Validity is related to the manner in which one treats the data that one has collected. This usually implies analyzing, making inferences and drawing conclusions from it. It is an important aspect to consider in one’s research, as it determines its quality.
In terms of internal validity, this usually refers to whether one is actually investigation what one claims to be researching. This is usually related to the research design, and especially with regards to the dependent and independent variables. One of the ways to do this is to control as many variables as possible, in order to isolate the dependent and independent ones. “We will also control for comprehensive list of other factors that we expect influence firm’s efficiency, including the year, region and industry specifics, with which we expect to capture the effects of the level of competition, government subsidizing etc” (Zheka, n.d., p. 27).
Kyereboah-Coleman contemplates this as well, writing that “The results also show that while firms that have been profitable are likely to continue to be profitable, market valuation of a firm today does not necessarily depend on its past market valuation but could be as a result of other factors” (2007, p. 17). As one can see, they did not control the variables as much, yet it is also important to note that not all variables can always be controlled. Therefore, it is important to note when one knows that there are some that are escaping.
On the other hand, there is also external validity. This entails the potential that the conclusions and inferences have of being generalized to other populations, contexts, theories, etc. Two important types of external validity are inferential and theoretical.
Inferential external validity refers to if the findings can be extrapolated to other contexts. In order to do this, it is necessary to establish both the present population and the other setting that one would transfer the results to. It refers to how unique the sample is, and how it relates to other possible populations, leaving a lot to the regard and judgment of the investigators.
This is especially interesting to study in Zheka’s research, as it investigates economies in transition. “Certainly, any of these hypotheses may not be true for a particular enterprise and our goal is to investigate the overall tendency in the population, using the sample we have and the methods we describe below” (Zheka, n.d., p. 29). As one can see, there is more variation than one would like, and many more variables to be taken into account. “The main reason is the high rigidity of Ukrainian stock market when it is not possible to determine the market value of companies” (Zheka, n.d., p. 28). The unstable economy and social conditions make this subject riche, yet very difficult to measure in a valid way. “On the one side larger ethnic diversity in particular regions of Ukraine provokes social tensions even today” (Zheka, n.d., p. 24). The lack of homogeneity of the subject also makes it hard to asses validly.
The other article also addresses its shortcomings in terms of inferential external validity. “We would however like to indicate that, in trying to examine the link between corporate governance and firm performance, it would have been appropriate to use a broader spectrum of variables” (Kyereboah-Coleman, 2007, p. 21). They find that they have many factors that escaped them, which would obviously make it more difficult to leave their particular cases for those of others.
On the other hand, theoretical external validity regards the extraction of theoretical knowledge and concepts from the data and pre-existing theory. The particular results of the theory are then used for their generalization into a much larger theoretical system. As neither of these investigations pretends to completely create a theory, but rather contribute towards one, they constantly frame their findings within the preexisting theory.
Even though Zheka has significant findings, she states them as a modest evidence for something new. “Importantly, our analysis provides the first strong evidence that board independence is important and relevant in transitional market. This result is well expected from theory because outside directors could be sufficiently independent to control self-dealing by insiders” (Zheka, n.d., p. 40). Similarly, Kyereboah-Coleman proposes the study as even more evidence towards something that has already been stated many times in the literature. “The relevance of corporate governance cannot be over-emphasized since it constitutes the organizational climate for the internal activities of a company” (2007, p. 20). They would much greater investigations to truly change the literature so, for now, they content themselves with referencing others and presenting findings in a humble manner.
As one can see, the article “Does Corporate Governance Predict Firms’ Performance? The Case of Ukraine” by Vitaliy Zhekal attempts to be very serious in its treatment of validity. Even though it does not go into extensive detail discussing this matter, one can see that the investigators attempted to reduce those factors that would diminish this quality in the research. For example, it constantly attempts to observe that its results are valid for an economy in transition, making its theoretical external validity problematic. Furthermore, it attempts to make general assertions from particular cases, which may vary wildly, especially in such an unstable economy. “Its value for each corporation allows judging about the extent the firm adheres to local standards of corporate governance; though our goal is not to consider particular cases but rather an overall tendency in the population” (Zheka, n.d., p. 16). Although these are important issues, one should also study extraordinary phenomena in a detailed manner, in order to have more information about how the ordinary ones work.
There is little to no textbook discussion, but it has delimitated well what it attempts to research and attempted to investigate it in an adequate manner, with the limitations that it has. Even though more of a discussion should have taken place, the extensive annexes help to provide adequate validity and reliability. As such, it has adequately, even though not excellently, discussed these issues.
Reference List
Kyereboah-Coleman, A. (2007). “Corporate Governance and Firm Performance in Africa: A Dynamic Panel Data Analysis.” International Conference on Corporate Governance in Emerging Markets, Global Corporate Governance Forum (GCGF) and Asian Institute of Corporate Governance (AICG), 15th -17th November, 2007, Sabanci University, Istanbul, Turkey.
Zheka, V. (n.d.). “Does Corporate Governance Predict Firms’ Performance? The Case of Ukraine.”
