Summary of phd thesis research on the possibility of participating in global production network of vietnamese garment and textile enterprises

MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY 9999 Oace SUMMARY OF PHD THESIS RESEARCH ON THE POSSIBILITY OF PARTICIPATING IN GLOBAL PRODUCTION NETWORK GARMENT OF VIETNAMESE AND TEXTILE ENTERPRISES Major: BUSINESS ADMINISTRATION Code: 9340101 TRAN THI THU TRANG HANOI - 2023 The thesis is completed at: Foreign Trade University, 91 Chua Lang, Dong Da, Hanoi Science instructor: Assoc., PhD Bui Anh Tuan Assoc., PhD Ta Van Loi Reviewer | Reviewer 2: Reviewer 3: INTRODUCTION Urgency of the topic Research on the factors affecting the possibility of enterprises to participate in global production network has been carried out in recent years However, most studies are based on the impacts of internal factors on the possibility to participate in global production network (Harvie et al., 2010; Wignaraja, 2012; Wignaraja, 2013; Arudchelvan & Wignaraja, 2015) Theoretically, there has been no research that has established a model reflecting the impacts of internal and external factors on the possibility of enterprises to participate in global production network Although export turnover of Vietnam's textile and garment industry in recent years has grown rapidly and achieved impressive achievements, in fact 70% of export value of Vietnam's textile and garment industry comes from FDI enterprises Domestic enterprises only contribute 30% of total export turnover (Cue Xite tién Thuong mai, n.d.) This shows that the export of the textile and garment industry mostly comes from FDI enterprises Domestic textile enterprises have not really participated in global production network of the industry, or only modestly participated in the garment stage in the textile and garment chain Strengthening the possibility to participate in global production network of textile and garment industry helps Vietnamese enterprises produce high-tech goods, which becomes extremely urgent On that basis, the identification and quantification of impacts of internal and external factors on the possibility to participate in global production network of Vietnamese textile and garment enterprises is a matter of practical importance Thereby identifying opportunities, challenges and proposing appropriate solutions to enhance the participation capacity of Vietnamese textile and garment enterprises in global production network Therefore, the author selected the topic "Research on the possibility of participating in global production network of Vietnamese textile and garment enterprises” as the research topic Research objectives, questions and tasks 2.1 Research questions - What is the possibility of Vietnamese textile and garment enterprises to participate in global production network? ~ What are factors affecting and how they affect the possibility of Vietnamese textile and garment enterprises to participate in global production network? ~ What are the theoretical framework and research model which is appropriate to study the intemal and external factors affecting the possibility of Vietnamese textile and garment enterprises to participate in global production network? - What recommendations can be suggested to enhance the participation of Vietnamese textile and garment enterprises in global production network? 2.2 Objectives of the study The research objective of the thesis is to evaluate the status of the possibility of Vietnamese textile and garment enterprises to participate in global production network, and build a model that reflects the impacts of internal and external factors on the possibility of Vietnamese textile and garment enterprises to participate in global production network In addition, the thesis also helps Vietnamese textile and garment enterprises to self-assess their possibility to participate in global production network, as a basis for making their internationalization policy 2.3 Research tasks To achieve the above general research objectives, the thesis has the following research tasks: — Overview of research works published in domestic and international markets related to the thesis topic to form the basic theoretical framework as the research basis of the entire thesis — Systematize and clarify some basic theoretical issues about the possibility of textile and — garment enterprises to participate in global production network Analyze the current situation of Vietnamese textile and garment enterprises’ possibility to participate in global production network — Test the impacts of internal and external factors on the possibility of Vietnamese textile and garment enterprises to participate in global production network — Propose solutions and recommendations to enhance the possibility of Vietnamese textile and garment enterprises to participate in global production network by 2030 Object and scope of the research 3.1 Research object: The thesis studies theoretical and practical issues about the possibility of Vietnamese textile and garment enterprises to participate in the global production network 3.2 Research scope — Spatial scope : The thesis studies the possibility of Vietnamese textile and garment enterprises to participate in the global textile and garment production network — Scope of time: The thesis researches and evaluates the current status of the possibility of participation of Vietnamese textile and garment enterprises in the global production network from 2010 to 2022 and proposes solutions to enhance the possibility of participating in the global production network of Vietnamese textile and garment enterprises by 2030 — Scope of content: The thesis only focuses on researching and testing the factors affecting the possibility of Vietnamese textile and garment enterprises to participate in the garment stage in the global production network of the textile and garment industry — Scope of subject: The thesis approaches mainly from the perspective of Vietnamese textile and garment enterprises, in particular examines the factors affecting the possibility of Vietnamese textile and garment enterprises to participate in the global production network Using the binary regression model, the author uses the data of Vietnamese garment enterprises because of the majority participation in global production network of Vietnamese garment enterprises 4, Research method To achieve the research objectives, the thesis uses two research methods: (i) qualitative research method and (ii) quantitative research method Qualitative research was carried out using in-depth interviews with five experts to determine the factors affecting the possibility of Vietnamese textile and garment enterprises to participate in the global production network Quantitative research was carried out with 202 Vietnamese garment enterprises through survey method Main research results and contributions of the thesis $.1 Theoretical meanings — The thesis has analyzed domestic and foreign researches on issues related to the global production network and participation in the global production network of Vietnamese textile and garment enterprises Since then, the thesis has synthesized a number of important factors affecting the participation in the global production network of enterprises — The thesis has succeeded in applying various theories and research results to establish a model reflecting the impacts of internal and external factors on the possibility to participate in the global production network of Vietnamese textile and garment enterprises With the data collected from Vietnamese garment enterprises, the study confirmed the positive impact of trade agreements, state management and foreign ownership on the possibility of enterprises to participate in the global production network $.2 Practical meanings — The thesis has tested the factors affecting the possibility to participate in the global production network of Vietnamese textile and garment enterprises by binary regression model The variables representing 03 multivariable scales in the model are trade agreement, state management, intermediary connection; along with other independent variables such as productivity, firm size, number of years of operation, foreign ownership, and education level of employees The variables of foreign ownership, trade agreement and state management havea statistically significant impact on the dependent variable with the accuracy of forecast rate of 76.7% — The results provide relevant businesses, agencies/organizations with scientific arguments to improve the participation capacity of textile and garment enterprises in global production networks This is one of the important factors to develop and implement policies and solutions to promote the development of Vietnam's textile and garment industry Besides, the results will also help enterprises to self-assess their possibility to participate in the global production network as a basis for making their internationalization policy CHAPTER LITERATURE REVIEW OF FACTORS AFFECTING THE POSSIBILITY OF PARTICIPATING IN GLOBAL PRODUCTION NETWORK OF ENTERPRISES IN TEXTILE AND GARMENT INDUSTRY 1.1 Overview of research works on global production networks Theoretical framework of global production network (GPN), was originally developed by researchers in Manchester and their collaborators (Henderson et al., 2002; Coe et al., 2004) The first theoretical basis for global production network is commonly known as GPN 1.0 (Coe et al., 2004; Hess and Yeung, 2006) GPN 2.0 is based on the theoretical analysis of the network of actors, which still includes three factors: power, values, and embeddedness between the parties in the network like GPN 1.0, and provides an advanced theoretical framework to explain the causal relationship between global production network configurations and uneven development across regions of the global economy (Coe & Yeung, 2015; Coe & Yeung, 2019) 1.2 Overview of research works on the global textile and garment production network The global textile production network is a retailer-dominated network characterized by the exclusive brand names that often includes the store's name (Coe et al., 2008; Coe & Yeung, 2015, Coe & Yeung, 2019) The global production network of the textile and garment industry is an interdisciplinary network consisting of the raw material supply network, the parts supply network, the garment production network, the export network and the marketing network (Gereffi, 1994) The global textile production network is a highly fragmented production network with many small and inefficient enterprises in both developed and developing countries (Lane & Probert, 2006; Lane & Probert, 2009) 1.3 Overview of research on the possibility of enterprises to participate in global production network in general and in textile and garment industry The studies on the possibility of enterprises to participate in the global production network are mostly done in terms of the barriers that enterprises need to face and overcome to participate in the global production network The participation of firms in the global production network depends on the interconnected nature of the firms and their positions in the network (OECD, 2019b) Digital transformation has reduced the cost of trade, increasing the possibility of businesses to participate in global trade However, costs and barriers to trade, access to information, technology, finance and connectivity are all issues that need to be addressed to increase the possibility of enterprises to participate in the global production network The possibility to join the global production network in previous studies has been analyzed in terms of both global supply chain and regional economic integration The special issue of the Southeast Asian Economic Review in April 2017 published studies on the participation of SME of Southeast Asian countries in regional economic integration including Laos, Myanmar, Thailand, Cambodia, Vietnam, Philippines, Indonesia (Lee et al., 2017) 1.4 Overview of research on factors affecting the possibility of enterprises to participate in the global production network Basically, enterprise-level studies are usually carried out in a group of countries or a specific country, which is not many Most studies have been conducted on SME enterprises in developing countries (Harvie et al., 2010; Wignaraja, 2012; Wignaraja, 2013; Arudchelvan & Wignaraja, 2015, World Bank, 2016) Urata & Baek, 2021) The first direction of research suggests that there are two groups of influencing factors: internal factors and external factors (Urata & Baek, 2021), (World Bank, 2016) Internal factors include labor productivity, firm size, foreign ownership and technological capabilities External factors include openess of FDI and trade flows, infrastructure, logistics and government policies The second direction of research is to analyze and evaluate internal factors of enterprises affecting the participation of enterprises in the global production network (Harvie et al., 2010; Wignaraja, 2012; Wignaraja, 2013) ; Arudchelvan & Wignaraja, 2015; Lu et al., 2018) 1.5 Overview of studies on the participation and possibility of Vietnamese textile and garment enterprises to participate in the global production network Most of the studies by Vietnamese authors analyzed the participation of enterprises in the value chain of the textile and garment industry (Dinh Cong Khai & Dang Thi Tuyet Nhung, 2011; Ha Van Hoi, 2012; Nguyen Van So, 2016; Nguyen Van Huan, 2017; Nguyen Thi Thu Hang & Do Thanh Luu, 2017; Dang Duc Anh & Dang Vuong Anh, 2021) Research on the participation of Vietnamese textile and garment enterprises in the global production network is only a few (Nguyen Dinh Thi Ai Lam, 2020), 1.6 Research gap (1) There are almost no studies affecting the possibility of enterprises (2) There is no research at firm (3) It is necessary to study and Chuc et al 2018; Nguyen Ngoc Anh et al., 2019; Le analyzing the possibility to participate and the factors to participate in the global production network level in a particular country, especially in Vietnam consider new factors suitable to the characteristics of Vietnam's textile and garment enterprises in the context of Vietnam to analyze the impacts on the possibility of the global production network (4) Studying the possibility to join the global production network of enterprises in the textile and garment industry is an interesting research topic, with many theoretical and highly applied exploitation directions in management activities (5) There is no research that analyzes and synthesizes the impacts of internal and external factors affecting the possibility to participate in global production network of Vietnamese textile and garment enterprises (6) There is no research to build and test research hypotheses, explaining the impacts of factors on the possibility to participate in the global production network CHAPTER THEORETICAL BASIS AND HYPOTHESES ON FACTORS AFFECTING THE POSSIBILITY OF PARTICIPATING IN GLOBAL PRODUCTION NETWORK OF TEXTILE AND GARMENT ENTERPRISES 2.1 Global production network 2.1.1 Concept of Global production network Global Production Network (GPN) is understood as an organizational arrangement coordinated by a leading global company, consisting of interconnected corporate and non- corporate actors to produce goods or services in many different locations to serve markets around the world (Dicken & Henderson, 2003) 2.1.2 Actors in the global production network 2.1.2.1 Firms - Leading firms - Strategic partners - Independent manufacturers - Clients 2.1.2.2 Non-firms - State - International organizations Non-state organizations - Logistics intermediaries 2.1.2.3 Intermediaries - Financial intermediaries - Standard intermediaries 2.1.3 Classification of global production networks 2.1.3.1 Strategic partnership model Strategic partnership model is one in which a leading global company hires another company as a strategic partner to provide partial or complete solutions to its product or service offering for key customers This model is common in manufacturing industries such as apparel, information technology and transportation service industries 2.1.3.2, Leading company model The second model is a leader-centred global production network organization model, in which the leading company dominates and controls the entire network This pattern is commonly observed in industries such as automotive, information technology, and banking 2.2 Global textile and garment production network 2.2.1 Overview of global textile and garment production network Gary Gereffi (1994) firstly provided the theories of the global chain of goods (GCC) in the textile and garment industry Then, the theory of the global textile and garment chain was gradually replaced by the global textile and garment value chain theory, which emerged in the early 2000s (Coe et al., 2004) The global production network can be understood as a combination of different networks, also known as "networks of networks" Agnew, 2016), (Stephenson & 2.2.2 Features of the global textile production network = Global textile and garment production network is one of the most fragmented in production, characterized by many small, labor-intensive factories (Gereffi, 1999) ~The current textile and garment production network has almost completely shifted from developed countries to developing countries (Cammett, 2006) ~The ultimate buyer or consumer is the one who captures value and can have significant impacts on the production of businesses in the network (Lane & Probert, 2009) ~The apparel industry consists of distinct product segments: the manufacture of basic goods and the manufacture of fashion goods (Gereffi, 1994) = GPN has a negative impact on workers and their working conditions due to unequal distribution of values and violations of labor standards (Lane & Prober, 2009; Coe & Yeung, 2019) 2.2.3 Global production network model of the textile and garment industry For the global production network of the textile and organizational models represent three different concepts: model production networks, model of intra-industry intersection of networks, and interdisciplinary matching model between the textile garment industry, three of aggregation of many many global production and garment industry and other industries in different global production networks (Coe & Yeung, 2015) 2.3 Factors affecting the possibility of textile and garment enterprises to participate in the global production network 2.3.1 Participation of enterprises in the global production network 2.3.1.1 Concept of global production network participation is when a company carries ‘out any form of activity in the production network, i.e as a direct exporter, indirect exporter ora combination both (Wignaraja, 2012; Zhang & Akhmad, 2013; Duval & Utoktham, 2014; Wignaraja, 2015, Dollar & Kidder, 2017, Nguyen Ngoc Anh et al., 2019; Herlina & Kudo, 2020), 2.3.1.2 Levels of participation There are four levels of participation in the global textile and garment production network: The high levels are tier and tier 2, potentially related to skills, technology, knowledge, creativity and value added, and higher creativity, as well as pricing power and brand presence (Abonyi, 2005) Levels and relate to lower skills, technology, knowledge, innovation and value-added activities, as well as the need to compete on costs = - 2.3.1.3 Benefits of joining global production network Improve the technical capacity of enterprises Increase demand for businesses’ existing products and services Build credibility and trust of businesses, helping businesses easily access finance, attracting investors as well as human resources Provides businesses with a gradual and sustainable way to internationalize 2.3.2 Possibility of textile and garment enterprises to participate in the global production network 2.3.2.1 Conditions for participation of textile and garment enterprises in the global production network Condition for enterprises to join the global production network is to synthesize all the elements that the business needs to be able to carry out any form of activity in the production network 2.3.2.2 Concept of the possibility of participating in the global production network of textile and garment enterprises Possibility of textile and garment enterprises to participate in the global production network is the probability which enterprises are able to become a part at any level in the global production network of the textile and garment industry by direct and/or indirect exporing when there are certain conditions (Heckman, 1979) 2.3.3 External factors affecting the possibility of textile and garment enterprises to participate in the global production network 2.3.3.1 Openess to trade and foreign direct investment Openness to trade and foreign direct investment is the removal or reduction of restrictions or barriers to the free exchange of goods and investments between countries (Banton, 2021) 3.3.3.2 Education level The availability of highly educated people is an important factor for a domestic company to participate in the global production network (Urata & Baek, 2021), (Kowalski, 2015, Ignatenko, 2019) 2.3.3.3 Infrastructure 10 2011); (2) take advantage of MNC's strategy of building a global production system (Harive et al., 2010; Wignaraja, 2012, Urata & Baek, 2021) 2.3.4.5 Education level of employees Higher worker education is often associated with the development of more effective business strategies and faster technological learning that can provide competitive advantages at the enterprise level (Van Dijk 2002; Dunas-Caparas 2006) 2.3.4.6 Technology level Previous empirical studies have shown that firms' technological capabilities contribute to exports (Zhao and Li 1997; Hobday 2001; Rasiah 2004; Wignaraja 2002, Wignaraja 201 1) 2.3.4.7 Access to finance Manova (2013) found that financial constraints impede exports For studies of firms’ participation in GVCs, Harvie et al (2013) and Lu et al (2018) found a significant negative effect of financial constraint on participation in global production network CHAPTER SITUATION AND POSSIBILITY OF JOINING THE GLOBAL PRODUCTION NETWORK OF VIETNAM TEXTILE AND GARMENT ENTERPRISES 3.1 Current status of Vietnam's participation in the global textile and garment production network 3.1.1 In terms of import and export Textile and garment import and export turnover: Textile is an industry with high export turnover and growth rate and is one of the key export sectors, accounting for 12-16% of the country's total export turnover (B6 Céng Thuong, 2022) Import value of textiles and garments tends to increase - decrease according to the increasing - decreasing trend of export turnover, however, the growth rate of imports is lower than the growth rate of exports 3.1.2 In terms of attracting FDI The textile and garment industry is the industry that contributes nearly 40 billion USD to exports in 2021, attracting a lot of foreign direct investment (FDI) Since the Foreign Investment Law was passed in 1987, the textile and garment industry is one of the first industries to receive direct investment capital from foreign investors The total number of FDI projects in the period 1988 to 2016 was 2247 projects with a total registered capital of nearly 26 billion USD 3.2 Status and possibility to join the global production network of Vietnamese textile and garment enterprises 3.2.1 Positioning Vietnamese garment enterprises in the global production network 1I From a value chain perspective, global buyers are large companies in Europe, the United States and Japan They will place orders from major manufacturers in Hong Kong or manufacturers in Taiwan and Korea These manufacturers will purchase goods directly from Vietnamese companies, through local representative offices in Ho Chi Minh City, Binh Duong, Dong Nai or Hanoi, or through purchasing offices in Hong Kong, the organizing center of the global apparel industry Vietnamese garment enterprises engage in simple manufacturing and processing activities, most of which require a lot of labor and low technology content These are cutting, sewing, assembling, finishing, packing, shipping activities that account for only 5-7% of the value in the global value chain (including import procedures) (Ha Van Héi, 2012) Vietnamese garment enterprises have not yet assumed the role of a leading company in the production network However, Vietnamese garment enterprises have participated at all remaining levels in the global production network, but the number of enterprises participating is a lot From the perspective of members of the production network, Vietnamese garment enterprises join the global production network as a common supplier Considering at the level of participation in the global production network, Vietnamese garment enterprises participate at all levels, especially FDI companies, large corporations often hold the position of first-tier suppliers to the world leading companies in the global production network 3.2.2 Level of participation in the global production network of Vietnamese garment enterprises Vietnamese garment enterprises have not yet assumed the role of a leading company in the production network However, Vietnamese garment enterprises have participated at all remaining levels in the global production network, but the number of enterprises participating at each level varies widely From the perspective of members of the production network, Vietnamese garment enterprises join the global production network as a common supplier Considering at the level of participation in the global production network, Vietnamese garment enterprises participate at all levels, especially FDI companies, large corporations often hold the position of first-tier suppliers to the world leading companies in the global production network 3.2.3 Role of Vietnamese garment enterprises in the global production network - Promoting competition, investing in machinery and technology, contributing to increasing production capacity and technological innovation of the global production network ~ Increasing its role in the global production network, contributing to high value creation activities, creating structural shifts in the global production network of the textile and garment industry ~The advantage of Vietnamese garment enterprises is also a suitable choice when the US and China have not yet resolved the issues related to the trade war 12 3.2.4 Status of participating in the global production network of Vietnamese garment enterprises According to the General Statistics Office, in 2019 Vietnam had 8,778 garment enterprises nationwide In which, 921 enterprises, accounting for 10.5% of the total number of garment enterprises in Vietnam, join the global production network The number of enterprises that have not yet joined the global production network is 7,857, accounting for 89.5% of the total number of enterprises Based on equity ‘The number of enterprises with domestic capital participating in the global textile and garment production network is 295, accounting for 32% of the total Up to 99.2% of enterprises that have not yet joined the global production network are enterprises with domestic capital Based on export method 65% of Vietnam's textile and garment enterprises are still producing in the form of CMT, which means simple processing, cutting and packaging; only about 20% follow the form of contract production, self-managed materials (FOB); 10% of OEMs can be autonomous in production activities and 5% of ODMs can design themselves (Pham Sy Thanh et al., 2020) Depends on the size of the business Large enterprises account for 17.7% of the total number of enterprises participating in the global production network Of the more than 7,800 Vietnamese garment enterprises that have not yet joined the production network, there are 7,259 small and medium enterprises Based on region ‘There are more than 500 enterprises in the South, in the Southeast region participating in the global production network, accounting for 57.80% The region with the second largest proportion of garment enterprises participating in the global production network is the Northern Delta This area has nearly 400 businesses, accounting for 38.24% 3.2.5 Assessing the possibility of Vietnamese textile and garment enterprises to participate in the global production network 3.2.5.1 Advantage (1) Vietnamese textile and garment enterprises have been involved in the global production network for more than two decades (2) Actively participate in the global production network by upgrading production activities from simple processing to activities of raw material purchasing, product design, and branding (3) In terms of the level of participation in the global production network, Vietnamese garment enterprises have been participating at all levels (4) Vietnamese textile and garment enterprises receive a lot of support from the government such as trade policies, subsidies, FDI promotion, investment and industrial cluster development 13 3.2.5.2 Disadvantages (1) In terms of perspective of value creation, most Vietnamese garment enterprises still only engage in simple, labor-intensive, standardized and low-value outsourcing activities (2) The majority of Vietnamese textile and garment enterprises are small and medium sized enterprises with limited financial, technological and human resources (3) The connection network of Vietnamese textile and garment enterprises at home and abroad is still fragmented and weak 3.3 The current situation of factors affecting the participation in the global production network of Vietnamese textile and garment enterprises 3.3.1 External factors 3.3.1.1 Openness to trade and foreign direct investment By January 2022 , Vietnam has successfully signed 15 Trade Agreement and is in the process of negotiating two Trade Agreements Trade agreements contribute to strengthening trade relations between Vietnam and partners, removing trade barriers, helping to increase the level of economic integration with nearly 100 partners in market areas largest in the world such as Northeast Asia, Southeast Asia, Europe, America and Asia-Pacific 3.3.1.2 Education level: Labor force who only graduated from lower secondary school accounted for 61.2% of the total number of employees in 2020 The number of workers who graduated from high school and had professional and technical qualifications accounted for only 38.8% (JICA, 2022) The majority of employees in enterprises are still elementary with less than three months of training, accounting for 75.3%, the rest are college and intermediate level about 24.7% Vietnam's labor skills only reached 46/100 points, ranked 103, much lower than the ASEAN-6 group (Nguyén Hanh, 2021) 3.3.1.3 Infrastructure According to Bloomberg ( 2017), Vietnam's investment in infrastructure reaches an average of about 5.7% of GDP annually, which is the highest level compared to other countries in the ASEAN region (Indonesia and the Philippines are close to each other: 3% for Thailand and Malaysia less than 2% ) 3.3.1.4 Logistics system: The logistics system including logistics infrastructure, logistics services and logistics support activities in Vietnam in recent years has shown a fairly rapid development in road infrastructure, seaway infrastructure, shipping forwarding services, warehousing, customs 3.3.1.5 State management: - routes Vietnam's textile and garment development strategy Policies to promote supporting industry in general and logistics services such as 14 - Policies to promote supporting industry in the textile and garment industry - Preferential regulations for supporting industry development - Financial policies promote the development of supporting industries of the textile and 3.3.1.6 garment industry Connection intermediary Intermediaries such as the Vietnam Textile and Apparel Association, VCCI and the Trade Promotion Agency play a very important role in building and developing customer networks, positively influencing participation in the global production network of Vietnamese garment enterprises 3.3.2 Internal factors 3.3.2.1 Productivity In the period of 2017 - 2021, Vietnam's productivity growth rate is 5.8%, higher than the ASEAN average, just behind Cambodia, but still lower than China (7%) and India (6%) (JICA, 2022), 3.3.2.2 Enterprise size More than 80% of Vietnamese garment enterprises are small and medium enterprises Large garment enterprises tend to participate more in global production networks The proportion of large enterprises participating in the global production network compared to the proportion of enterprises not participating in the global production network is 17.7% and 1.1% respectively 3.3.2.3 Number of years of business operation Most of the garment enterprises in Vietnam have been operating for more than 10 years, accounting for about 65% of the total number of enterprises (the author self-aggregates on the data of the General Statistics Office 2020) 3.3.2.4 Foreign ownership: The FDI sector contributes about 60% of Vietnam's total garment export value This has made the domestic garment enterprises increasingly dependent on this business block The reason is that with strong capital, large investment projects, and extensive international customer relations, FDI enterprises have many advantages over domestic enterprises 3.3.2.5 Education level of employees: For the garment industry, labor is mainly self-taught and self-trained by tutoring in factories The level of labor in the industry is very low, only about 15% of workers in the industry have intermediate or higher degrees and there is a shortage of workers, especially trained workers 3.3.2.6 Technology level: For Vietnamese garment enterprises, applying and improving technology is a dilemma because it depends on (1) the nature of technology investment is inefficient when enterprises 15 still mainly use employing untrained manual labor, implementing stamping processes (Nguyễn Hạnh, 2021); (2) government applies a preferential corporate income tax policy to enterprises that employ a lot of female employees, which not invest much in advanced and modern equipment, technology and production lines; (3) the level of readiness for the industrial revolution 4.0 of garment enterprises is still at the average level with 2.73/5 points; (4) the management system can nott keep up, so it doesn't operate efficiently 3.3.2.7 Access to finance Only about 60% of SMEs have access to finance from official credit sources, which are banks, and over 40% of businesses rely on commercial credit and loans from relatives For garment enterprises that export by simple processing, they are less pressured to access finance because they are provided with raw materials by partners, not have to arrange capital sources to implement contracts CHAPTER RESEARCH METHODS AND RESEARCH RESULTS 4.1 Process of research —| | J Evaluate rests of Cronbach Alpha ee ‘Total Variable Correstion Coefficient | Grenkach Apa Biplaenen hearty degre of | aoe Pause er ‘observed variables Binary logistic + EEA ‘Test model el andand Results and implications Figure 4.1 Process of research 4.2 Research methods 4.2.1 Qualitative research In-depth group interview (Ist time): The author discussed with five experts, including two researchers in related fields and three managers of three Vietnamese garment enterprises 16 ‘The expert interviews were conducted in the form of face-to-face meetings and telephone interviews Interview time for each expert is about 45 minutes - 60 minutes Through expert interviews, the author has completed the scale for the dependent variable and the group of independent variables belonging to factors inside the enterprise Formal research model and formal research hypothesis _— Possibility of participating in global production 3] setworkof Vietnam omen! eateries coanectisty Ha, HS, H6, H7, HS | Internal factors Productivity Fim size ‘Yeurs of firm operation Foreign ownership “Education level ofemployees External factors Figure 4.2 Formal research model Possibility of Vietnamese garment enterprises to participate in the global production network is the probability of participation of Vietnamese garment enterprises in the global production network, expressed by the function: P(Y=1) ‘The relationship between P(Y=1) and the influencing factors will be represented by the equation: Or P(Y=1) = I/[1+e(BX)] ¬ SEY= 4X) = eta sbi Be + BX) FD In which Bo, Bi, By: regression coefficient Xo,X1, Xk: independent variables Formal research hypotheses: H+: Trade Agreement has a positive correlation with the possibility of Vietnamese garment enterprises to participate in the global textile and garment production network H2+: State management has a positive correlation with the possibility of Vietnamese garment enterprises to participate in the global textile and garment production network 17 H3+: Intermediaries connectivity are positively correlated with the possibility of Vietnamese garment enterprises to join the global textile and garment production network H4+: Productivity is positively correlated with the possibility of Vietnamese garment enterprises to participate in the global textile and garment production network H5+: Firm size has a positive correlation with the possibility of Vietnamese garment enterprises to participate in the global textile and garment production network H6+: Number of years of operation is positively correlated with the possibility of Vietnamese garment enterprises to participate in the global textile and garment production network H7+: Foreign ownership has a positive correlation with the possibility of Vietnamese garment enterprises to participate in the global textile and garment production network H8+: Education level of workers is positively correlated with the possibility of Vietnamese garment enterprises to participate in the global textile and garment production network 4.2.2 Quantitative research The sample was selected by the convenience sampling method Surveys are submitted through three forms: paper survey submission, online submission via Microsoft Form link, and phone call The number of ballots distributed was 220, the results obtained were 214 answer sheets Going through the cleaning process, 12 answer sheets were invalid and 202 valid - with a pass rate of 94% All valid samples will be data processed by SPSS 20.0 software to conduct data analysis steps such as descriptive analysis of the research sample to conduct data analysis steps such as descriptive analysis of the research sample, reliability analysis of the scale, exploratory factor analysis and binary regression analysis 4.3 Data processing 4.3.1 Test Cronbach's Alpha scale Cronbach's Alpha method is used to evaluate the reliability of research tools (Hair et al., 2006) The purpose of Cronbach's Alpha is to find out if the observed variables have the same measure for a concept to be measured 4.3.2 Exploratory Factor Analysis (EFA) Exploratory Factor Analysis (EFA) method helps us to evaluate two important values of the scale, which are convergence value and discriminant value Bartlett's test has statistical significance (Sig 0.05): This is a statistical quantity used to consider the hypothesis that the variables are not correlated in the population If this test is statistically significant (Sig 0.05), the observed variables are correlated with each other in the population 4.3.3 Binary logistic analysis 18 Binary regression is a statistical method used to estimate the probpossibility that an event will occur The feature of binary regression is that the dependent variable has only two values, and The binary regression equation is determined on the basis of estimating the probpossibility of occurrence of the event Y (probpossibility) when the value ofX is known ‘The dependent variable has two values and 1, with being no event and being the occurrence of an event So, the event probabilities (Y=1) range from to 4.4 Descriptive statistical analysis In the thesis, there are variables belonging to frequency statistics and are fully described by the PhD student as shown in Table 4.2 Table 4.2 Sample descriptive statistics by enterprise information Content Features State own companies Types of business | 100% domestic capital companies Frequency | 100% foreign ownership Foreign ownership Possibility participatingof in global production peor of ‘ietnamese garment enterprises Venture business Total 17 123 21 (%) 84 60.9 10.4 41 202 203 100.0 Total 202 100,0 Non-participation 67 33.2 No foreign ownership Foreign ownership Participation Total 140 62 135 202 69.3 30.7 66.8 100,0 4.5 Check the results 4.5.1 Check the relipossibility of the scale The results of Cronbach's Alpha analysis of the scales for the factors in the model show that the scales are reliable enough for research 4.5.2 EFA discovery factor analysis After checking the relipossibility of the scale using Cronbach's alpha method and through 03 times of analyzing EFA exploratory factors with the removal of 02 observed variables, QL4 and QL6, the remaining observed variables satisfied the criteria which presented in the research methods section 4.6 Binary Regression Analysis Regression coefficient test Table 4.18 Regression coefficient