5.4.3 Content analysis, a combination of qualitative research and quantitative methods

Per country under review the annual accounts of 50 companies are analysed for a period of three years (2005-2007). With the exception of the Netherlands, in the case of which all the companies listed on the three most important stock indexes are researched for a four-year period (2004-2007). Subsection 5.4.4 below explains further why and how those 50 companies are sampled and analysed. This study is performed through content analysis to be defined as a research technique for making replicable and valid inferences from texts to the contexts of their words (Krippendorff2004, p. 18). More specifically in relation to the present study: content analysis is defined as a systematic, objective, quantitative analysis of message characteristics (Neuendorf 2002, p. 1). In general, content analysis concerns human interactions and the goal is to produce counts of key categories and measurements of the amounts of other variables (Neuendorf2002, p. 14). The content analysis in this study was performed in respect of the corporate governance statements (being the corporate governance related chapter or paragraph) in the annual reports1 of companies listed in one of the five EU countries mentioned above. These corporate governance statements are a form of mass messaging: the contents of these statements are intended for a large and undifferentiated audience (Neuendorf 2002, p. 22).

A distinction can be made between two main streams of research; quantitative and qualitative research. Content analysis is considered to be qualitative research (Neuendorf 2002, p. 1). Qualitative research has significantly been used more and more in recent decades in accounting research. The benefits and importance of research other than quantitative research specifically regarding corporate governance are increasingly recognised by academics (Van Oosterhout 2008, p. 18) (Merchant and Van der Stede 2006, p. 1). The choice for quantitative or qualitative research depends on the research question posed by the researcher. If one aims to verify certain defined variables or test a hypothesis and wants to present numeric quantification, then the quantitative research method is the method to use. When the research question has a more explanatory nature, the qualitative method is used; one tries to understand a certain area that little is known about or one tries to understand a certain phenomenon. Statistical inference is not the main objective. In this study the application of the comply or explain principle is reviewed. This research studies quite a new phenomenon. By analysing the trends and developments of the application of the comply or explain principle, this study is of an explanatory nature resulting mainly in qualitative research and, more specifically, in content analysis. Nevertheless, to analyse the collected data, quantitative research methods are ultimately used as well. As Boeije states: "The results of qualitative research sometimes invite further (testing) quantitative research" (Boeije 2005, p. 37).

After having analysed the trends and developments in the application of the comply or explain principle, statistical methods are applied to analyse further any possible relations between the application and company or country characteristics. A combination of qualitative and quantitative research has been chosen for to be able to draw a complete picture of the application of the comply or explain principle and to conclude with the most suitable design for the comply or explain principle that can withstand the test of time.