesse-Biber & Leavy, 2011). The purpose of the qualitative case study is to focus on creating “holistic understanding of a problem, issue or phenomenon within its social context…case study allows for a highly complex and nuanced understanding by addressing research questions and triangulating “thick descriptions” with interpretations of those descriptions in an ongoing iterative process” (Hesse-Biber &

Leavy, 2011, p. 256). The case study of fintech industries of Korea and Taiwan aims to provide in-depth thick description how the new industries have evolved over time, with nuanced interpretations how each actor, process and contextual elements have interacted in the process. The qualitative methods and case study approach are especially suitable due to the nature of the research topic and research question as the case of fintech is extremely novel, there is limited number of cases and lastly the research topic and research question requires focus on causal and temporal processes of the phenomenon.

Firstly, the research topic is very new, especially for comparative capitalism, which is why the research methods should be exploratory and qualitative. Secondly, the research explores how institutional entrepreneurs create new institutions, which means there is a very limited number of relevant actors, which leads to a small number of potential observations supporting a qualitative in-depth analysis of the relevant cases. Lastly, the research is focused on studying a process – how institutional entrepreneurs drive institutional evolution – and due to this, qualitative methods are most suited for this research. Benefit of qualitative research is that it is high in validity – accurately measures the concepts and processes – while qualitative research is less reliable as repeated research is not likely to produce identical results (Babbie, 2013, p. 188-190), but this trade-off is acceptable as institutional evolution among countries tends to follow unique trajectories. Validity of the qualitative research is supported by triangulation and mixed methods as the research combines both objective and subjective sources of empirical observations, as objective observations (e.g. industry statistics, regulatory changes) are combined with subjective observations gathered from interviews with industry stakeholders, where triangulation of data contributes to increasing validity of the research. Objective and subjective data sources will complement each other in creating thicker descriptions of the phenomena. Moreover, while qualitative research is often low

‧

立 政 治 大 學

‧

N a tio na

l C h engchi U ni ve rs it y

in reliability, the triangulation and using of objective data sources (e.g. industry statistics) will enhance reliability by provision of more objective element to complement subjective insights from the interviews, while similarly subjective insight via interviews supports validity by providing access to understand ambitions and interests of actors, why and how they pursued certain behavioral strategies.

The research method can be described as a combination of deductive and inductive reasoning as the empirical research is deductively structured according to the theoretical framework, with specific hypotheses of institutional evolution, but empirical data fosters inductive reasoning. Inductive and deductive reasoning refers to logical models for making conclusions where inductive refers to moving from specific to more general whereas deductive moves from general to specific (Babbie, 2013, p. 22-23). Generally speaking, inductive refers to establishing logical patterns from a set of observations whereas deductive refers to a process of testing general principles of a set of observations. As the research is a qualitative case study, with a novel topic and new empirical observations, the theoretical framework provides direction and guidance for collecting empirical observations while empirical data fosters inductive reasoning, inferences and new theory building about the institutional evolution. As mentioned earlier, the case of fintech industries in Taiwan and Korea challenge the existing theories of new institutionalism – hence the theories provide limited insight to understanding the observations – which is why the novel empirical data from case study requires inductive reasoning to formulate new theories and conceptual foundations of institutional evolution. Due to this, the empirical research is guided by the theoretical framework but the empirical study aims to contribute by exhaustive thick idiographic explanation of the cases (Babbie, 2013, p. 20-21). Moreover, the iterative nature of empirical research – cyclical iteration of data collection, analysis, theory formation – includes deductive analysis but in general the empirical research is characterized by inductive reasoning and new theory formation. Unexplainable empirical data contributes always a new inductive phase and theory building until theoretical saturation emerges via empirical data beginning to repeat certain themes and patterns. While the case study is focused on Taiwan and Korea, the case study does not only create context specific thick descriptions but the focus on analytical causal patterns contributes to provide theoretical foundations

‧

立 政 治 大 學

‧

N a tio na

l C h engchi U ni ve rs it y

of a more general theory of institutional evolution across the market economies, i.e. more universal conceptual modes of institutional change (Hesse-Biber & Leavy, 2011).

The empirical research is mainly explanatory – contributing a new theory – but the novelty of the topic makes the empirical research partly exploratory (exploring a new territory of social phenomenon) which means it is expected the theoretical framework will not explain fully the phenomenon, but gives direction to central themes and the empirical research will generate novel observations that require further inductive reasoning and theory building. Babbie (2013, p. 22) argued this relationship of observations and theories forms the wheel of science where observations create theories, which create hypotheses to be tested with observations, and observations always create new conclusions creating new theories and hypotheses. Novel topics require exploratory work, but the data triangulation and focus on in-depth description of the causal and temporal patterns allows the study of Taiwan and Korea to contribute to theory building by holistic, thick descriptions of the phenomenon.