Types of Research: Basic and Applied research

The nature and scope of research depend upon its purpose, methodology, and field of inquiry. Research may be conducted to develop theories, address practical issues, or contribute to purely academic exploration. In some cases, it focuses on solving immediate problems; in others, it advances knowledge for long-term theoretical development. Regardless of its orientation, research enriches collective understanding and contributes to the broader body of knowledge.

Broadly, research can be classified into two main categories based on its purpose and application:

 

  • Basic Research
  • Applied Research

 

Basic Research

Basic research is primarily concerned with the pursuit of knowledge for its own sake. Its main aim is to expand understanding of concepts, theories, and relationships without necessarily seeking immediate practical application. This type of research emphasizes generalization, hypothesis testing, and theory building, thereby strengthening the theoretical foundations of a discipline.

 

Researchers undertaking basic research are usually highly trained in research methodology and committed to advancing the structured body of knowledge. Although its findings might not provide immediate solutions, they offer the theoretical insights that later shape applied research and practical innovations.

 

Examples of Basic Research:

  • How does motivation affect employee performance?

  • Is there a relationship between risk management and the long-term sustainability of banks?

  • What factors influence consumer perceptions of financial products or services?

  • What is the long-term relationship between inflation and unemployment in Nepal?

  • Does financial literacy influence household saving and investment decisions?

  • What role does monetary policy play in economic growth in developing economies?

  • How do remittance inflows affect the stability of Nepal’s balance of payments?

  • What are the theoretical linkages between interest rate volatility and capital market development?

 

Applied Research

Applied research, in contrast, is problem-oriented and action-driven. Its purpose is to apply existing theories or knowledge to address specific, real-world issues faced by organizations, industries, or society at large. The primary objective of applied research is to provide timely, practical, and actionable solutions, making it relevant in professional, business, and policy contexts.

 

In the field of banking and finance, applied research plays a crucial role in evaluating policies, improving customer services, managing risks, and supporting strategic decision-making. For NRB Assistant Directors, understanding applied research is particularly important, as much of the work at NRB involves applying research findings to guide monetary policy, regulate financial institutions, and promote economic stability.

 

Examples of Applied Research:

  • Identifying factors influencing employee job satisfaction in a commercial bank to reduce absenteeism and improve performance.

  • Conducting market research to design financial products aligned with customer needs and preferences.

  • Assessing whether digital banking adoption improves financial inclusion in rural areas of Nepal.

  • Evaluating the effect of interest rate policy changes on private sector investment.

  • Studying how the acquisition of new technology by a bank impacts profitability and customer satisfaction.

  • Assessing the impact of NRB’s monetary policy on inflation control in the last five years.

  • Identifying factors influencing non-performing loans (NPLs) in Nepalese commercial banks.

  • Evaluating the effectiveness of digital payment systems in enhancing financial inclusion in rural Nepal.

  • Studying the impact of NRB’s deprived sector lending policy on small and medium enterprises (SMEs).

  • Analyzing how exchange rate fluctuations affect Nepal’s imports, exports, and foreign reserves.

  • Measuring the contribution of microfinance programs to poverty reduction in Nepal.

 

Copyright: Biswakarma (2022), Research Methodology, Samjhana Publication. 

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