Against Empiricism: a Critical Realist Critique of the Use of Quantitative

Against Empiricism: A Critical Realist Critique of the Use of Quantitative Methods in Critical Accounting Research Sven Modell* a, b, c Max Bakerd aAlliance Manchester Business School, University of Manchester bNHH – Norwegian School of Economics, Bergen cTurku School of Economics, Turku dUniversity of Sydney Business School, Sydney *Corresponding author Address for correspondence: Alliance Manchester Business School University of Manchester Booth Street West Manchester M15 6PB United Kingdom E-mail: [email protected] Acknowledgements: An earlier version of this paper was presented at a research seminar at Alliance Manchester Business School. We thank Farah Arshad, Trevor Hopper, Brendan O’Dwyer, Paolo Quattrone, Matteo Ronzani, Bob Sapens and Leonid Sokolovskiy for valuable comments. 1 Against Empiricism: A Critical Realist Critique of the Use of Quantitative Methods in Critical Accounting Research Abstract This paper contributes to the emerging debate on the use of quantitative methods in critical accounting research by pondering the questions of whether such research has distanced itself from the empiricism, that is typically associated with positivist accounting research, and what the consequences of such empiricism are for the critical accounting project. In doing so, we pay particular attention to the problems of advancing causal explanations and translating such explanations into critical research interventions. Drawing on critical realism as a distinct alternative to classical empiricism, we highlight the shortcomings of empiricist modes of explanation in this regard. To illustrate the failings of such modes of explanation, we review a distinct body of social and environmental accounting research that has yielded somewhat critical insights but that has also aspired to straddle the divide between positivist and critical accounting research. We observe a strong legacy of empiricism in this literature and document how this has hampered its evolution into a coherent, explanatory research programme that can be used to advance radical social critiques and policy interventions. We discuss how such problems may be overcome in future research relying on critical realism and the implications this may have for the critical accounting project. Key words; Critical Realism, Empiricism, Quantitative Methods, Social and Environmental Accounting, 2 Against Empiricism: A Critical Realist Critique of the Use of Quantitative Methods in Critical Accounting Research Introduction Since its inception, the critical accounting project has evolved along a broad range of theoretical and methodological trajectories and has effectively straddled the divide between the objectivist and subjectivist approaches into which social science research generally falls (Cooper and Hopper, 2006; Gendron, 2018; Hopper and Powell, 1985). Nevertheless, critical accounting scholars have displayed a strong preference for qualitative research methods and, according to some commentators, they have under-utilised the potential of quantitative research approaches as a means of advancing radical social critiques (Everett et al., 2015; Richardson, 2015). It is only relatively recently that the critical potential of quantitative research methods has received more focussed attention, notably in the form of a debate forum published in Critical Perspectives on Accounting in 2015 (Everett et al., 2015; Gray and Milne, 2015; Patten, 2015; Richardson, 2015; Roberts and Wallace, 2015). While not unreservedly in favour of quantitative methods, the contributors to this debate draw attention to the specific statistical techniques that can be used in critical accounting research and how quantitative methods may be employed to expand the range of research questions asked by critical accounting scholars. In so far as such scholars use quantitative methods, their overarching goal is often to advance alternative explanations to those favoured by positivist accounting researchers while also utilising the claimed benefits of such methods, such as being able to draw more generalisable conclusions about the prevalence of specific accounting phenomena. While this emerging debate has started to shed light on the potential usefulness of critical accounting research relying on quantitative methods, an issue requiring further attention is the problems of advancing and testing causal explanations in such research. As noted by Modell (2017a), many critical accounting scholars seem to have shied away from discussing epistemological and methodological questions related to causality for fear of associating themselves with an empiricist epistemology that they see as firmly wedded to positivist 3 accounting research.1 The central tenet of such empiricism, namely that empirical observations are a largely unmediated reflection of underlying, law-like regularities and that such observations can be taken as the sole basis for inferring causality, is generally rejected by critical accounting scholars (e.g., Arrington and Francis, 1989; Chabrak, 2005; Tinker et al., 1982; Whitley, 1988). Yet, these scholars rarely dwell on what implications this rejection of empiricism has for the possibilities of advancing causal explanations and have paid little attention to what might constitute plausible, alternative modes of causal explanation and how such explanations may provide the basis for radical social critique. For instance, contributors to the emerging debate about the role of quantitative methods in critical accounting research have lamented the use of excessively empiricist research approaches (Gray and Milne, 2015; Richardson, 2015; Roberts and Wallace, 2015), while largely confining the discussion of how to address questions of causality to brief accounts of select methods that are commonly used in positivist accounting research (Roberts and Wallace, 2015). Thus, while decrying the empiricism attributed to positivist accounting research, critical accounting scholars have, by and large, failed to advance a distinct epistemological alternative to such research in so far as the advancement of causal explanations is concerned. Questions of causality are no doubt important in order to identify the reasons for social ills and to dwell on which research and policy interventions may be required to address such ills. However, without a deeper epistemological understanding of the challenges of advancing causal explanations and how such explanations may be translated into radical social critiques, critical accounting scholars are at risk of unreflectively emulating the research practices emerging in positivist accounting research. This may, in turn, jeopardise the distinctiveness of the critical accounting project as a research programme that is committed to advancing such critiques (cf. Gray and Milne, 2015). Extending this line of inquiry, the objective of this paper is to deepen the analysis of the problems associated with empiricist modes of explanation and discuss how these problems may be addressed in critical accounting research relying on quantitative methods. In doing so, we adopt a critical realist perspective and discuss how such a perspective may help in advancing causal explanations. Critical realism offers a distinct alternative to classical empiricism which has only recently started to influence critical accounting research (Modell, 2017a, 2017b). In 1 A similar reluctance to discuss epistemological and methodological questions related to the advancement of causal explanations is discernible in interpretive accounting research, which is sometimes difficult to distinguish from critical accounting research (Lukka, 2014; Lukka and Modell, 2010). 4 what follows, we first advance a critical realist critique of empiricist modes of explanation such as those associated with positivist accounting research. By way of illustration, we then focus on social and environmental accounting research, which has been identified as one of the key areas where accounting scholars have used quantitative methods to advance critical insights that differ from the explanations advanced in positivist research (Patten, 2015; Roberts and Wallace, 2015). We chose to focus on this literature because critical accounting scholars, such as Gray and Milne (2015), have questioned the extent to which much of it represents a break with positivism and whether it is, indeed, imbued with genuine, critical intent (see also Deegan, 2017). We seek to evaluate this assertion and gauge the consequences of empiricist modes of explanation through a review of a distinct body of quantitative research concerned with environmental disclosures, that has provided a somewhat radical critique of environmental accounting practices although much of it has also sought to straddle the divide between critical and positivist accounting research. We then use our analysis of this literature as a basis for extending the discussion of how critical realism may address the problems of empiricism that have typically been associated with positivist accounting research and that may also be prevalent in critical accounting research relying on quantitative methods. On balance, we find a strong legacy of empiricism in the research under review. In contrast to critical realist modes of explanation, little attention has been devoted to teasing out the workings of the many, but not necessarily observable, mechanisms that might give rise to diverse patterns in environmental disclosure practices. Moreover, much of this research has been dominated by increasing but, in our

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