Write a detailed plan to conduct an empirical analysis in the area of banking or finance. The term paper should include the following sections: 1.Introduction 2.Literature review 3.Hypothesis development 4.Methodology 5.Data 6.Conclusion In each section, the following issues should be discussed:
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Introduction: What is the research topic (be specific, and innovative if possible)? Examples: CEO compensation and dividend policy, evidence from the US. Effect of corporate tax cuts on bank lending. Example: the importance of the topic, literature gap, your interest and etc. The impact of this topic. Example: potential contribution and implications.
Literature: Briefly summarize and discuss at least five important studies in the field of your research. How is your research related to the previous studies?
Hypotheses: Based on theory and/or existing literature, develop at least two hypotheses. State your predictions about the signs of estimated coefficients and explain why.
Methodology: Describe the research method(s). Example: OLS regression, event study, IV regression, etc. Write down the regression models for testing each hypothesis. What are the advantages or disadvantages of this method? Are there alternatives? If there are potential problems with this method (as suggested in previously studies or according to your knowledge), how do you plan to solve them?
Data: Based on the regression models specified in the previous section, which variables do you need to collect from where? Example: debt ratio can be collected from Data stream. Specify the details of the sample you intend to collect for the research. Example: From 1995 to 2012, 150 companies except for financial institutions in the US. Compare your sample to the samples used in existing literature. How long will it take to collect and clean the data? What are the challenges in data collection and cleaning? Are there any data samples that could be unique (e.g., data from UK colonies in the 18th century, data from US banks around the civil war, data from the early Prussian imperial era)?
Conclusion: Potential contribution of this research. Possible difficulties/limitations in this research. Are there further studies you wish to conduct in the future?
