MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY -------------- PHAM MINH VU SOCIAL CAPITAL’S ROLE IN AIDING SUCCESS FOR SMEs IN VIETNAM THE DISSERTATION OF ECONOMIC DOCTOR Ho Chi Minh city – 2022 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY -------------- PHAM MINH VU SOCIAL CAPITAL’S ROLE IN AIDING SUCCESS FOR SMEs IN VIETNAM Major: Business Administration Code: 9340101 THE DISSERTATION OF ECONOMIC DOCTOR Academic Advisors: Assoc. TU VAN BINH Assoc. NGUYEN TUAN KIET Ho Chi Minh city - 2022 DECLARATION I hereby declare that this thesis: “SOCIAL CAPITAL’S ROLE IN AIDING SUCCESS FOR SMEs IN VIETNAM” has been composed solely by myself and that it has not been submitted, in whole or in part, in any previous application for a degree. Except where states otherwise by reference or acknowledgment, the work presented is entirely my own.
I have read the UEH’s current research ethics guidelines, and accept responsibility for the conduct of the procedures in accordance with the guidelines. I have attempted to identify all the risks related to this research that may arise in conducting this research, obtained the relevant ethical and/or safety approval (where applicable), and acknowledged my obligations and the rights of the participants. Ho Chi Minh city, 2022 Pham Minh Vu ACKNOWLEDGEMENTS I would like to thank my parent who have never doubted for a second about my ability, my parent-in-law, who always supported me unconditionally, my boss - the warmhearted man always convinced himself to only see the good part in me, my mentor - the most enthusiastic man trying to motivate me in any way he can, and finally my wife. While I’m doing one simple job, she is doing three full time jobs taking care of three persons, one is still breastfeeding, the other is trying to count two plus two and a heartless, careless, useless man that she called husband.
TABLE OF CONTENTS CHAPTER 1: INTRODUCTION 1 1. Overview of SMEs in Vietnam 7 1. Research gap and research objectives 9 1. Objectives of study 12 1.
Research limitation and scope 14 CHAPTER 2: LITERATURE REVIEW 15 2. Theory of the Firm 15 2. The Resource-based view 19 2. The Endogenous Growth 20 2.
The Managerial Decision-Making 21 2. Theoretical basis for the relationship between social capital and innovativeness 45 2. Theoretical basis for the relationship between social capital and EO 48 2. Theoretical basis for the relationship between social capital and E-business49 2.
Theoretical basis for the relationship between EO and firm performance 52 2. Theoretical basis for the relationship between innovativeness and firm performance 58 2. Theoretical basis for the relationship between E-business and firm performance 60 2. Effect of Innovativeness to Firm performance 65 2.
Effect of Entrepreneurial Orientation to Firm performance 66 2. Effect of E-business to Firm performance 67 2. The contributed effect of endogenous social capital 68 CHAPTER 3: RESEARCH METHODOLOGY 73 3. Research Process, Design and Ethics 74 3.
The endogenous effect in research model 77 3.2 Extended Regression Model (ERM) 80 3. Measurement of Entrepreneurial orientation 86 3. Measurement of Corporate social capital 87 3. Measurement of Firm Performance 89 3.
Proposed Analysis Framework 93 3. Sampling methodology 95 CHAPTER 4: EMPIRICAL ANALYSIS 97 4. Changes in enterprises amount in Vietnam 97 4. Endogeneity and its contribution to the study 101 4.
Measures of variables and hypotheses testing 102 CHAPTER 5: CONCLUSION AND RECOMMENDATIONS 115 5. Limitations 122 REFERENCES 124 Appendix 1: Vietnam Enterprise Questionnaire 2020 141 Appendix 2: Stata Results 187 ABBREVIATION EB E-business EO Entrepreneurial orientation ERM Extended Regression Model GDP Gross Domestic Product IN Innovativeness NetPeople Network people NetIntensity Network intensity SC Social capital SME Small and Medium Enterprises USP Unique selling proposition LIST OF TABLES Table 2.1 Definitions of Social capital 27 Table 2.2 Theoretical basis for the relationship of EO and Firm Performance 54 Table 2.3 Theoretical basis for the relationship between Innovativeness and Firm Performance 58 Table 2.4 Theoretical basis for the relationship between E-business and Firm Performance 62 Table 3.1 The variables in model 82 Table 4.1 Number of enterprises in operation and average density of enterprises per 1,000 people 97 Table 4.2 Proportion of operating enterprises 98 Table 4.3 Number of newly established and re-opened enterprises 99 Table 4.4 Information of variables employed in the model 102 Table 4.5 Descriptive statistical results 103 Table 4.6 Estimated result of Extended Regression Model Group 1 (considering SalesGrowth and SCNetIntensity) 105 Table 4.7 Estimated result of Extended Regression Model Group 2 (considering LabourGrowth and SCNetIntensity) 108 Table 4.8 Estimated result of Extended Regression Model Group 3 (considering SalesGrowth and SCNetPeople) 110 Table 4.9 Estimated result of Extended Regression Model Group 4 (considering LabourGrowth and SCNetPeople) 112 Table 4.10 Results of testing hypotheses 113 LIST OF FIGURES Figure 2.1 Social capital articles by year 25 Figure 2.2 Form and dimensions of social capital 39 Figure 2.3 Bolton and Thompson’s entrepreneurial process diagram (2004) 44 Figure 2.4 A theoretical model of EO-environment-structure-performance relationship 54 Figure 3.1 The proposed research model 83 ABSTRACT Based on the survey on SMEs conducted by GSO in Vietnam, the sample of 2,647 SMEs is concerned in this study. Using the quantitative model of ERM, the results bring the interesting finding, revealing the endogenous role of social capital in the relationship between innovativeness, entrepreneurial orientation, E-business and SME’s performance. The quantitative method confirms the existence of endogenous social capital, as well as highlighting the importance of innovativeness, entrepreneurial orientation and E-business contributed to the firm performance.
In addition, the study found social capital is dominated by young people and the gender of females. Accordingly, the younger, the more dynamic for social capital. In addition, the female owners/directors/managers have more advantages in leveraging social capital compared to their male colleagues. In addition, the finding of the dissertation also derived a new point compared to other studies is the inclusion of endogenous factors in the ERM model, in which the social capital is a recognized endogenous variable after performing the test.
There have been many published papers, research and surveys about Innovativeness, Entrepreneurial orientation, or E-business as well as social capital, however the combination of these 4 components in a research model does not seem to be interesting, this is also one of the research gaps we tried to fulfill. The research results, besides making academic contributions to the field of professional research, also contribute to the development of more effective policies to develop SMEs in the region, in which the above factors are taken into account. Keywords: social capital, innovativeness, entrepreneurial orientation, E-business, endogenous variable. TÓM TẮT Dựa trên khảo sát về các Doanh nghiệp vừa và nhỏ (DNVVN) do Tổng cục thống kê (TCTK) thực hiện tại Việt Nam, luận án được thực hiện theo mẫu nghiên cứu gồm 2.
Sử dụng mô hình định lượng Hồi quy mở rộng (ERM), luận án cho ra một vài kết quả thú vị, cho thấy vai trò nội sinh của vốn xã hội trong mối quan hệ giữa đổi mới sáng tạo, định hướng kinh doanh, thương mại điện tử và hiệu quả hoạt động của DNVVN. Phương pháp định lượng Hồi quy mở rộng (ERM) xác nhận sự tồn tại của vốn xã hội như một biến nội sinh, đồng thời làm nổi bật tầm quan trọng của sự đổi mới, định hướng kinh doanh và thương mại điện tử đóng góp vào hiệu quả hoạt động của doanh nghiệp. Ngoài ra, kết quả nghiên cứu cho thấy vốn xã hội tập trung hơn ở chủ sở hữu/giám đốc/quản lý trẻ và có giới tính nữ. Theo đó, nếu chủ sở hữu/giám đốc/quản lý càng trẻ thì vốn xã hội càng tốt và càng năng động.
Ngoài ra, nữ chủ sở hữu/giám đốc/quản lý có nhiều lợi thế hơn trong việc tận dụng vốn xã hội so với các đồng nghiệp nam của họ. Các phát hiện của luận án còn rút ra một điểm mới so với các nghiên cứu trước là đưa các yếu tố biến nội sinh vào mô hình, trong đó vốn xã hội là một biến nội sinh được thừa nhận sau khi thực hiện nghiên cứu. Đã có rất nhiều bài báo, nghiên cứu và khảo sát được công bố về đổi mới sáng tạo, định hướng khởi nghiệp, thương mại điện tử cũng như vốn xã hội, tuy nhiên sự kết hợp của bốn thành phần này trong một mô hình nghiên cứu đơn nhất có vẻ chưa được thực sự chú ý, đây cũng là một trong những những lỗ hổng nghiên cứu mà luận án đã cố gắng khai thác. Kết quả nghiên cứu ngoài đóng góp về mặt học thuật cho lĩnh vực nghiên cứu chuyên môn còn góp phần xây dựng các chính sách hiệu quả hơn để phát triển DNNVV trong tương lai.
Research background This dissertation explores the social capital concept and its endogenous effect on the relationship between innovativeness, Entrepreneurial Orientation (EO), and E-business to small and medium enterprises (SMEs) performance in Vietnam. Since 1980, scientists and researchers all around the world have started to dig into the concept of social capital, thanks to the work of Bourdieu (1986), Coleman (1988), and Putnam (2001). Bourdieu (1986), the first person to develop the term social capital, described it as a collection of total nodes in a social network that can lead to actual or potential resources. Based on that foundation, Coleman (1988) argued that the form of social capital arises from changes in interpersonal relationships that allow productive activity.
He also noted that social capital is less tangible than physical capital, but it stimulates productive activity, particularly in the case of SMEs. SMEs are not smaller versions of larger companies, they are disadvantaged by being less financially secure, facing shortfalls in human capital and access to information, and often being less experienced in managing strategic decision-making. Nevertheless, SMEs gain some competitive advantages from more superficial organizational structures offering flexibility, practical and open communication channels, and lower resistance to change. They could leverage those advantages and turn them into real resources by appropriately creating and managing social capital.
As a result, increasing a firm’s social capital can help it establish intangible values and foster innovation. By doing so, the company can expand horizontal collaboration with multiple channels such as the banking system, government departments, consultancy firms, business associations, and so on. The value of social capital is becoming more widely recognized in the literature on SMEs (Liao 2 and Welsch, 2005; Neergaard et al., 2005; Tötterman and Sten, 2005; De Carolis and Saparito, 2006; Anderson et al., 2007; Lee and Jones, 2008; Ramos-Rodríguez et al., 2010) According to the Ministry of Planning and Investment (2021), in recent years, Vietnam's economy continued to have many positive changes, with the average growth rate of Gross Domestic Product (GDP) in the period 2016-2020 reaching 5.99%/year, in which, the business organization sector alone contributed over 60% to GDP. By the end of 2020, there were 811,538 enterprises are active, an increase of 7.0% over the same period in 2019 in detail: Enterprises operating in the service sector accounted for 66.8%, enterprises operating in manufacturing and construction accounted for 31.8%, enterprises operating in agriculture, forestry and fishery accounted for 1.
On average, there are 8.3 enterprises operating with over 1,000 citizens. However, from 2020, due to the complicated situation of the Covid-19 pandemic, growth in most economic sectors has begun to slow down and decline, which created consequences on production, business activities, and export and import activities. Although there are many urgent solutions applied in disease prevention, policies aimed at removing difficulties for enterprises and focusing on recovery and socio-economic development have been implemented, the business sector still suffers many negative impacts. In 2020, Vietnam has 134,941 newly established enterprises, a decrease of 2.3% in the number of enterprises compared to 2019.
The total number of enterprises temporarily suspending business is 46,592 enterprises, an increase of 62.