SOCIAL CAPITAL’S ROLE IN AIDING SUCCESS FOR SMEs IN VIETNAM

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 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 Prof Dr TU VAN BINH Assoc Prof Dr 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 Research background 1.2 Overview of SMEs in Vietnam 1.3 Research gap and research objectives 1.3.1 Research gap 1.3.2 Objectives of study 1.3.3 Research questions 1.3.4 Research limitation and scope 9 12 13 14 CHAPTER 2: LITERATURE REVIEW 15 2.1 Theoretical basis 2.1.1 Theory of the Firm 2.1.2 The Resource-based view 2.1.3 The Endogenous Growth 2.1.4 The Managerial Decision-Making 15 15 19 20 21 2.2 Research constructs 2.2.1 Social capital 2.2.2 Entrepreneurial Orientation 2.2.3 Innovativeness 2.2.4 E-business 22 23 37 40 44 2.3 Related Studies 45 2.3.1 Theoretical basis for the relationship between social capital and innovativeness 45 2.3.2 Theoretical basis for the relationship between social capital and EO 48 2.3.3 Theoretical basis for the relationship between social capital and E-business49 2.3.4 Theoretical basis for the relationship between EO and firm performance 52 2.3.5 Theoretical basis for the relationship between innovativeness and firm performance 58 2.3.6 Theoretical basis for the relationship between E-business and firm performance 60 2.4 Hypothesis Development 65 TABLE OF CONTENTS 2.4.1 Effect of Innovativeness to Firm performance 2.4.2 Effect of Entrepreneurial Orientation to Firm performance 2.4.3 Effect of E-business to Firm performance 2.4.4 The contributed effect of endogenous social capital CHAPTER 3: RESEARCH METHODOLOGY 65 66 67 68 73 3.1 Research methodology 3.2 Research Process, Design and Ethics 3.3 Research Model 3.3.1 The endogenous effect in research model 3.3.2 Extended Regression Model (ERM) 3.3.3 Instrumental variable (IV) 73 74 75 77 80 81 3.4 Measurements 3.4.1 Measurement of Entrepreneurial orientation 3.4.2 Measurement of Corporate social capital 3.4.3 Measurement of Firm Performance 3.5 Proposed Analysis Framework 86 86 87 89 93 3.6 Research data 3.6.1 Data collection 3.6.2 Data analysis 3.6.3 Sampling methodology 94 94 94 95 CHAPTER 4: EMPIRICAL ANALYSIS 4.1 Changes in enterprises amount in Vietnam 4.2 Endogeneity and its contribution to the study 4.3 Measures of variables and hypotheses testing 97 97 101 102 CHAPTER 5: CONCLUSION AND RECOMMENDATIONS 115 5.1 Conclusion 115 5.2 New points 115 5.3 Theoretical contributions 117 5.4 Managerial contributions 118 5.5 Recommendations 119 5.6 Limitations 122 REFERENCES 124 TABLE OF CONTENTS 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 (considering SalesGrowth and SCNetIntensity) 105 Table 4.7 Estimated result of Extended Regression Model Group (considering LabourGrowth and SCNetIntensity) 108 Table 4.8 Estimated result of Extended Regression Model Group (considering SalesGrowth and SCNetPeople) 110 Table 4.9 Estimated result of Extended Regression Model Group (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 APPENDIX 2: STATA RESULTS Model 1a: considering SalesGrowth and SCNetIntensity Model 1b: considering SalesGrowth and SCNetIntensity Model 3a: considering SalesGrowth and SCNetIntensity Model 4a: considering SalesGrowth and SCNetIntensity Model 1b: considering LabourGrowth and SCNetIntensity Model 2b: considering LabourGrowth and SCNetIntensity Model 3b: considering LabourGrowth and SCNetIntensity Model 4b: considering LabourGrowth and SCNetIntensity Model 1c: considering SalesGrowth and SCNetPeople Model 2c: considering SalesGrowth and SCNetPeople Model 3c: considering SalesGrowth and SCNetPeople Model 4c: considering SalesGrowth and SCNetPeople Model 1d: considering LabourGrowth and SCNetPeople Model 2d: considering LabourGrowth and SCNetPeople Model 3d: considering LabourGrowth and SCNetPeople Model 4d: considering LabourGrowth and SCNetPeople ... 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 Prof Dr TU VAN BINH... Firm performance of SMEs in Vietnam 1.2 Overview of SMEs in Vietnam According to VCCI data, SMEs now account for about 98.1% of all businesses in Vietnam In 2019 alone, more than 38,000 SMEs were... defining social capital as a resource that inherits in the social network tying an actor to other actors In this way, social capital can help explain the difference in the level of success of individuals