Digital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of Vietnam

Digital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of VietnamDigital marketing and its relationship with digital orientation and technological innovation for SME performance in an emerging market: The case of Vietnam

INTRODUCTION

Rational of the study

Changes in digital technology development make changes in firm’s reaction

The rapidly evolving digital technology environment has a profound impact on businesses and necessitates continuous adaptation and transformation These changes in the digital landscape can significantly influence firms in various ways Accordingly, companies are progressively embracing digital technologies to optimize their business processes, improve customer satisfaction, and maintain a competitive edge Digital transformation entails the conceptualization and reconstruction of corporate processes and models to harness the potential of digital tools and data In addition, digital transformation facilitates the emergence of novel business models, including subscription-based services, platform-driven ecosystems, and sharing economy platforms (Garzella et al., 2021) To maintain relevance, it is imperative for firms to engage in the exploration and adoption of these models.

According to Khin & Ho (2019), companies that embrace and adapt to digital technology can achieve a competitive advantage by providing innovative products and services, responding rapidly to market changes, and staying ahead of industry trends In addition, digital channels and platforms can be set up and offer opportunities to expand markets beyond geographical boundaries Firms can reach global audiences, creating both opportunities and challenges in terms of localization and competition Overall, digital technology empowers firms to adapt to the changing business landscape, seize opportunities, and overcome challenges When strategically implemented, it can lead to improved firm performance across various dimensions, ultimately contributing to long- term success and growth.

With a fast digital technology system development, channels of e-commerce, networking, and online marketing are considered and interacted with by firm to push up the sales Firms with limited financial capability pay more attention to digital technology to promote its business (Telukdarie et al., 2023), in which digital marketing strategies through social media, internet, and e-commerce can help a firm to save cost.

As a result, small and medium sized enterprises (SMEs) often think of how to acquire more customers through various communications, in which integrated digital marketing plays a vital importance Integrated marketing communication is a fundamental and integral part of a company's marketing efforts, which combination of marketing channels, such as e-advertising, social media, public relations, and sales promotions are defined as integrated marketing communication (Ivanov, 2012) By embracing digital technology, SMEs can streamline their processes, improve efficiency, and reduce costs (Ardito et al., 2021) From adopting cloud-based solutions for storage and collaboration to utilizing e-commerce platforms for online sales, these enterprises leverage the potential of technology to facilitate their expansions (Bendig et al., 2023) As arguments above, the role of digital marketing is quite important for SMEs, they need to embrace new technologies and incorporate them into their business strategies to stay competitive It is essential for SMEs in emerging markets to understand the impact of digital technology development on their industry and be proactive in leveraging these advancements to drive growth and innovation within their organizations As argued by Malesios et al (2021), not only large companies, but also SMEs need a plan of long term investment effectively To do that, SMEs often set up a new vision of digital marketing innovation to maintain their market place (Thaha et al (2021).

The development of digital technology has forced enterprises to rethink their strategies, which digital marketing is considered Recently, companies have not hesitated to implement rapid digital transformation and digital orientation to keep up with the competitive market and approach digital marketing to improve operational and market efficiency According to Thaha et al (2021), digital marketing is a combination of marketing efforts using technology through e-commerce, internet media, social media to introduce products or services Likely, Taiminen & Karjaluoto (2015) also argued that digital marketing and social media create the potential for small business to effectively engage with both new and existing customer From the inception of digitalization and clear digital orientation, the provision of broadband connectivity has demonstrated its capacity to provide substantial prospects to SMEs (Nasiri et al., 2022).Additionally, Taiminen & Karjaluoto (2015) posit that digital marketing can be categorized into two distinct communication channels: one-way and two-way One-way communication can be characterized as the utilization of websites and email for transmitting information, whereas two-way communication channels encompass social media platforms and automatic communication platform (Chatbot) that facilitate the establishment of relationships between marketers and customers There is no doubt that the marketing effectiveness of SMEs is positively influenced by digital marketing, digital orientation and information technology capabilities (Sultoni et al., 2022). Accordingly, Sultoni et al (2022) also highlights the importance of leveraging digital marketing channels effectively to drive business growth and achieve strategic objectives It suggests that businesses should invest in various online platforms, such as social media, search engine optimization, and content marketing, to maximize their reach and impact In a study conducted by Telukdarie et al (2023), they delve into the impact of digital technology on marketing tactics and how it has shaped the industry. Furthermore, Telukdarie et al (2023) discuss the importance of integrating digital technology into overall marketing strategies They emphasize that businesses must embrace these advancements and adapt their approaches accordingly to stay competitive in today's fast-paced digital landscape.

In recent times, there has been a growing interest among researchers in doing empirical research on digital marketing techniques in order to enhance the understanding of company behavior (Nuseir & Aljumah, 2020) Digital marketing is deemed effective when a company has a robust resource foundation, including digital transformation resources, customer relationship management (CRM), and Chatbot(Abdelkader, 2023) Large companies in developed nations have an advantage overSMEs toward a fortified stronghold in emerging markets, because SMEs in emerging markets often encounter internal and external business barriers (Pingali et al, 2023).According to Hoskisson et al (2000), emerging markets are economies with fast economic growth and economic policies which foster the adoption of a free market system Emerging markets, unlike developed markets, are marked by substantial market heterogeneity, primitive infrastructure, limited resources, and unofficial competition,which may impede the innovation and economic development of companies, especially

SMEs However, the challenges are exacerbated when a firm's resources and competencies are lacking in strength.

The firm's deliberation on digital orientation approach and technological innovation

As mentioned by Nasiri et al (2022), digital orientation is a catalyst for technological innovation Firms with a strong digital orientation prioritize the use and integration of digital technologies in their operations, products, and services Once digital orientation is well established, the culture of continuous improvement and adaptation of the firm is maintained, it encourages the exploration of new technologies to enhance efficiency, effectiveness and customer experience Likely, Sultoni et al. (2022) also emphasize digital orientation is an integration of digital tools (e.g big data, digital platform) and technologies to achieve firm efficiency Shortly, digital orientation is crucial in the context of the increasingly digitalized world, where a firm use digital technology to facilitate the development of new products and services (Khin

The current extent to which SMEs employ digital marketing through channels of social media, e-commerce (Su et al., 2023), CRM (Galvão et al., 2018) and Chatbot AI (Artificial Intelligence) (Selamat & Windasari, 2021) and others relevant Although Bruce et al (2023) has an approach on studying digital marketing adoption of Ghana SMEs, this study mainly focuses on firm with intention to use digital marketing and confirm that digital marketing supports firms to improve the sustainable growth of SMEs While Nguyen et al (2022) have a general argument of social media on performance of 180 Vietnamese SMEs, which social media is played as mediator between market orientation and firm performance.

Actually, still some authors state that the strategic orientation is a domain, it can be an effective lever to improve effective development of the company (Chavez et al., 2020), but some SMEs do not seemly specialize in digitalization (Sultoni et al., 2022).

In fact, strategic orientation can be seeing more clearly once the company does market orientation and digital orientation However, in the context when the digital industry has developed quickly, business will be more difficulties when the company lacks a digital technology system This can be seen during the Covid-19 pandemic, some companies confuse to transfer the traditional sales to the online trade If the company does not update its online business system, e.g digital technology in business, it will be difficult for the company to promote sales activities Accordingly, Kindermann et al. (2021) discovered the contribution of digital orientation, it significantly supports high performance of firm This finding contributes to expanding the concept of digital orientation, in which digital orientation is one of the key strategies and plays an important role of firms’ business strategy From this standpoint, it gives a rise that this thesis needs to be interested in analyzing the investigation of how firm performance is impacted by the integration of digital marketing and digital orientation From this perspective, we can examine the inquiry regarding the manner in which a company's operational effectiveness is influenced by the amalgamation of digital marketing and digital orientation This attention surely is expounded upon within the context of this scholarly thesis.

Alraja et al (2022) conducted research within the Covid-19 pandemic, which examined the role of technological innovation in enabling organizations to effectively utilize resources, gain competitive advantages, and manage operations remotely The intricate nature of the correlation between technological innovation and SME performance arises from its susceptibility to multifarious influencing factors One of the key considerations pertains to the integration of technical advancements with pre- existing resources, including digital technology systems and strategies of digital orientation Most of firms think that once innovation is well done the survival of firm is stayed in longer (Ancona & Caldwell, 1987), because activities of innovation can help the enterprises to solve the competitive problems, improve the efficiency of firm,and create new ideas However, depending on sectors of service or manufacturing, the company generates appropriate strategies of technological innovation Such manufacturing firms concerns innovation on enhancing competency and skills of employees, while service firms concern innovation on building up competitive advantage through typical services (Mithani, 2017).

With the explosion of information technology, digital technology, and consumer demand changing faster and faster, the firms are confronted with adapting to the business environment toward digital orientation According to Lohe & Calabrò (2017), innovation is expensive, risky, and complicated process but it is necessary for the survival, the growth, and the renewal of any organizations It’s not only presented the capabilities of the firm to understand, capture and forecast the customer’s demand but also a firm’s propensity to engage in creativity Innovation requests the mobilization of external and internal resources (Subramaniam & Venkatraman, 2001; Terziovski, 2010a) The initial ideas for innovation are often started from the combination of current and new concepts toward a right business strategy based resources available (Lohe & Calabrò, 2017).

In the era of fast learning with fierce competition, the firm needs to develop innovative strategies to be survival The concept of innovation capability is applied to examine and utilize the company’s competitive advantages, in which the essential prerequisite is creations toward efficient ideas of innovation management Thus, creating a favorable environment to exploit innovative ideas of members in the company is essential The nature of innovation itself is the perception of a company that prioritizes the advancement of new ideas that create value across all operations This aspect emphasizes that innovation is not an inherent trait but rather a characteristic perceived within a company As we know, technological innovation affects the sustainable development of businesses, it has drawn increased attention in recent years from academics, corporations, and governments (Alraja et al., 2022) It is impossible to ignore the connection between technological innovation and sustainable development (Omri, 2020).

In short, the perception of a firm toward innovativeness depends on its commitment to promoting and implementing new ideas that result in tangible value across different areas of its business Companies that successfully embrace and prioritize innovation are more likely to adapt to changing market conditions, stay competitive, and drive sustainable growth A successful innovation must have an appropriate plan, in which its activities can combine with digital orientation and digital marketing to increase firm efficiency It is not easy for a firm with limited natural resources of digital technology to move towards digitalization At the conceptual level, a company applying a new technology is seen as a display of innovation and has an active role (Koellinger, 2008).

In fact, innovation performance in a company is determined by the market response of customers and competitors.

To address a competitive competency, innovative considerations of SMEs must be concerned in their business plan, such Falahat et al (2020) found significant contributions of product innovation and communication capacities with respect to digital marketing are important for SMEs Once the innovation and digital marketing are concerned well and address a target point of investment, the SMEs can save costs and lead to competitive advantages In addition, Falahat et al (2020) has different arguments about impacts of marketing capacity on the competitive advantage of SMEs in the developed countries such as the U.S and the developing countries such as Malaysia, which they found a non-significant effect of marketing communication capacity on the advantage of competition for SMEs in Malaysia Of which the explaining is SMEs pay attention to product innovation rather than marketing communication program investment.

Research background

The notion of digital marketing has evolved over time and is widely recognized as a strategic approach to stimulate the growth of products and services, facilitating the connection between items and customers within various marketplaces The efficacy of digital marketing can be ascribed to the endorsement of digitalization, which has emerged as the foundation for assuming the function of marketing strategy (Kannan &

Li, 2017) Digital marketing is commonly recognized as a multifaceted endeavor encompassing various activities, structures, and processes that are facilitated by the utilization of contemporary digital technology resources within organizations (Bala & Verma, 2018) It cannot be denied that the beginning of digital marketing has a dominant influence on the social media system and online communication of AI program, so online marketing is considered a goal in the early stages of digital technology, in which e-commerce is included (Su et al., 2023).

Due to fierce competition and alterations in consumer behavior during the era of digital transformation, enterprise motivations must be stable in order to achieve growth.

As argued by Rodrigo et al., (2022), intrinsic motivations (e.g voice, responsibility, job characteristics) and extrinsic motivations (e.g management, job conditions, personal relationship) cause companies geared towards digital social innovation However, The success and effectiveness of digital social innovation initiatives can indeed be influenced by the resources available of the firm According to Astuti et al (2020), the adoption of SMEs’ digital technology is depended on the resources available, in which digital orientation play an important role The dominants of digital technology is depended on digital transformation, once digital orientation is well planned, it helps to reduce difficulties and create business value for firm (Nasiri et al., 2022)

If looking back at previous studies, the corporate behavior and its business strategy responses are largely explained by the theory of RBV Therefore, İpek (2018) recruited the theory of Resource-Based View (RBV) to find out the connection between resources and capabilities of exporting firms in the emerging markets, e.g India, Malaysia Accordingly, İpek argued that firm resources are various, such as: organizational resources; production and R&D resources; managerial resources; experiential resources; financial resources; rational resources, human resources; knowledge-based resources; marketing-related resources; others resources In addition, İpek (2018) argued that prior scholars did not have a clear explanation of the capacity and market oriented resources of enterprises when applying the RBV The study has made an academic contribution the export behavior of firms is affected by existing resources and capacities Similarly, Barca (2003) also emphasized the internal resources of the firm, however the study did no consider resources of information technology.

Meanwhile, Barney (1991) argues that strategic resources are important to create competitive advantage However, to do this, firms need to know how to exploit existing technology, equipment and resources to serve business activities effectively Likely,Oduro et al (2023) also employ the RBV to explain how digital technology pays off and argue that a firm has resources that can be categorized into two categories: tangible and intangible values Tangible values encompass physical assets like machinery and equipment, while intangible values encompass non-physical assets such as reputation and company brand Enhancing the utilization of resources can lead to enhanced planning, resulting in increased productivity and operational efficiency Besides, the effective resource utilization is happened, when digital technology resouces and digial skill of employees must be harmoniously combined to improve the efficiency of digital resources According to Marhraoui (2023), digital skills are willing to adopt new technologies, e.g artificial intelligence and platform- based solutions, in which skills of data analysis and information management, e.g CRM are specific As a result, resouces of digital technology and employees’ digital skill are conceptualize in the RBV framework to enhance digital technology systems of the firm, but there is a limitation to study the aspect of coordination between digital technology and other resources, such as resources for digital skills of employees and technological innovation (Oduro et al., 2023) This is seen as a gap of study that is considered in this thesis.

As argued by Barney (1991), researchers turned to the RBV as a framework to elucidate the internal and external resources of enterprises Understanding internal resources is not a complex task, as they originate from pre-existing internal sources such as employee’s skill, technology, financial assets, and organizational structure The ability to establish and maintain relationships with external partners can be demonstrated through one's network relational capacity (Huggins & Thompson, 2013).

Based on previous studies, findings have a limitation in measuring the digital capabilities of enterprises specifically involved in creating digital marketing activation. Therefore, it is imperative to include a supplementary proposition concerning digital resources inside the framework of the RBV theory This is a research gap, because an analysis of the utilization of digital resources by SMEs in emerging markets is not seemly concerned well although the concept of digital marketing has been concerned more recently With positive changes in digital technology, enterprises pay more attention to look for opportunities to communicate with customers and build social media platform to communicate partners and stakeholders (Telukdarie et al., 2023). According to Thaha et al (2021), once a firm enters the business, it needs to clearly define the application of digital marketing to target appropriate customers Although digital marketing plays an important role to open the way entering the market, the technological innovation and digital orientation are indispensable for enterprises. Effects of technological innovation derived by digital technology cannot be ignored and preparation of digital skills of employees are also necessary It has a key role to cause the growth of firm (Sarsah et al., 2020).

It must be said that digital marketing becomes more effective and economical for enterprises Digital marketing belongs to the extra field of marketing and is concerned in the firm, also its development is pointed out by the market orientation of firm (Martin

& Javalgi, 2016) Digital marketing is a specialized branch of marketing that utilizes digital technologies (Nasiri et al 2022), such as social media platforms, mobile devices, e-commerce, artificial intelligence Chatbot and other digital channels Digital marketing incorporates various strategies and tactics to reach and engage with target audiences, in which content marketing, social media marketing, email marketing, social media (Kanaan et al., 2023), e-commerce (Su et al., 2023), CRM (Masrianto et al., 2022), and artificial intelligence Chatbot (Abdelkader, 2023) are taken into account. Because of digital technology development, digital marketing is seen as impossible to be missed in firms Due to a new point of marketing strategy during the digital era, academic contributions of digital marketing in the ground theory of firms are seemly lack of (Kannan & Li, 2017) It is important to note that digital marketing is a dynamic and evolving field, particularly it is a new theory that SMEs must recognize to exploit effectively Bad things can happen if SMEs do not know how to exploit digital marketing based on available digital technology resources and employee’s data skills.

Although SMEs have tried to comprehend marketing strategies through digital technology, the digital capacity to adopt digital marketing of SMEs seems to be confused, digital skills of employees are remained questions not to be answered Only 9% of the 60 million SMEs in the world are thought to use the internet for marketing (Umar et al., 2020) This indicates that 91% of them are still not making full use of the internet for marketing purposes It can be said that SMEs can benefit and improve their efficiency if they have a good knowledge of how to use digital technology in terms of financial constraints and digital channel capacity Particularly digital marketing is utilized to promote enterprises’ business and reduce acquisition costs Wang (2020) had a research approach on 167 international firms and concluded that the digital capabilities of enterprises grow with firm size That means the larger firms with the high digital skill, they make the higher performance Accordingly, the results found byWang (2020) that give us the idea to think about the approach of digital marketing ofSMEs and their digital capacity in emerging markets, such Vietnam and this is dominated and focused in this thesis.

The notions of digital marketing and innovation are intricately linked, as breakthroughs in technology have significantly altered the marketing environment in the era of digitalization (Noyola-Medina et al., 2018) Digital marketing utilizes a range of digital platforms and tools to establish connections with specific target groups, facilitate the promotion of products or services, and ultimately attain marketing objectives Technological innovation assumes a crucial role in influencing the strategies and techniques employed within the realm of digital marketing Although Noyola- Medina et al (2018) conclude that product innovation, process innovation, marketing innovation, and organizational innovation positively cause the digital marketing adoption of SMEs, the finding does not present an interaction between technological innovation and digital marketing Additionally, Azar & Ciabuschi (2017) conducted the research on 218 Swedish export firm ventures and confirm that the relationship between technological innovation and firm performance is significantly existed The research results have given an explanation on the role of organizational innovation and technological innovation to support exporting companies to expand the international market Unlikely, Rosenbusch et al (2011) studied the impact of SME innovation on firm performance, where innovation is determined by the process of internal innovation input (e.g expenditure and experience of R&D) and process of external innovation input (e.g sourcing of external technology and R&D collaboration) Several studies have also shown that the effectiveness of innovation depends on the mindset and dynamism of the business Indeed, Miller & Friesen (1982) conducted innovation research by conservative and entrepreneurial firms, the innovation here is only interested in innovation with respect to product lines, product design and service implementation.

Dynamic firms often have a leading approach with plans of technological innovation A combination between digital technology and market orientation creates innovation in product or service (Quinton et al., 2018) Digital orientation refers to the strategic mindset, while behaviors of an organization or individual emphasize on how to use digital tools to improve firm performance The drivers of innovation by digital orientation are crucial for fostering a culture of innovation and driving the development of new ideas, products, and processes (Sarsah et al., 2020) Wiklund & Shepherd (2003) applied the theory of RBV to review the capacity of a company and market orientation.

Currently, scholars pay more attention to explore the usage of digital technology capability of enterprises, which they can get more academic contributions with respect to digital capabilities of firm in RBV Evidently, Elia et al (2021) found a study related to the company's use of digital exports in its B2C strategy The results showed that digital competence is the core thing that helps the company to orient and access the export market rather than the previous traditional management Accordingly, the result found brings a contribution to theory of RBV, in terms of export companies, but this study does not specify digital capabilities by size of enterprises As argued by Wang(2020), large companies are no stranger to digital marketing and this issues is interested and published in previous studies SMEs in the emerging markets like Vietnam, digital marketing research is a gap of practice and academic Although there have been a few studies that have paid attention to digital technology and digital marketing (Bruce et al.,2023; Hawaldar e al., 2022; Kannan & Li, 2017), the deep analysis of the impact of digital marketing on SMEs and its interaction with other components, e.g technological innovation and digital orientation has not been popularized.

The research gap of study

The contribution of SMEs is various for the country’s economy, particularly those in developing nations, has been highlighted by the World Bank (Thaha et al., 2021). SMEs constitute a significant proportion of firms on a global scale and play a substantial role in facilitating job opportunities SMEs account for around 90% of enterprises worldwide and contribute to over 50% of the total employment opportunities available (Thaha et al., 2021) In developing nations, formal SMEs play a significant role by contributing around 40% of the national income, as measured by the Gross Domestic Product (GDP) (Thaha et al., 2021).

The rapid evolution of digital technology is directly impacting how SMEs in emerging markets react and adapt to market changes These firms must embrace technological advancements to stay competitive and relevant in today's fast-paced business environment By understanding how digital technology development influences their industries, SMEs can proactively adjust their business strategies, in which digital marketing is indispensable to capitalize on emerging opportunities and overcome potential obstacles According to the findings of Falahat et al (2020), although acknowledging the significance of digital marketing, the authors contend that SMEs prioritize product innovation over investments in digital marketing That means SMEs are willing to pay more cost for innovation rather than digital marketing investment As a result, the efficiency of those two considerations has not been verified, this is a gap of study and chance for this thesis intents to find out In addition, this thesis also aims to elucidate the potential impacts of the simultaneous interaction of digital marketing and technological innovation, and interaction of digital marketing and digital orientation on SME performance.

The current body of scholarly work on digital marketing mostly focuses on the concept of digital transformation and the use of digital platforms by large multinational companies in developed countries (Pingali et al., 2023) Similarly, Wang (2020) also states that digital marketing has been established on the fundamental principles of digital technology According to Sony & Mekoth (2022), to adapt industry 4.0, the firm must be proficient for nine technologies (e.g cloud computing, big data, the internet of things, auto robots, additive manufacturing, integration of system, cybersecurity, simulation, and augmented reality) employees should be equipped in the best way. Comparing to larger companies, the resources and capacity of employees equipped with digital technology skills are more advantages small companies (Heredia et al., 2022).

In fact, many questions about the digital skills of employees working in SMEs need to be found out These questions have not been investigated by previous scholars; it is seen as a research gap in this thesis.

In recent years, there has been a notable increase of studies to investigate how SMEs use digital marketing to promote their business (Taiminen & Karjaluoto, 2015; Thaha et al., 2021), but theoretical advancements regarding the digital marketing employed bySMEs in emerging nations have not garnered substantial attention Accordingly, this thesis contributes to the literature review on digital marketing by providing context and highlighting trends Besides that, the thesis brings a significant contribution to clarify the doubts and arguments of previous studies about the contribution of digital marketing depending on the resources and size of the business to improve SME performance. Additionally, this study also wants to compare the finding with the arguments of Halik et al (2021) with respect to the imbalance in business size when using digital marketing As a result, the finding of this thesis will fill the research gap in the theory of RBV, which shows how much digital marketing can be applied if SMEs have strongly available resources.

In fact, there is a lack of comprehensive evaluations and investigations about the limitations in the feasibility of SMEs in emerging markets like Vietnam when using digital marketing strategies While SMEs have made progress in recognizing the importance of digital technology and have started to adopt digital transformation, they have not yet focused on developing the digital skills of their personnel This is also seen a practical gap Once the precise gap is identified, the advantages of assisting small and medium enterprises in their growth will be amplified.

Behavioral theory of firm was develop by Cyert & March (1963), which firm behavior toward using digital technology resources for production and business is not widespread Although it is not strange in terms of digital marketing applications of multinational companies, the behavior of using digital marketing by SMEs is still hidden and has not been exposed This study expects to investigate how digital orientation can influence SME performance through the moderating of employees’ digital skills In addition, once analyzing the application of digital marketing by SMEs for business in emerging markets, it will be an exploration to partly measure how muchSMEs adopt available information technology resources for digital marketing to improve its performance This result is a meaningful contribution to enriching the theory of RBV and behavioral theory of firm for SMEs in the strategy of applying digital marketing.

Objectives of study

(1) To determine the function of digital marketing and its interaction with technological innovation and digital orientation influencing the performance of SMEs.

(2) To find out the impact of technological innovation and its interaction with digital orientation on SME performance.

(3) To examine the impact of digital marketing, technological innovation, and digital orientation on the performance of SMEs, in the context on the moderating effect of employees’ digital skills.

Research questions

(1) How does the function of digital marketing and its interaction with technological innovation and digital orientation impact on SME performance?

(2) How does the role of technological innovation and its interaction with digital orientation impact on SME performance?

(3) What is the impact of the moderating variable of employees’ digital skills on the association of digital marketing, technological innovation and digital orientation on SME performance?

Scope and limitation of study

This dissertation does not employ qualitative methodology The dissertation is mainly focused on the quantitative methodology, utilizing a large sample of Small and Medium Enterprises (SMEs) in Vietnam To overcome the limitation of the absence of a qualitative technique in the study, the dissertation proposes to utilize references from recently published papers with an emphasis on SMEs in both developed and developing nations The building of the research model is based on relevant earlier studies that are related to the survey conducted by the General Statistics Office (GSO) of Vietnam TheGSO questionnaire comprises a multitude of inquiries However, for the sake of this thesis's study model, only the questions pertaining to digital marketing, technological innovation, digital orientation, and employees' digital skills are chosen and employed.

Contribution of dissertation

The thesis will provide two major contributions First, the thesis findings will be presented as an academic contribution, with theoretical contributions discussed in detail Second, the research findings will provide a general picture of SMEs in emerging markets, such as Vietnam The research findings are also useful for business owners to reflect on how they have previously applied digital technology to digital marketing, allowing them to identify areas for improvement Furthermore, the study's findings serve as a useful reference for relevant scientists and university students who can use them in their research.

Overview of research methodology

To answer research questions, the thesis employs statistical models to test hypotheses proposed, in which the method of Ordinary Least Square (OLS) is taken into account The database used to run regression models is a source of the GeneralStatistics Office (GSO) of Vietnam, it is defined as a big secondary data.

Structure of the dissertation

Chapter I introduces the dissertation and provides background information on prior relevant investigations This serves to demonstrate the research gap and objectives of the study.

Chapter II provides a literature review, together with theoretical background and important issues Furthermore, hypothesis statements are also considered.

Chapter III outlines the research technique, focusing on the database used in the study and the research model as the primary components of the chapter. Chapter IV provides an overview of the data analysis and shows the findings that were investigated.

Chapter V provides the final analysis of the study, where the dissertation's findings are examined to demonstrate their academic significance and the originality of the research.

LITERATURE REVIEW

Theoretical background

2.1.1 The theory of the firm

The theory of the firm is basic for a perspective to think of organizational objectives and framework toward analyzing research problems Neoclassical economics' theory of the firm, which is a subset of the broader theory of value, was developed to examine how prices and the distribution of resources among various uses are determined (Barca, 2003) A production function that captures the underlying technology utilized to deploy labor and capital forces for the purposes of producing products and services serves as the firm's representation The common assumption is that this underlying technology will first experience increasing returns to scale, which implies a dropping average cost curve, and subsequently diminishing returns to scale, which will result in an increase in average cost.

The theory of the firm describes how firms are able to sustain competitive advantages in their industries (Hawkins, 1973) The main idea is that firms are bundles of assets brought together with a specific goal in mind The assets can be tangible or intangible, but they combine and form business strategies to better compete with other organizations The theory of firm suggests that firms will invest only if they can get a beneficial return on the investment (Hawkins, 1973) It is possible for organizations to create an internal environment of innovation, so that individuals have the skills and resources necessary to pursue innovative ideas, or firms can adopt an open innovation strategy by acquiring knowledge from external sources like customers, suppliers, and consultants At a time when information technology is developing like today, the theory of firm needs to be extended to the case of companies that have made innovations in approaching digital technology for business The research of this thesis is also a contribution to the expansion of theory of firm how to react the business environment toward organizational agility through adoption of digital model business (Kuusisto,2017).

The theory of the firm has been a major part in understanding how resources are allocated and decisions made in the marketplace It is based on four key concepts: (i) Organizational framework; (ii) managerial hierarchy; (iii) division of labor; (iv) economy of scale Scholars applied the theory of the firm to explain how managers in an organization can help increase profitability by optimizing process and reducing waste The core idea is that, in a market economy, an organization might be able to increase its performance by performing some tasks more effectively than its competitors The basic premise of the theory is that a person or group of people will establish an organization when it’s more efficient to do so than not The theory has been extensively studied and applied to many fields, especially business firms, but also religious groups, labor unions, volunteer organizations, non-profits and governments.

Using the theory of the firm is seen as a lens to see business strategies based on existing resources There have been beginnings of some research on recognizing the role of technology as an affirmation of the boundaries of the enterprise, the creation of operations, and the management of support Typically, Coase (1937) argued that the core technology of the early phones helped shape the firm boundaries of business. Chandler (1962) also noted that the consolidation of technology-based industries would benefit the industries However, the above statements are still unclear as to how digital engineering dominates the company's strategy as well as its economic, social and behavioral background.

It has been determined by observers that the effects of digitization extend beyond communications and are present everywhere, facilitating routine interactions and reducing the occurrence of stress collisions that enable customization across Internet networks (Ivanov, 2012) The proliferation of social networks, which were facilitated by the emergence of digital technology, gave rise to the online business sector. Furthermore, this phenomenon incites the ongoing expansion of mobile devices, prompting numerous conjectures regarding the potential for profound transformations in corporate boundaries and hierarchies (Foss, 2005) Business market positioning is influenced by the emergence of multi-stakeholder ecosystems in value networks, the allure of multilateral business models, and the growing significance of data and analytics As stated by Menz et al (2021), in the era of digitalization, an organization must prioritize three matters: (i) Advantage of corporate; (ii) the extent, boundaries, and scope of the organization; and (iii) the configuration and internal organization of the company.

2.1.2 The Behavioral Theory of the Firm

With arguments on administrative behavior of Simon (1947) and organizations (March & Simon, 1958), Cyert & March (1963) developed the behavioral theory of the firm This development is built on previous publications but explores new organizational frontiers According to Cyert & March (1963), the core research commitment of the behavioral theory of the business is to anticipate the pricing, output, and resource allocation decisions of the firm with "an explicit emphasis on the actual process of organizational decision-making."

Simon (1957) criticized the conventional microeconomics theory that an organization's objective is essentially the same as an entrepreneur's desire to maximize profits Instead, he suggested that organizations should be seen as groups of people who have various aims and work within a set of hierarchical power structures The simultaneous limitation of management behavior's capacity happens, it can cause unsuccessfully Similar to Cyert & March (1963), who used organizational goals, expectations, choice, and control to frame the characteristics of the empirical business, they established a positive theory to explain internal organizational behavior as well as the behavior of oligopolistic markets The decision-making process is adaptively rational, with numerous objectives and ongoing organizational learning, when it comes to deciding on prices, outputs, and resource allocation.

The behavioral theory of the firm has proven to be highly influential in shaping the understanding of organizations and their decision-making processes By examining the fundamental concepts that underlie this theory One key concept of the behavioral theory is bounded rationality, which recognizes that individuals within organizations have limited cognitive abilities and information processing capabilities This understanding helps organizations appreciate why they often make decisions that may not seem optimal from a purely rational standpoint (Argote & Greve, 2007).

Accordingly, Argote & Greve (2007) emphasized the significant impact of early Carnegie school notions on organizational behavior research The behavioral theory of the firm comprises several hypotheses and theoretical mechanisms through which additional hypotheses are generated This thesis is supported by the opportunity to implement the firm's behavioral theory to state the hypothesis regarding the behavior of SMEs, in which digital marketing, technological innovation, and digital orientation are considered While subsequent research has not given them commensurate emphasis, there are certain research traditions that build directly upon the behavioral theory of the firm.

Within the framework of the behavior theory of the firm, the concept of organizational learning is frequently regarded as a cohesive notion that stimulates contemplation regarding the adaptive outcomes of processes formulated in theory and substantiated by practical investigation According to Cyert & March (1963), organizations can be described as "complex systems." They contend that their formal model aligns with this characterization due to its composition of interdependent decision-making rules that are responsive to both external feedback and internal reinforcements, such as the establishment of sales expectations The behavioral theory of the firm posits that an adaptive element of organizational function is the interconnectedness of its components, which contributes to the overall stability of the enterprise The behavioral theory of the firm provides a valuable framework for understanding organizational behavior and decision-making processes Its fundamental concepts shed light on why firms may deviate from traditional economic assumptions and offer alternative perspectives on how organizations operate in practice.

By emphasizing the importance of human behavior, this theory recognizes that firms are not static entities, but rather dynamic systems driven by the decisions and actions of their members It highlights that factors such as individual motivations, cognitive biases, social dynamics, and organizational culture play a crucial role in shaping firm behavior This perspective has led to valuable insights into various aspects of firms, including decision-making processes, organizational structure, performance management systems, innovation strategies, and more By considering human behavior as a key driver of change within firms, the behavioral theory provides a comprehensive framework for understanding and predicting how organizations evolve over time Cyert

& March (1963) have a remarkable explanation that simulated models of price and quantity decision making are constructed and adjusted based on actual decisions on the scene This proves the effectiveness of the theory as a good basis for synthesis and prediction The later simulations used a slightly different strategy, as they focused on a narrower set of theoretical mechanisms and explored their impact on organizational behavior and adaptive consequences This led to a series of organizational decisions (Cohen, et al., 1972) and searches (Levinthal & March, 1981) These arguments about the meaning of theoretical mechanisms set models for further work using simulations in organizational theory with a strong tradition in enterprise behavior theory.

The behavioral theory of the business has been slow in adopting regression models due to its emphasis on organizational decision-making and changes in events that do not align with the traditional strategy of employing continuously dependent variables and datasets to explain performance The regression approaches have made significant contributions to the examination of the influence of learning curves on costs (Argote & Greve, 2007) The utilization of regression analysis has witnessed significant growth in various fields as the availability of historical-event approaches for discrete and continuous time analysis has expanded Performance feedback studies have been conducted to examine the impact of changing events on a particular sort of effectiveness function (Greve, 2011).

The behavioral theory of the business has demonstrated remarkable effectiveness in terms of its impact on the advancement of organizational theory and strategic management Despite its ability to establish a robust basis for the conventional neoclassical framework in economics, the notion is widely contested among economists (Cyert & March, 1963) The field of cognitive science encompasses a wide range of research issues, including cognition, habits, talents, attention, strength, and adaptability. These topics are generally studied within the context of a broader framework, which may involve integration with other relevant techniques.

2.1.3 Theory of Resources-Based Views (RBV)

Resource-Based View is a business theory, it confirms firm’s achievement not missing resources The firm needs to acquire and protect resources This theory became known and developed by Barney (1991) and Wernerfelt (1984) The evaluation of resources within the firm cannot be done in isolation, even if the RBV uses the firm as a unit of analysis This situation exists because, in the end, market forces determine how much these resources are worth in the final product (Barney, 1991) An organization can improve its efficacy and productivity by realizing its full potential and making use of all assets, capabilities, organizational processes, firm attributes, information, and knowledge Managers can be better positioned to be more strategic in meeting the demands of specified market segments by recognizing these resources and competencies.

Main concepts

Through social networking networks, the advancement of digital technology allows individuals, individuals, and businesses to meet and exchange information more regularly Typically, the early growth of Web.20 altered human behavior toward information technology in terms of obtaining information, communicating, and experiencing products and services (Chong & Pervan, 2007) Furthermore, the Internet of Things has transformed how people engage with their physical surroundings.

According to Quinton et al (2018), SMEs will be more interested in digital technology because it will help them collect information, increase competitive advantages, and save costs for marketing tactics However, SMEs may experience challenges adapting to change due to technical limits and a lack of individuals who are knowledgeable about digital marketing One of factors influencing technology adaptation is senior management In the context of small and medium-sized businesses, senior management is often understood by the firm owners, the team, and the behavior that will set off other organized people.

Digital marketing is a novel and captivating notion that has garnered considerable attention among organizations in contemporary times This phenomenon revolutionizes the manner in which customers and businesses engage in communication, exchange information, and engage in commercial transactions (Yaseen et al., 2019) The field of digital marketing has received significant interest from marketers This is mostly due to its ability to promote interactions between firms and customers, as well as foster relationships among customers themselves As a result, digital marketing plays a crucial role in establishing and maintaining emotional and psychological connections between customers and organizations (Thaha et al., 2021).

According to Masrianto et al (2022) Digital marketing is a marketing strategy that employs digital media to effectively engage consumers in a timely, personalized, and contextually relevant manner Digital marketing is commonly known by alternative terms such as "online marketing," "internet marketing," or "web marketing." The phrase

"digital marketing" has gained widespread usage, particularly after 2013, coinciding with the increasing adoption of communication and information technology.

Any digital technology used by an organization to market and to promote products or services, it is referred as a digital marketing, such as website, social media, mobile devices, research engine (Kannan & Li, 2017) Accordingly, the domain of digital marketing comprises a diverse range of online strategies and approaches employed to advertise and endorse products, services, and brands to an audience in the digital realm. The subject in consideration has garnered considerable attention in recent decades, coinciding with the increasing integration of the internet and technology into our everyday routines Digital marketing is understood as a tool that uses marketing on digital devices or the internet According to Nuseir & Aljumah (2020), digital marketing is dynamic and possesses the qualities necessary for the creation and application of successful marketing strategies The function of digital marketing as e- marketing makes a form of advertising that primarily uses the internet to reach a target audience Digital marketing provides businesses with the ability to reach a global audience, track their marketing efforts' effectiveness in real-time, and adjust strategies accordingly As technology evolves, new trends and techniques continue to emerge, shaping the landscape of digital marketing According to Umar et al (2020), SME performance is impossible to be missed modern marketing strategy, in which digital marketing is a case.

It is more leveraged by companies once its digital resources are available For smaller enterprises, digital marketing is a cost –cutting solution Search engines, social media, email, web link are the basic channels for firms to find chances to reach current and potential customers This is also considered online marketing, web marketing, internet marketing.

Because SMEs have an important role to contribute to economic transformation and progress in a country, the digital marketing consideration of SMEs will undoubtedly have a favorable impact on economic growth in a country (Daud et al.,2022) According to Khin & Ho (2019), a company's dedication to supporting product and service innovation through the use of digital technology is known as "digital

Accordingly, the idea of digital orientation is focused on the company's technological capabilities and digital adoption to utilize certainty of service and product creation.

In the growing global trend, enterprises do not hesitate to invest in digital transformation to have an internal information technology system Its innovation seems to be more purposeful toward digital technology According to Quinton et al (2018), digital orientation has three main domains, e.g market orientation, entrepreneurial orientation and learning orientation These three components have mutual characteristics to support the company’s business improvement and jointly create advantages of positioning Accordingly, digital marketing is a purposeful strategic positioning for SMEs to capitalize on the opportunities derived by digital technology. This positioning includes the attitude and behavior of supporting the creation and the usage of market insights to address active innovation SMEs can excel in digitized organizational environments and intelligence-gathering technologies, reducing the cost of expanding their audience.

Firms agree that digital media have had a significant impact on how a marketer currently approaches a consumer (Smith, 2011) Digital media is the term used to describe electronic forms of media that transmit information in digital formats This encompasses all forms of media that can be accessed through computers, mobile devices such as smartphones, and other digital devices such as digital billboards Digital marketing is frequently done on the internet Digital advertising is a type of marketing that uses the internet specifically to spread marketing messages Due to the high level of connection, digital marketing makes it possible to communicate with a large number of people at once It is typically used to market goods and services in a timely, pertinent, more individualized, and economical way (Taiminen & Karjaluoto, 2015). Digital media is heavily used in marketing activities, from promotions or product offers through product sales.

The internet is the advertising medium with the quickest rate of growth Hundreds of millions of dollars are spent by advertisers each year to post their advertising on popular websites (Taiminen & Karjaluoto, 2015) People are more likely to make an online purchase after reading an online advertisement, according to studies Internet advertising banners can create an even playing field for big and small businesses (Smith, 2011) The internet allows users to select the material they want to view The consumer is drawing from a wealth of freely available information Before making any purchases, consumers may now quickly access product information and even engage in discussion Customers now have access to a broad audience through platforms like social networks and blogs with whom they may express their opinions and product reviews (Kaynak et al (2005) Customers can have a significant impact on the positioning and sale of products through these channels There is a growing tendency among consumers to place greater trust in consumer opinions as opposed to data generated by businesses Digitization refers to the process of converting value-creating businesses into a digital format (Nasiri et al (2022) Digital technology has an impact on society Some studies show that, once firm implements digitalization, it creates spillovers to organizational innovation, marketing innovation and market-based innovation (Kuusisto, 2017) Digital orientation indicates a firm’s commitment to implementing digital technology realize product innovation, service innovation and solution (Khin & Ho, 2019) According to Gatignon & Xuereb (1997), the concept of digital orientation is based on the idea of technological orientation of enterprises. Indeed, a digitally oriented company is capable and will be aware of new digital technologies take advantage of this in product development, innovation, and marketing strategy (Khin and Ho, 2019) Once digital technology is applied to a business, it will contribute to exploiting digital marketing, helping to analyze market information more effectively According to previous studies, different areas of digitalization will shape digital marketing capabilities, such as developing online advertising programs, selling online (Mathews et al., 2016) and adapting e-sales (Kaynak et al., 2005).

Digital marketing is considered as a tool, describing the use of technology in marketing efforts, and practices of business by marketing products, services,information, ideas via the internet, mobile phone, display advertising and other electronic media (Pradhan et al., 2013) Digital marketing also facilitates access and communication with many people, based on which take advantage of opportunities to promote products or services in a time way, in which appropriate and cost-effective manner are enclosed It can be said that the market for digital marketing is borderless, because marketing information can reach further markets and has no time limit Digital marketing is supported by many different channels, such as website channels, search engine marketing, search engine optimization, social media marketing, email marketing, content publishing, digital advertising, mobile marketing action, viral marketing, digital media, affiliate marketing, online public relations (Bala & Verma, 2018).

According to Umar et al (2020), the level of business competitiveness rises, the conversion of offline to internet marketing generates a criterion for corporate success.

A business might flourish thanks to the presence of online commerce, where the marketing target grows Sultoni et al (2022) confirmed that digital marketing is an advantage for SMEs to improve its performance The utilization of the internet allows the public to access and compare information provided by business entities of companies This is a chance for firm to enable digital marketing to facilitate transactions on a global scale, without any time constraints (Kotler & Keller, 2006).

To have a successful digital marketing approach, enterprises must have a good infrastructure of digital system Also, managers of SMEs must learn how to employ these marketing strategies to grow their businesses Once SMEs effectively approach the adoption of digital marketing, its performance can obtain Depending on the level of SMEs that can execute them, there are many different digital marketing concepts. These range from assessing the use of applications like social media or more sophisticated technology like websites and e-commerce to using digital marketing in the marketing process (Umar et al., 2020).

Social media and digital marketing give small businesses the chance to expand their consumer base and communicate with current clients more effectively (Martens et al (2016) According to Shideler & Badasyan (2012), even as the foundational element of digitization, broadband access can provide significant opportunities for SMEs, including the ability to reach new target markets and boost productivity and efficiency as well as growth and competitiveness Furthermore, SMEs can save money by using the internet (Chong & Pervan, 2007), because once online channels are invested, SMEs can get facilitation of internal and external communication (Eriksson et al., 2008) To investigate impacts of social web, Barnes et al (2012) conducted the survey on 12 SMEs in UK and argued that social web is proven to increase efficiency and external communication.

Digital marketing ability refers to a company's capacity to develop, implement, and manage digital marketing This refers to the enterprise’s capacity to use the Internet and other information technology to facilitate client connections Customers gain access to the company's resources and information through these interactions, while the company learns more about its customers Digital marketing capabilities are the processes, structures, and talents that a company requires to succeed in the digital age.

Hypothesis statements

2.3.1 Main effects a How does digital marketing impact SME performance?

Digital marketing is geared towards the success of goals, including increasing customer interaction with the company and raising the consumer’s awareness, growing sales, reducing sales promotion and distribution costs, and improving store customer data Saura et al (2020) have a study to explore how firms can leverage digital marketing technology to enhance firm performance The findings provide valuable guidance for firms and decision makers looking to optimize their digital marketing efforts and drive tangible results In addition, Saura et al also argued that with various techniques of digital marketing, employing digital marketing to meet stable development of the company is not easy, particularly for SMEs in the emerging market.

Regular activities now include a lot of digitization and its transformation concerned by SMEs in emerging countries, e.g Vietnam It is reshaping the conventional methods of communication between customers and enterprises. According to Kaplan & Haenlein (2010), digitization, particularly social media, is changing consumer behavior, with significant ramifications for businesses, goods, and brands While Kaplan (2015) argues that consumers are using social media and spending more time online With various linked devices like smart phones, tablets, and laptops, they use online services for browsing, saving, and playing music, e-mailing, and accessing Facebook, Twitter, and apps, which is changing how people use the internet.

As argued by Sultoni et al (2022), digital marketing is a trigger to increase customer interaction with businesses, higher sales revenue, distribution and promotion costs, greater brand awareness, better customer databases, stronger customer relationship management, and improved supply chain capabilities Several factors, such as rising sales volume, promotions, advertising, product quality, price, and others, can be used to gauge firm performance These factors are indispensable for the presence of digital marketing in the current stage of digital technology While Khin & Ho (2019) confirmed an important role of digital technology and digital capability on organizational performance, Djakasaputra et al (2021) and Taiminen & Karjaluoto (2015) show evidence of a significantly positive relationship between digital marketing and firm performance Based on arguments above, the hypothesis is concerned as below

H1: Digital marketing positively influences firm performance. b How does technological innovation impact SME performance?

As mentioned in the previous section, technological innovation in an enterprise refers the realization of ideas for the development of new product or new services or the introduction of new elements in the production process and service operation (Evan, 1984) It is not ease to challenge a relationship between technological innovation and firm performance Alraja et al (2022) took an approach on researching how technological innovation affects stable development of firm But his study just stops answering the stage of development to innovate business to meet firm performance. While Azar & Ciabuschi (2017) had a study on 218 Swedish export venture and found that once international firms pay more attention to technological innovation, export performance of firms are increased Because of fierce competition, firms do not want to be late for new strategies toward market competition, their adoption to innovate products and services are seriously considered While Thornhill (2006) found a significant effect of innovation on revenue growth through a study of 845 Canadian manufacturing firms.

Although if there is a correlation between a dynamic industry and a higher rate of innovation, businesses that are inventive are more likely to see revenue growth regardless matter the sector in which they compete The findings of Thornhill (2006) also indicate that the expertise of the company, the dynamism of the industry, and innovation influences firm performance The dynamism of the industry forces companies to be agile and adaptable, while innovation empowers them to stay ahead of the curve and create unique value propositions Failing to embrace these elements can lead to decreased corporate performance and eventually impact the company's long- term sustainability in the market Conversely, companies that effectively navigate industry changes and drive innovation are more likely to thrive and achieve better performance outcomes Another study on SME’s innovation of Rosenbusch et al.

(2011) also confirmed a significant relationship between innovation and firm performance.

According to Sulistyo & Siyamtinah (2016), there is a hypothesis that innovation capabilities significantly increase performance and competitive advantage Innovation and quality product development can be encouraged to develop only when the organization enhances the good innovation capabilities The result also contributes to the improvement from corporate innovation capabilities to the spirit of entrepreneurship, marketing capabilities, the ability of relational capital, and the empowerment of employees in the organization The higher the organization can increase in the innovation capabilities, the greater the company can improve business performance Thus, companies who can generate finance and marketing performance will ultimately create a competitive advantage Business owners of SMEs should pay attention to establishing a higher entrepreneurial spirit, optimizing the market analysis ability, widening the various stakeholder's network, and providing more opportunities to employees to perform themselves in decision making authority to be able to create more innovation capabilities as a result of competitive advantage achievement.

To found evidence of a significant relationship between innovation and firm performance, Ezzi & Jarboui (2016) conducted the survey of 96 Tunisian companies and confirmed an impact of innovation on firm performance through the quantitative model of factor analysis However, in which firm performance is measured by financial, social, and environmental performance ROE is included in financial performance. Based on arguments above, the hypothesis is stated as below

H2: Technological innovation positively influences firm performance. c How does digital orientation impact SME performance?

The digital landscape has become an integral part of the business world, and its impact on small and medium-sized enterprises (SMEs) cannot be overlooked The adoption of digital orientation has the potential to significantly influence the performance of these businesses Accordingly, Sultoni et al (2022) find digital orientation make its significant contribution to achievements of business strategies, in which digital marketing strategy is taken into account.

With the inheritance from Nambisan et al (2019), Kindermann et al (2021) conceptualized digital orientation with four dimensions, e.g digital technology scope, digital capabilities, digital ecosystem coordination, and digital architecture configuration These four factors have common points relevant to the adoption of digital technology resources in firms Strategic decision making on digital technology is understood presents as digital orientation Once the investment of digital orientation is good, it causes a positive contribution to firm performance (Kindermann et al., 2021).

As defined by Bendig et al (2023), digital orientation is the adoption of big data analytics, 3D printing, modeling technique, Internet of Things, system integration, advanced robotics, etc in the organization Based on the sample of 2,800 firm observation, Bendig et al (2023) found a significant relationship between digital orientation and environmental performance, in which digital orientation calculated through unifying four dimensions of digital technology scope, digital capabilities, digital ecosystem coordination, and digital architecture configuration.

Based on arguments above, we can see that when firms embrace digital technologies, they gain access to a wider customer base, allowing them to expand their reach beyond traditional boundaries This increased visibility can lead to higher sales and revenue, ultimately improving SME performance (Quinton et al., 2018; Kindermann et al., 2021) This means digital orientation enables SMEs to streamline their operations and improve efficiency By leveraging technology for tasks such as customer relationship management (CRM), customer relationship management, and marketing automation, businesses can reduce costs and enhance productivity.

As arguments mentioned previously, the hypothesis about the impact of digital orientation on SME performance is well-founded as below.

H3: Digital orientation positively influences firm performance. d Interaction between digital marketing and technological innovation

We can imagine that SMEs will have troubles once they don’t know well market situation, in which competitors and consumers are taken into account (Pradhan et al.,2013) Digital marketing encompasses the strategic promotion and dissemination of goods, services, information, and ideas through various electronic platforms such as the internet, mobile phones, display advertising, and other digital mediums Digital marketing has been a subject of interest for many esteemed authors, yet consensus regarding its optimal applications remains elusive This is also a reason this study will take further investigation into the matter.

According to Rosário & Cruz (2019), to stay ahead of other companies as competitors, firms need to continually innovate their digital infrastructure and their technologies The fundamental concept underlying marketing is the creation of persuasive messages that are capable of luring in the target audience In recent times, the exponential growth of digital technology has exerted significant pressure on businesses, particularly SMEs Hence, SMEs are consistently engaged in the process of innovation to effectively engage with the digital technology ecosystem Enterprises must be concerned with innovation as they become aware of the shortening of product life cycles The study of Noyola-Medina et al (2018) on Mexican small enterprises has found that enterprises have rapidly changed their integration with digital media to connect with consumers This shows that digital marketing of SMEs has not stopped trying, but before that, enterprises have to go through the stage of converting traditional marketing strategies into digital marketing According to Khin & Ho (2019), when a firm effectively manages its digital system for both daily operations and long-term strategies, it can potentially centralize its database to predict client behavior, so improving its competitive advantage It may be argued that while research on the adoption of digital technology by SMEs in industrialized nations is quite common, it remains relatively scarce in emerging economies such as Vietnam.

As argued by Rothkegel et al (2006), The interaction between digital marketing and technological innovation is profound and continuously evolving Technological advancements have revolutionized the way businesses look at marketing strategies This is a significant motivation for businesses to move towards digital marketing, which happens after the company's technological innovation is consolidated Mandal &Banerjee (2017) demonstrate a positive correlation between social expenditure and digital marketing expenditure, indicating that such investments can lead to improvements in firm In addition, the interaction between digital marketing and technological innovation is a continuous cycle of improvement As technology advances, digital marketers find new ways to leverage it for better targeting, engagement, and results In turn, the insights and data generated through digital marketing help shape future technological innovations to further enhance marketing strategies and customer experiences (Bhattacharya & Sen, 2003) Based on arguments, the hypothesis is taken into account of as below

H4: Technological innovation strengthens the relationship between digital marketing and firm performance. e Interaction between digital marketing and digital orientation

In the study of Sultoni et al (2022), the findings highlight the benefits of embracing digital orientation, such as increased brand visibility, wider audience reach, and improved customer engagement By understanding and implementing these strategies, businesses can stay competitive in an increasingly digital-driven marketplace Another study of Quinton et al (2018) also have arguments which digital orientation as antecedent one improving SME performance These researchers have made significant contributions to the understanding of how digital orientation influences digital marketing strategies Their studies shed light on the importance of aligning a company's digital capabilities with its marketing efforts in order to achieve optimal results.

RESEARCH METHODOLOGY

Introduction

In recent years, digital technology has undergone significant advancements, enabling businesses to gain market segments that were previously inaccessible Prior research has indicated that digital technology has contributed to the formation of digital business channels (Hirvonen & Majuri, 2020) Specifically, it has altered conventional business perspectives, particularly regarding enterprises The development of digital technology has facilitated the unquestionable benefits of digital marketing, including the ability to reach consumers online In fact, it appears that people are inextricably linked to technology; each minute, hour, and day, they access and seek information through directly connected technological applications The immediacy of access to materials and the increase in internet usage by consumers are a good opportunity for firms to approach their potential clients.

It is imperative to acknowledge that leveraging digital media is crucial for individuals as well as organizations seeking to promote their brand In order to maintain competitiveness within the market, it is important for SMEs to undertake this powerful tool for growth and success Nevertheless, a considerable number of SMEs appear to underutilize the complete capabilities offered by digital tools, as highlighted by Gilmore et al (2004) Indeed, the realm of SME marketing differs significantly from that of large firms, as the process of digitization poses greater difficulties for SMEs According to Reijonen (2010), it is contended that traditional marketing theories are not applicable to SMEs Furthermore, it should be noted that the marketing strategies employed by SMEs do not follow a circular pattern when performed in a context-specific and impromptu manner (Gilmore et al., 2004).

According to Reijonen (2010), SMEs are often characterized by their limited resources, which can present unique obstacles when it comes to marketing, finance,operations, and overall business management However, they also possess distinct advantages such as flexibility, agility, and close customer relationships Taiminen &

Karjaluoto (2015) say that the marketing operations of SMEs are often characterized by a lack of organization and a lack of planning in their implementation While Hill (2001) argues that the adoption of formal marketing planning by SMEs may see an upsurge due to the younger generation of business owners with a good level of education. However, using digital marketing of SMEs is not well-adapted (Nuseir & Aljumah, 2020) This is realized as a significant disadvantage for both SMEs and the country’s socio-economy As known, Vietnam is an emerging market and SMEs account for more than 90% in total Most SMEs are seemly facing confusion of digital technology adoption toward business strategies; however, this has not been found in recent studies.

Binh et al (2022) has conducted a study on SMEs in the Mekong Delta, in whichSMEs’ adoption of information technology (IT) systems in administration model are concerned in the quantitative model The work of Binh et al sheds light on the use of information technology tools and systems in areas such as decision-making,communication, data analysis, and process automation Their research also highlights the challenges and considerations that need to be addressed when implementing IT solutions in corporate management This comprehensive approach ensures that their findings are not only relevant but also practical for organizations seeking to leverage technology for better management outcomes.

Previous studies and their approach

The evolution of digital technology drives the growth of relevant research Some authors also suggest that the usage of digital technology represents a significant shift in the manufacturing and commercial processes As argued by Sultoni et al (2022) and Gandarzella et al (2021), digital technology is a significant factor in corporate strategy and efficiency Due to the rapidly advancing digital landscape, employees' digital skills have become more important than ever before Companies are recognizing the need to invest in upskilling their employees to ensure they can effectively navigate and leverage digital tools and platforms From basic computer literacy to more advanced skills such as data analysis, coding, and social media management, employees with strong digital skill sets are invaluable assets to any organization By equipping employees with the right digital skills, businesses can streamline processes, improve productivity, and stay competitive in an increasingly digitized world Moreover, these skills empower individuals to adapt to technological advancements and embrace new opportunities for growth within their careers.

With a study on project managers’ digital skills, Marhraoui (2023) found that employees who are proficient in using digital tools and platforms are more likely to be productive, adaptable, and efficient in their roles Additionally, these skills enable individuals to effectively communicate, collaborate, and problem-solve in a digitally driven work environment As argued by Van Laar et al (2019) , the 21 st century is the century of the digital technology, organization’s recruitments can consider potential employees who are proficiency of skills of digital technology adoption Findings of Marhraoui (2023) and Van Laar et al (2019) partly show positive correlation between level of digital skills in a firm and its overall performance Firms with employees who possess advanced digital skills are better equipped to navigate the complexities of online marketing, data analytics and technology integration This enables them to leverage emerging technologies effectively and make informed decisions that drive business success With arguments as mentioned, we can see that digital skills cause a significant contribution to moderating firm performance through digital marketing use of firm This is employed as the hypothesis that employees’ digital skills are a potential influence to stimulate development and crease motivation to improve business performance therefore being considered as a novelty in this thesis.

Studies summarized in table 3.1 are representative research to present changes in firm performance and competitive competency once they are influenced by digital marketing, technological innovation, digital orientation, and digital skills of employees. The utilization of digital technology not only serves the digital marketing strategy (Thaha e tal, 2021) but also assists SMEs in improving the effectiveness of their technical innovation While Astuti et al (2020) consider an impact of digital technology on firm performance, their research delves into how digital technology can enhance various aspects of a firm's operations and ultimately contribute to its overall performance Their findings highlight the positive influence that digital tools and platforms have on key performance indicators such as revenue growth, cost reduction, customer satisfaction, and market competitiveness As a result, digital technology is not only a good tools for large firms, but also an indispensable one for SMEs Garzella et al (2021) have a confirmation through their study of verifying the significance of boundary size and capabilities in the development and execution of innovative business models within the context of small and medium-sized Also Radicic & Petković (2023) discovered that the usage of digital technology had a beneficial effect on innovation results in micro enterprises, small firms, and medium firms This finding is based on the quantitative methodologies, in which the bivariate probit models are taken into account.

Although the resources available of digital technology are quite important, knowing how to use this is more important, in which digital skills of employee is the most important In the study of Van Laar et al (2019), they discovered that employees with strong digital skills help firms to use a full of advantage of digital technology resources amiable to main customers and compete against competitor.

Author Name of journal with ranking

Digital skills and digital technology adoption

International Journal of Entrepreneurs hip

The survey based on random sampling conducted on of 298 SMEs in Indonesia

Organizational readiness toward innovation; Firm characteristics; Strategic orientation; Persuasion of innovation; Digital technology for innovation adoption

Digital technology causes innovation adoption impacting on SME performance

The survey was conducted on 250 SMEs.

Technological management; Cultural management; Relational management; Boundary size

The study verifies the significance of boundary size and capabilities in the development and execution of innovative business models within the context

Author Name of journal with ranking

Independent variable Finding of small and medium-sized enterprises (SMEs) and boundary management.

Data based on the wave conducted in 2016, which the sample of study is 2,854 SMEs Germany firms The binary probit model is employed Firm types:

Digital connection, digital value chain, and big data analytics;

Productivity, exports, graduate, firm size, and industry.

The moderating of internalR&D for digitalization and technological innovation is confirmed

Author Name of journal with ranking

Online survey conducted in 2017 on 1,222 respondents, who are engineers, designers, and project managers Hypotheses are tested by the quantitative method of confirmatory principal component analysis and regression

These skills enable easy digital navigation, technology adaptation, and online communication and collaboration

Author Name of journal with ranking

Sustainability The survey conducted on 533 SMEs in Ghana (158 SMEs owners,

Hypotheses are tested through Structure Equation Modelling

Attitude toward digital marketing, perceived behavioral control, subjective norm;

Mediators: Behavioral intention to use digital marketing, actual behavioral use of digital marketing

The findings show that perceived behavior control and subjective norms affected digital marketing intentions, but attitudes did not Finally, the association between digital marketing use and SMEs' sustainable growth shows that digital marketing greatly increased SMEs' sustainable growth in developing nations.

Author Name of journal with ranking

The survey conducted on 167 firms in 29 countries, who are internal firms of overseas Chinese.

Structural Equation Modeling is applied

Control variables: firm age, country, industry, % revenue abroad, family firm, number of markets, Munificence, Dynamism, Heterogeneity;

Main effects: Digital marketing capacities, Firm Size

Digital marketing capabilities (DMC) and market orientation impacting on firm performance

International Journal of Data and Network Science

Structural Equation Modelling applied on

Digital marketing, Digital orientation, Marketing capability, information technology capability

Digital marketing boosts SME marketing performance significantly Digital orientation affects SMEs' marketing performance Marketing capabilities and IT

Author Name of journal with ranking

Independent variable Finding capabilities positively and significantly affect SMEs' marketing performance.

The survey on 1968 SMEs across 13 Caribbean SIDS during 2020-2021 The quantitative method is used by Tobit model

Goods innovation, Service innovation, process innovation, organizational innovation, social media, digital technologies for collaboration, firm size, firm age, export intensity, top management experience, foreign

Although many types of innovation are concerned, innovation of goods and process are significant enhancement for sales growth, while innovation of services and organization are not matter for sales growth

Author Name of journal with ranking

Daud et al International The survey is Finance Independent variables: The findings demonstrate (2022) Journal of conducted on 180 performance of Digital finance, digital that digital marketing,

Data and SMEs Testing Indonesian marketing, digital digital finance, and digital Network hypotheses is based on SMEs, measured payment payment indicators all have

Science the quantitative model in Likert scale a statistically significant of Structural Equation impact on financial

Modeling performance The findings also confirm that as Micro SME actors pay attention to digitalization, their benefits improve.

Wu et al Technological Panel data under China Firm Main effects: Innovation, The results, based on a (2022) Forecasting & National Intellectual performance State owned enterprise, broad sample of Chinese

Social Property measured in business group affiliation, enterprises, confirmed Change Administration during export subsidy, financial slack; technological innovation

1998-2007, which the performance, in with the presence of patents

Author Name of journal with ranking

Independent variable Finding probit regression is employed on 219,599 firms with the total sample of 418,300 observations which export propensity, export intensity and export intensity in terms of sales are employed

Recoverable slack, Potential slack, Productivity, Capital intensity, Human capital, Size, Private Owned enterprise to influence exports

However, this progress is hampered by a barrier in government institutions.

Based on the survey conducted on 573 Swedish export firms

The statistical model of SEM is employed

Control variables: Firm size, R&D expenditure, extent of development

Technological innovation and organizational innovation have a significant impact on export performance, in which the presence of organizational innovation plays a significant role in

Author Name of journal with ranking

Independent variable Finding influencing the occurrence of technological innovation.

Innovation surveys conducted by Statistics Finland in 1996 and

2000 The statistical model based on probit models

Product innovation, process innovation, market innovation

Firm size, sales revenue, R&D expenditure, Cooperation, acquisition of labor, population density

Small firms have been found to be more conducive to fostering innovation compared to their larger counterparts R&D collaboration and labor acquisition make substantial contributions to the advancement of innovation.

The survey conducted on 264 SMEs in Finland Logistic

Nine independent variables: Internal, Network, Regional knowledge organization,

New products and market innovations seem to be linked to free information sources Results show that

Author Name of journal with ranking

Innovation Management regression model is applied

Regional support organizations, Financial organizations for innovation, National support organizations, external information sources, Firm’s growth, firm’s profitability new products, process, and market innovations favorably impact business growth None of the forms of innovation investigated increased corporate profitability.

Database selected from 6,498 shareholder letters of 634 firms listed in during 2001-

2016 Testing the relationship between digital orientation and

Digital orientation based on calculation of four dimensions, such as Digital technology scope;

There is a significant relationship between digital orientation (of both current time and previous time).Findings expand strategic orientation literature and unite strategy and

Author Name of journal with ranking

Independent variable Finding firm performance is based on regression model architecture configuration; Control variables: firm age; firm size, industry concentration, and industry sales growth information systems The novel digital orientation concept and validated measurement device provide several study opportunities.

International Journal of Operations and

The sample is 331 large companies in Finland.

Hypotheses tested are based on 15 models of regression

Financial success: Net profit and operating profit

Main effects: Digital orientation, Digital intensity; Mediation effect: Digital maturity;

Control variables: firm size, revenue change, industry, and ownership

A significant relationship between digital orientation and financial success is verified In addition, the interaction of digital orientation and digital intensity

The sample of 515 firms listed during 2009-2019 is

Environmental performance defined as the

Main effect: Digital orientation consists of four dimensions, such as

The hypothesis of “digital orientation is positively related to an organization’s

Author Name of journal with ranking

Independent variable Finding and Social

Change employed Equivalent to 2,800 firm observations Hypotheses testing are based on logistic regression models dependent variable, its measure is “0 negative” and

Digital ecosystem coordination; Digital architecture configuration.

Control variables: Firm size, firm age, firm profitability, financial leverage, capex, industry concentration environmental performance” is accepted This means once a good use of digital technology scope, digital capabilities, digital ecosystem coordination, and digital architecture configuration, environment performance of organization is more effective

Research model

The authors of earlier studies have indicated that there is less research on the association between digital marketing and its effectiveness for SMEs in emerging economies (Pingali et al., 2023; Sultoni et al., 2022) Numerous authors have made references to the examination of the relationship between digital marketing and firm performance, technological innovation and firm performance, and digital orientation and firm performance Nevertheless, there has been limited exploration of the impact of digital marketing on the performance of enterprises in the emerging market based on their enterprise size Furthermore, scholarly literature has not extensively explored the interplay between digital marketing and technological innovation, digital marketing and digital orientation, and technological innovation and digital orientation.

Based on arguments, the proposed research model is generally drawn in figure 3.1, its development is based on reviews on previous studies Hypotheses in the model will be tested through the quantitative models, e.g multiple regression model Notably, testing models is based on sub-models, it means the model will employ demographic information, such as age and education of managers, size of enterprises (e.g labor), type of sector (microenterprises, private enterprises).

The research model with independent variables in figure 3.1 is divided into groups points: (i) group of variables as main effect path: digital marketing (DM), technological innovation (TI), and digital orientation (DO); (ii) group of variables as interaction between digital marketing and technological innovation, between digital marketing and

DO, and between technological innovation and DO; (iii) group of variables as control path: age and education of owner/director, firm size (labor).

According to the research model drawn, nine hypotheses concerned as follows.

H1: Digital marketing positively influences firm performance.

H2: Technological innovation positively influences firm performance

H3: Digital orientation positively influences firm performance.

H4: Technological innovation strengthens the relationship between digital marketing and firm performance.

H5: Digital orientation strengthens the relationship between digital marketing and firm performance.

H6: Digital orientation strengthens the relationship between technological innovation and firm performance.

H7: The relationship between digital marketing and firm performance is moderated by employees’ digital skills.

H8: The relationship between technological innovation and firm performance is moderated by employees’ digital skills.

H9: The relationship between digital orientation and firm performance is moderated by employees’ digital skills.

Source: Own proposing compiled on prior studies

H9 (+) H7 (+) SME performance in the emerging market

Sales revenue performance Technological innovation

Age of owner/director Education

To test hypotheses stated in the proposed research model, statistical models are employed Two indicators of sales and productivity performance are employed as dependent variables and are converted to natural logarithm to serve regression estimation General regressions of those two dependents are employed as follows. a Regression with FP_Rev (revenue performance) as the dependent variable i i i i i i i i i i

• DM, TI, DO are main effect variables employed as independent variables.

• DS is employed as moderator.

• a11, a12, a13, a21, a22, a23, a24, a31, a32, a33, a34, a35, a41, a42, a43, a44, a45, a51, a52, a53, a54, a55, a61, a62, a63, a64, a65, a66, a67, a71, a72, a73, a74, a75, a81, a82, a83, a84, a85, a91, a92, a93, a94, a95, a10, a20, a30, a40, a50, a60, a70, a80, a90, a00: Unknown parameters of coefficients in equations of (1.1) (1.9), respectively.

• a10, a20, a30, a40, a50, a60, a70, a80, a90, a00 are constant of equations of (1.1)

• Ci is control variables (Age, Education, Size, Industry) b Regression with FP_Pro (productivity performance) the dependent variable i i i i i i i i i i

• Digital marketing (DM), technological innovation (TI), and digital orientation

(DO) are main effect variables as independent variables.

• DS is employed as moderator.

• b11, b12, b13, b21, b22, b23, b24, b31, b32, b33, b34, b35, b41, b42, b43, b44, b45, b51, b52, b53, b54, b55, b61, b62, b63, b64, b65, b66, b67, b71, b72, b73, b74, b75, b81, b82, b83, b84, b85, b91, b92, b93, b94, b95: Unknown parameters of coefficients in equations of (1.1) (1.9), respectively.

• b10, b20, b30, b40, b50, b60, b70, b80, b90, b00 are constant of equations of (2.1)  (2.9), respectively.

Ci is control variables (Age, Education, Size, Industry)

3.4 Variables employed in the research model

Following up the proposition of research model, the main effects consist of digital marketing, technological marketing, digital orientation, and digital skills of employees. These main effects are recruited through previous studies summarized in Table 3.3 In addition, the employments of firm performance and control variables entered in the research model are also based on previous scholars, who summarized in Table 3.3.

To SME performance, it refers to the evaluation and assessment of how well a firm expect and gains to meet its goals Actually, firm performance encompasses numerous dimensions, including financial, operational, strategic, and competitive aspects, and it is essential for comprehending the business's overall health, efficiency, and effectiveness (Lucia-Palacios et al., 2014) Utilizing a variety of indicators and metrics to evaluate the company's success and potential improvement areas is required for measuring SME performance As demonstrated in the preceding section, there exists a comprehensive array of around 80 distinct measures that can be utilized for the purpose of evaluating firm performance (Griffin & Mahon, 1997).

In this thesis, two potential indicators are candidates selected for the purpose of measuring firm performance The indicator of sales revenue performance is based on Katsikeas et al (2016) and Watson (2007) While productivity performance is drawn through arguments of Morikawa (2010) and Radicic & Petković (2023).

To the growth of labor cost, it is defined as the firm growth (Jones, 2010), because it is used to evaluate the enterprise size The firm will expand its size as well as economic scale, the labor force is improved and increased It means the larger sizeSMEs, the more labor recruited, and the more facilities, this positively influences training programs to the labor force to strengthen its competitive advantages.

One of the study objectives is to analyze the interaction of three components of digital marketing, technological innovation, and digital orientation on SME performance in the emerging market Measuring the association of digital marketing, technological innovation, and digital orientation influencing on firm performance is popularly used by Structural Modelling Equation (Masa’deh et al., 2018; Nuseir & Aljumah, 2020; Sultoni et al., 2022) All of them do not have approach on investigating interactions among three factors, e.g digital marketing, technological innovation, and digital orientation on SME performance.

Table 3.2: Summary of variables’ measures from previous researches

Components Statistical model Argument and finding Author

Quantitative models such as ordinary least square (OLS)/ regression, binary logistic, probit

Firm performance measured by sales revenue and productivity.

Katsikeas et al (2016); Mohamad (2011); Morikawa (2010); Radicic & Petković (2023); Binh & Tien (2019); Johansson

-Multiple regression models or Ordinary Least Square (OLS) -Structural equation modelling (SEM)

- A positive relationship between digital marketing capabilities and firm performance;

Digital marketing of different firm sizes gives a different orientation.

Saura et al (2020); Wang (2020); Taiminen

Components Statistical model Argument and finding Author

- SMEs have not completely use full potential of digital marketing to derive benefits

-Based on SMEs surveys during 2005-2015, which regression model is employed -Structural equation modelling applied to investigate 218 Swedish export ventures

- SMEs pay attention to innovation and its innovation has a positive contribution to profit margin.

- Higher consideration on technological innovation improves firm performance

Alraja et al (2022); Pham et al (2021); Azar & Ciabuschi (2017); Ezzi & Jarboui (2016)

- The survey conducted on 6,498 shareholders letters from 2001-2016, in which 634 firms are identified.

- Digital orientation consists of dimensions of digital technology scope, digital capacities, digital ecosystem coordination, and digital architecture configuration The study confirms a positive relationship between digital orientation and firm performance

Components Statistical model Argument and finding Author

The study has an approach on literature review of previous scholars relevant to digital technology, innovation and digital skills The study offers components of digital technology, innovation and digital skill of employees.

Digital skills of employees are defined as convergence of skill characteristics of software, cloud computing, big data analytics, and AI Based on literature review, the paper present arguments a relationship between digital technology and innovation, in which the role of employees’ digital skills is a significant contribution to

Negative relationship between age of business executives with performance

Hambrick & Mason (1984); Salthouse (2009); Zhang (2017) Education Quantitative method

Positive relationship between education of business executives and business performance

Firm size -Employee amount -Employee amount as firm

- Employee size contributes to a firm’s profit and digital maturity.

Ganotakis et al (2023); Radicic &Petković (2023);Wang (2020)

Components Statistical model Argument and finding Author size employed regression model

- Firm size impacting on firm performance

Industry Impact of digitalization on technological innovations measured through the bivariate probit model, in which a panel sample of German firms is employed

- Industry is concerned in the quantitative method.

- Industry variable played as a control variable is not found its impact on firm performance

Age: As argued by Zhang (2017), the age of the enterprises executives is related to the capacity for integration and information processing According to findings from studies on aging, there appears to be a deteriorating connection between one's age and their cognitive capacity Memory, the ability to multitask, and the rate at which one can process information all go down with age In particular, elderly executives may lack the physical and mental fortitude required to make organizational changes (Child, 1974) or may struggle more than younger executives to understand new concepts and pick up new behaviors (Hambrick & Mason, 1984) This suggests that older top managers lose the comparative advantage in assimilating and applying current, rapidly evolving technical knowledge as the quality of some cognitive skills and information processing abilities declines more quickly (Salthouse, 2009) This is especially true for the rapidly evolving technology-driven software and IT services sector.

Education: Successful management of the enterprises is impossible if the managerial ties are not involved However, a leader of firm is expected to have higher education to manage the firm effectively (Gao et al., 2008) Accordingly, education plays a crucial role in the dissemination of cutting-edge research Due to universities' concentration on fundamental and basic research initiatives, the manager/director’s insights gained through partnerships with them are more likely to have a substantial, beneficial effect on inventive performance in the long run It has been found that informal ties between corporations and educational institutions increase the likelihood of technical innovation and production.

Firm size: It is measured through employee numbers working in a firm and used as a control variable in the econometric model (Ganotakis et al., 2023; Radicic & Petković, 2023), which Ganotakis et al (2023) employ employee numbers as firm size, and played as a control variable A positive relationship between firm size and sales growth is confirmed While Wang (2020) verifies the role of employee number to moderate digital marketing capabilities and firm performance relationship.

Industry: To measure the impact of SMEs’ digitalization on technological innovations, Radicic & Petković (2023) concern industries, in which 20 sectors are employed in bivariate probit models Baláž et al (2023) employed the variable of industry as the control variable to estimate 170 firms in European countries and do not find a significant relationship between the industry and firm performance Likely, Binh

& Tien (2019) do not found statistically existed impact of sectors on firm performance through the quantitative method of logit model.

Employed variables and their measure

This section is going to describe variables and their measure employed in the research model proposed.

(1) Measure of digital marketing (DM):

As defined by Kanaan et al (2023), digital marketing consists of technique tools to attract customers, which employing social media to facilitate marketing strategies is defined as digital marketing Similarly, Masrianto et al (2022) also state that digital marketing includes activities related to elements, such as digital CRM, commerce, digital analytics, content marketing, digital advertising, online newsletter, mobile marketing and display advertising Additionally, Su et al (2023) also defined digital marketing is the process of employing digital technologies to attract customers, e.g e- commerce platforms and social media to promote firm’s brand toward sales growth.

In the study of Dimitrios et al (2023), these authors stated that digital marketing support firm to directly get personalized communication As a result, automatic transaction system with partners and customers as a tool of Chatbot system is seen as a tool of digital marketing (Abdelkader, 2023) to provide and exchange product and service information with customers

Based on the above arguments, the measure of digital marketing in this study is summarized in Table 3.3 Accordingly, there are four items concerned: (i) Social medial for marketing; (ii) E-commerce to sell products or/and services; (iii) Customer relationship management (CRM); (iv) Automatic transaction system defined as Chatbot

AI to communicate customers Accordingly, these four items come from the question No.8 mentioned in the questionnaire in Appendix 1, Form No 1.10/DN-VĐT.

With four items that belong to digital marketing (Table 3.3) are measured in value (million VND), so the final measure of digital marketing is the total investment value of social media, e-commerce, CRM, and Chatbot AI.

Table 3.3: Items of digital marketing

Social media to serve marketing activities employing social media to facilitate marketing strategies is defined as digital marketing

8 belong the questionnaire in appendix 1, Form

E-Commerce to sale products and services

Defined as a digital marketing tool to promote business

8 belong the questionnaire in appendix 1, Form

CRM as a tool to leverage technology in digital marketing is digital marketing.

The question No.8 in the questionnaire enclosed in appendix 1, Form

Defined as digital marketing helps firms obtain personalized communication This is Chatbot to provide

The question 8 belong the questionnaire in appendix 1, Form

MillionVND and exchange information with clients.

(2) Measure of technological innovation (TI):

As argued by Wang & Chung (2020), the term of technological innovation refers to the creation of something novel Accordingly, technological innovations encompass advancements in technology, design, manufacturing, and management In fact, measuring technological innovation is defined broadly, it includes product innovation, production process innovation (Azar & Ciabuschi, 2017; Wang, 2019), and R&D (Omri, 2020; Moen et al., 2018) This thesis draws the measure of technological innovation on the point of view of Azar & Ciabuschi (2017), Omri (2020), Moen et al. (2018), and Wang (2019) Accordingly, three items of product innovation, production process innovation, and R&D are employed in the research model The measure of three items is ordinal of five-point scale mentioned in the question A5.3 of Form No 1/ DN- TB in Appendix 1, in which 1 being not at all and 5 being extremely using are applied in three items just mentioned.

The final measure of three items belong to the factor of technological innovation is calculated through the method of principal component analysis (PCA) (Hair et al., 2017) Definition and measure of items are summarized in table 3.4.

Table 3.4: Measure of technological innovation

Product Technological Azar & The questionnaire Ordinal: innovation innovation Ciabuschi in appendix 1, Likert scale encompasses (2017), with question of 1 being innovation of A5.3 of “How did not at all to 5 products/services Wang the enterprise being an innovation (2019) make extremely process innovation?” in using

Production Production Azar & The questionnaire Ordinal: process process Ciabuschi in appendix 1, Likert scale innovation innovation is (2017); with question of 1 being seen as Wang A5.3 “How did not at all to 5 technological (2019) the enterprise being innovation make extremely process innovation?” in using

Research and R&D is defined Omri The questionnaire Ordinal: development as innovation (2020); in appendix 1, Likert scale

(R&D) Moen et al with question of 1 being

(2018) A5.3“How did the not at all to 5 enterprise make being innovation?” in extremely Form No 1/DN- using TB

(3) Measure of digital orientation (DO):

Bendig et al (2023) and Kindermann et al (2021) have the same points of digital orientation, which they argue that digital orientation encompasses of dimensions of digital technology scope, digital architecture configuration, digital capabilities.Particularly, Ardito et al (2021) confirm that various areas of digital technology adopted by the company to serve the process of business Accordingly, Ardito et al.(2021) employ digital orientation in the research model based on the number of counting of digital technology systems or platforms related to information systems, resource management, production system, customer management system, and online business Based on this, the digital orientation of this thesis is measured by items of (i) Cloud computing technology; (ii) advanced robotics; (iii) Progressive manufacturing technology (Print 3D), (iv) Augmented reality (AR); (v) Modeling techniques; (vi) Internet of Things; (v) Cybersecurity; (vi) Big data application; (vii) system integration. These seven items are presented in question No.3 belong the questionnaire in Appendix

2 in Form No 2/ĐTDN-CMCN, measured by Liker scale (Table 3.5) The measure of digital orientation is calculated through the method of principal component analysis (PCA) (Hair et al., 2017).

Table 3.5: Measure of digital orientation

Digital orientation Definition Author Source Measure

Based on items: (i) Digital Ardito et al The question is Ordinal: Cloud computing orientation (2021), No.3 in Form Likert scale technology; (ii) encompasses Bendig et al No 2/ĐTDN- of 1 being advanced robotics; variety of (2023), CMCN unlikely to

(iii) Progressive digital Kindermann enclosed in 5 being manufacturing technology et al (2021), Appendix 2 likely technology (Print areas that are Nasiri et al The question of

3D), (iv) adopted in (2022) No.3 is “How

Augmented reality firm does the

Modeling digital techniques; (vi) technology

Internet of Things; (Industry 4.) to

(vi) Big data business?” application; (vii) system integration

Sony & Mekoth (2022) conceptualize employees’ digital skills as knowledge of employee using information technology, e.g internet of things, cloud computing, big data, information security, and application of support systems Similarly, Ciarli et al. (2021) describe the process of digital technology development and show the relationship between digital technology and skill capacity of employees, which these authors define digital skills as the convergence of skill characteristics of big data analytics, cloud computing, critical thinking/generation, and artificial intelligence. While Van Laar et al (2019) state that employees’ digital skills in 21 st century include critical thinking of system, information digital skills, communication digital skills, problem-solving digital skills Shortly, digital skills of employees are measured by employees’ capability using new and advance technologies, such as 3D printing, cloud, automatic technology, data analysis, and artificial intelligence (Marhraoui, 2023). Based on arguments above, the digital skills of employees are used in the thesis consist of information technology adoption skills: (i) Basic information technology; (ii) Automatic technology, (iii) Data analytics; (iv) Cybersecurity; (v) Support system application; (vi) Collaboration software; (vii) System critical thinking and process understanding These items with scales are summarized in Table 3.6 and mentioned in the question no 7 “How does the company rate digital skills of employees?” in Form

No 2/ĐTDN-CMCN enclosed in Appendix 2.

Table 3.6: Measure of employees’ digital skills

Digital skills Definition Author Source Measure

Employees’ digital Digital skills as Sony & The questionnaire in Ordinal: skills as the knowledge of Mekoth appendix 2 The Likert convergence of employee (2022); question is no.7 “How scale of skill characteristics related to Ciarli et al does the company rate 1 being such as: (i) Basic digital (2021); digital skills of unlikely information technology, Marhraoui employees?” in Form to 4 technology; (ii) such as: (2023); No 2/ĐTDN-CMCN being automatic Internet of World Bank with items: (i) Basic likely technology, (iii) Things, cloud (2020) information data analytics; (iv) computing, big technology; (ii)

Cybersecurity; (v) data analytics, Automatic technology, support system information (iii) Data analytics; application; (vi) security, (iv) Cybersecurity; (v) collaboration application of support system software; (vii) support application; (vi)

System critical systems Collaboration thinking and software; (vii) System process critical thinking and understanding process understanding

(5) Variables and measure of SME performance and control variables:

As depicted in table 3.7, two indicators of sales revenue and productivity are employed as firm performance to test hypotheses Their measures are continuous variables In parallel, control variables are entered in the statistic models, which variables of age of owner, gender of owner, education of owner, firm size, and industry are enclosed, their measures also presented in the table.

Table 3.7: Variables and their measures

Variables Question in the questionnaire Measure Author

Sales revenue The questionnaire is Form No Continuous Katsikeas et al. (FP_Rev) 1/DN-TB enclosed in appendix variable measured (2016);

1 The question is asked as in million VND It Watson

“total net revenue from sales is converted to (2007); Binh and services” natural logarithm & Tien (2019)

Variables Question in the questionnaire Measure Author

The questionnaire is Form No

1/DN-TB enclosed in appendix

- Question No A2.2 is “the number of employees.”

- Question No A4.4 is “total net revenue from sales and services”

Productivity is defined as labor productivity; it is the ratio between total sales revenue and the number of employees It is converted to natural logarithm

Owner age The question No A1.6 in the

Form No 1/DN-TB enclosed in Appendix 1

Education The question No A1.6 in the

Form No 1/DN-TB enclosed in Appendix 1

Ordinal variable Gao et al.

Firm size The question No A2.2 in the

Form No 1/DN-TB enclosed in Appendix 1

Ganotakis et al (2023); Radicic & Petković (2023); Wang (2020)

Industry The questionnaire in Appendix

2, with the question main industry based on VSIC – level

5 in Form No 1.10/DN-VĐT

Dummy variable (1 being food processing sector, otherwise being 0)

Enterprises and its size

In the period 2016-2020, the average number of enterprises increased by 7.9% per year (average increase of 8.7% in the period 2011-2016), in which number of employees increased by 1.2%, lower than the growth rate of 5.1% in the period 2011-

2016 At the same time of 2020, the whole country had 15.3 thousand cooperatives with 169.6 thousand employees, it is an increase of 17.5% in the number of cooperatives and a decrease of 15.6% in the number of employees compared to 2016 The number of individual production and business establishments (individual production and business establishments) in 2020 is nearly 5.2 million establishments with 8.5 million employees, there is an increase of 5.7% in the number of units and an increase of 3.0 % of employees compared to 2016.

The average number of employees in units decreased slightly from 4.5 employees in 2016 to 4.3 employees in 2020 Of which, enterprises decreased from 27.2 employees to 21 employees; cooperatives reduced from 15.1 to 11.1 employees; individual production and business establishments decreased slightly from 1.7 to 1.6 employees The industry-construction sector accounted for 18.0% of the total survey units under GSO, while the agriculture, forestry, and fishery sector accounted for 0.2%, with 14.8 thousand units The service sector accounted for nearly 4.9 million units, or 81.8% (compared to 80.8% in 2016).

Regarding the number of employees, the service sector has more than 14.2 million employees, accounting for 53.8%, up 4.9% compared to 2016; the industry - construction sector was 11.4 million people, accounting for 44.8%, increasing by 0.8%; the agriculture, forestry and fishery sector was 349.7 thousand people, accounting for 1.4%, down 0.6%As mentioned, as of December 31, 2020, the whole country has 683.6 thousand enterprises with production and business results and the number of employees is 14.7 million, an increase of 2.3% in number of enterprises and a decrease of 3.1% in the number of employees compared to 2019, this is the lowest increase in the 2016-

2020 period due to the impact of the Covid-19 epidemic The average growth rate of enterprises in the period 2016-2019 is 9.8% per year; the growth rate of labor in the enterprise is 2.6% per year In the period 2016-2020, the average growth rate of enterprises is 7.9%; the labor growth rate in the enterprise is 1.2% per year.

The non-state enterprise sector accounted for 96.5% of the total number of enterprises in the country, a 1.8% increase compared to 2019 and a 35.0% increase compared to that of 2019 In comparison to the year 2016, there was a notable increase in the number of foreign-invested firms, reaching a total of 22,200 These enterprises constituted approximately 3.2% of the overall enterprise count, seeing a growth rate of 18.4% and 58.6% in terms of quantity Conversely, the number of State-owned enterprises witnessed a decline, with roughly 2,000 such enterprises accounting for around 0.3% of the total This decline amounted to a decrease of 5.5% and 25.6% in terms of quantity The observed alterations could potentially be attributed to the implementation of governmental laws pertaining to the corporation equalization policy.

Regarding labor, the State-owned enterprise sector attracted more than 1 million labors, accounting for 6.9% of the total labor force of enterprises, down 8.9% compared to 2019 and down 21.5% compared to 2016; the non-state enterprise sector was 8.6 million labors, accounting for 58.4%, down 5.5% compared to 2019 and down 0.01% compared to 2016; the foreign-invested enterprise sector was 5.1 million labors, accounting for 34.7%, up 2.6% compared to 2019 and up 22.7% compared to 2016In terms of economic sector, the economic structure has shifted in a positive direction, reducing the proportion of enterprises in the agriculture, forestry and fisheries sectors, and increasing the proportion of enterprises in the industry- construction and service industries Service sector enterprises are 465.6 thousand enterprises, accounting for 68.2% of the total number of enterprises, an increase of 3.1% compared to 2019 and an increase of 31.4% compared to 2016; enterprises in the industry-construction sector are 211.5 thousand enterprises, accounting for 30.9%, increasing by 0.9% and increasing by 44.5%; enterprises in the agriculture, forestry and fishery sector were 6.5 thousand,accounting for 0.9%, down 13.6% and up 45.2%Labor in industry - construction enterprises accounted for the highest proportion with the number of employees was 9.3 million people, accounting for 63.4% of the total number of employees in the down 3.1% compared to the total number of employees in the enterprise With 2019 and up 2.3% compared to 2016; the labor force of enterprises in the service sector was 5.1 million people, accounting for 34.9%, down 3.5% and up 9.7%; enterprises in agriculture, forestry and fishery were 253 thousand people, accounting for 1.7%, increasing by 1.5% and increasing by 0.8%.

Non-agricultural, forestry and fishery individual production units

As of 2020, the whole country has nearly 5.2 million individual business establishments with 8.5 million employees, an increase of 5.7% in the number of establishments (an increase of 281.1 thousand establishments) and an increase of 3.0% (increase of 246.4 thousand employees) compared to 2016, this is the lowest increase over the Census periods The Red River Delta is still home to the largest concentration of individual establishments in the country, with 1.3 million establishments, accounting for 25.0%, an increase of 3.4% compared to 2016; North Central and Central Coast ranked second with 1.2 million establishments, accounting for 23.1%, up 6.6%; The Mekong Delta is 1.0 million establishments, accounting for 19.3%, up 1.9%; The Southeast has 943 thousand establishments, accounting for 18.2%, up 10.1%; The Northern Midlands and Mountains were 485.7 thousand establishments, accounting for 9.4%, increasing by 7.8%; The Central Highlands was 260.2 thousand establishments, accounting for 5.0%, up 10.0%In terms of economic sector, the number of individual business establishments in the service sector continues to lead in terms of number and employees with more than 4.3 million establishments and the number of employees is 6.5 million, increasing 8.0% in number of establishments and 6.0% increase in number of employees compared to 2016 The number of individual production and business establishments in the industrial and construction sectors is 863.3 thousand with the number of employees is 2.0 million people, down 4.5% in number of establishments and 5.4% in number of employees compared to 2016.

According to Vietnam GSO’s survey, SMEs now account for about 98.1% of all businesses in Vietnam The number of active SMEs in Vietnam accounted for more than 560,000 enterprises and gained over 100,000 of the annual growth rate enterprises.

However, the contribution to the economy of SMEs is not commensurate because many barriers are affecting their development.

Vietnam is a developing country when the business opportunities are very high as well as the competitions from outside and inside of Vietnam Thus, innovation development is the key factor to help the SMEs develop and seize the competitive advantage in the market Besides, to support for the business of SMEs in Vietnam, the Vietnamese Government issued resolutions No 19/NQ-CP on improving the business environment, improving national competitiveness; Resolution No 35/NQ-CP dated 16/5/2016 and Directive No 26/CT-TTg on support and development DN until 2020; Resolution No 75/NQ-CP on reductions in fees and expenses for enterprises; Resolution No 98/NQ-CP on Government action program implementing Resolution

No 10-NQ/TW on 3/6/2017 of the party on private sector development At the same time, the Government also promoted the implementation of solutions to create a favorable and transparent business environment for all economic components, focused on assisting the development of SMEs To further enhance the legal effect, promote the implementation of SME support policies, at the 3rd session of XIV, Congress adopted SME support Law (Law No 04/2017/QH14) The law is enforceable from 01/01/2018, with a series of basic support policies for SMEs such as access to credit, information, human resource development, consultancy, technology, and so on It has made an important step forward in the work of improving the positive support policy for SMEs to grow stronger.

Based on Decree No 80/2021/ND-CP, issued on August 26, 2021, SMEs are classified by size, including microenterprises, small, and medium enterprises Criteria to be different sizes to classify enterprises is presented in Table 3.8 Popular indicators to measure firm size are based on the number of employees As defined by Radicic &Petković (2023), firm size with employee is smaller than 10 employees as micro firms,firm with employee range > 10 and < 50 employees defined as small sized firms, and firm with the employee rand > 50 and < 250 employees defined as medium sized firms.Likely, three enterprise sizes in this thesis is also based on the number of employees,but a little bit from Radicic & Petković (2023) to meet the Decree No 80/2021/ND-CP.

Accordingly, micro-enterprises are defined as firm with the range of employee number

≤ 10 employees, small enterprises with the employee number is the range of >10 - 100 employees, and medium enterprises with the employee number is the range of >100 -

200 employees As a result, three firm sizes are used in this thesis.

Table 3.8: Size of enterprises based on criteria of labor and capital

Small sized enterprise Medium size enterprise

Source: Decree No 80/2021/ND-CP

Over the decades, the emerging economic growth in Vietnam has been largely based on investment and labor The number of employees is increasing, and companies are investing more and more in machinery and equipment Business growth has been no longer in the traditional way In the future, the Vietnamese economic growth will mostly have to rely on the increase in labor productivity The most important driving force of productivity is innovation and digital marketing, namely driven by technology.SME's business in Vietnam is more and more developed According to GSO statistics,more than 50% of the economic growth comes from the profitability of SMEs.However, according to experts, including large enterprises such as economic groups or

SMEs that want to thrive in the future, it is necessary to encourage competition, innovation and how apply digital technology into marketing strategy To do that pioneer in digital transformation is the foundation for the development.

In sum, the main content of Chapter III presents a general picture of actual situation of SMEs in Vietnam Based on previous arguments, the research model is proposed with attachment of hypotheses To test hypotheses, two database surveys are merged In addition, the measure of variables enclosed in the research model is defined and informs that variables are extracted from the relevant questions designed in the questionnaires Two groups of variables concerned are main effects and control variables The main effects are defined as factors of digital marketing, technological innovation, digital orientation, and digital skills of employees.

DATA ANALYSIS

Overview about SMEs

Based on the 2023 white book of GSO, Vietnam currently has 895,876 active firms, which represents a 4.5% increase compared to 2021 and a 37% increase compared to 2017 (Figure 4.1) In 2022, firms are mostly dominant in three sectors The service sector holds the largest share at 67.8%, followed by the industrial and construction sector at 30.9%, and finally the agriculture, forest, and fisheries sector at 1.3%.

Figure 4.1: Number of enterprises in Vietnam from 2017-2022

In 2022, the average number of firms with more than 1000 employees is 18.6 enterprises, which is higher than the values in prior years such as 2017, 2018, 2019, and

2020 (Figure 4.2) Vietnam is divided into 63 provinces and cities Among these, 7 provinces have a significant number of operating enterprises with over 1,000 employees These cities are Ho Chi Minh City with 61.8 enterprises, Hanoi with 48.5 enterprises, Da Nang with 42.1 enterprises, Binh Duong with 22 enterprises, Hai Phong with 20.5 enterprises, Ba Ria-Vung Tau with 20.2 enterprises, and Bac Ninh with 18.2 enterprises Khanh Hoa has a total of 18.6 enterprises.

Figure 4.2: Intensity of enterprises per 1000 employees

In 2022, there were 148,533 newly founded firms, which represents a 27.1% increase compared to 2021 (Figure 4.3) This is an encouraging indication of Vietnam's economic recovery following the Covid-19 pandemic Among these industries, several sectors are experiencing a significant increase in the number of newly founded businesses For instance, service activities have a growth rate of 73.8%, accommodation and food services have a growth rate of 66.3%, health and social assistance have a growth rate of 65.5%, and arts, entertainment, and recreation have a growth rate of 65.5% In terms of the economic framework, the industrial and construction sector witnessed the establishment of 36,288 new firms, reflecting a growth rate of 16.1% In the agricultural, forest, and fisheries sector, there has been a decrease of 2% in the number of newly founded firms, with a total of 1,959.

Despite SMEs in Vietnam accounting for a significant proportion of overall firms and contributing 60% of the GDP, along with employing 30% of the entire workforce nationwide, they appear to have challenges related to personnel skills and financial resources Only a limited number of businesses are able to mitigate the adverse effects caused by competitors and market fluctuations.

Figure 4.3: Number of new enterprises established from 2016 - 2022

According to the Ministry of Planning and Investment, firms are seeing favorable developments in their perspective, digital transformation, and adoption of digital technology to support their commercial operations from 2021 to 2022 Small and medium-sized enterprises (SMEs) primarily prioritize digitalization and the gradual adoption of new technology and software due to budgetary constraints However, their efforts lack a clear objective.

Overall, SMEs in Vietnam have made significant advancements in integrating digital technology into their marketing strategies, distribution methods, and customer support systems This includes implementing omni-channel approaches to enhance the customer experience and ensure effective customer service In addition, digital technology is also involved in SMEs for the purpose of managing sales, inventory, and procurement Numerous enterprises have transferred their data into digital format and implemented standardized procedures to achieve digital transformation on a bigger and more standard level Nevertheless, the utilization of digital technology in numerous firms, particularly small and medium-sized enterprises (SMEs), remains limited and fragmented due to the absence of well-defined objectives, plans, and strategies for implementing digital technology from the beginning Hence, the efficacy of SMEs' investment in digital transformation for achieving optimal performance remains questionable and will be examined in this study.

Introduction

As mentioned in the previous chapter, the database used is the source of the Vietnamese General Statistics Office (GSO), who conducted the survey on enterprises in 63 provinces and cities in nationwide Vietnam Accordingly, two surveys are conducted and merged with each other, in which the first one is called as “enterprise survey” conducted on 553,664 active enterprises The second one is called “digital technology survey” conducted on 8,624 active enterprises As a result, those two surveys are merged through the common indicator of tax code of enterprise After merging and cleaning data, the final sample is 7,708 SMEs employed in this study, in which micro-enterprises, small enterprises and medium enterprises account for 40.4% (equivalent to 3,114 micro-enterprises), 39.1% (3,011 small enterprises), and 8.5% (655 medium enterprises) respectively.

The two mentioned surveys both have their separate questionnaires enclosed in Appendix 1 and Appendix 2 Consequently, two surveys are developed, each including hundreds of questions However, the questions used in the dissertation are extracted and displayed in Table 4.1.

Table 4.1: Information of variables used in the research model

Variables Questions extracted from questionnaires

The questionnaire is Form No 1/DN-TB enclosed in appendix

1 The question is asked as “total net revenue from sales and services”

The questionnaire is Form No 1/DN-TB enclosed in appendix

- Question No A2.2 is “the number of employees.”

- Question No A4.4 is “total net revenue from sales and services”.

The ratio between the number of employees and total sales revenue as labor productivity

Social media: The question No.8 belong the questionnaire in appendix 1, Form No 1.10/DN-VĐT

E-commerce: The question No.8 belong the questionnaire in appendix 1, Form No 1.10/DN-VĐT

CRM: The question No.8 in the questionnaire enclosed in appendix 1, Form No 1.10/DN-VĐT

Chatbot AI: The question 8 belong the questionnaire in appendix 1, Form No 1.10/DN-VĐT

Production innovation: The questionnaire in appendix 1, with question A5.3 of “How did the enterprise make innovation?” in Form No 1/DN-TB The Production process innovation: The questionnaire in appendix

1, with question A5.3 “How did the enterprise make innovation?” in Form No 1/DN-TB

R&D: The questionnaire in appendix 1, with question A5.3“How did the enterprise make innovation?” in Form No. 1/DN-TB

The question is No.3 in Form No 2/ĐTDN-CMCN enclosed in Appendix 2 The question of No.3 is “How does the company orient digital technology (Industry 4.) to serve business?”

Digital skills of employees (DS)

The questionnaire in appendix 2 The question is no.7 “How does the company rate digital skills of employees?” in Form

No 2/ĐTDN-CMCN with items: (i) Basic information technology; (ii) Automatic technology, (iii) Data analytics; (iv) Cybersecurity; (v) support system application; (vi) Collaboration software; (vii) System critical thinking and process understanding

Owner age The question No A1.6 in the Form No 1/DN-TB enclosed in

The question No A1.6 in the Form No 1/DN-TB enclosed in Appendix 1

Firm size The question No A2.2 in the Form No 1/DN-TB enclosed in

Appendix 1 Industry The questionnaire in Appendix 2, with the question main industry based on VSIC – level 5 in Form No 1.10/DN-VĐT

Result of descriptive statistics

As presented in table 4.2, the statistical model applied is regression model, which sales performance and productivity performance of SMES are dependent variables. Accordingly, two different dependent variables are entered the regression function with the same independent variables, e.g main effects and control variables The main effects consist of independent variables of digital marketing (DM), technological innovation (TI), digital orientation (DO), and digital skills of employees (DS) The control variables encompass independent variables of age of owner, education of owner, firm size, and industry.

The variables utilized in the research model are taken from the questions that GSO designed in the questionnaire The selection and definition of dependent and independent variables are grounded on the work of earlier researchers These variables were already defined in Chapter III They are entered in the statistical model through previous arguments as findings.

Descriptive statistics in table 4.2 present an overall picture of dependent and independent variables employed in the statistical models The average sales of 60 billion VND per year is not high, due to the high proportion of SMEs in the whole sample In addition, the labor productivity is 2.2 million VND per year, this means that each employee produces 2.2 million VND per year on average.

Variables Obser vation Mean Standard deviation Min Max

Education (1 = Training < 3 months (5.7%); 2 = Primary training (3.7%); 3 = Intermediate training (7.4%); 4 = College

The data in the table brings a message of how much digital technology resources available are invested in enterprises Digital marketing refers to the whole expenditure on social media, E-commerce, CRM, and Chatbot AI On average, businesses invest1,309 million VND per year in these areas On average, the technological innovation of firms has a mean value of 3.23 on a five-point scale, indicating a medium level of investment The digital orientation, with an average score of 1.82 on a five-point scale, is assessed as being very poor Similarly, computer skills are likewise not great. Overall, businesses' investment in digital orientation and the development of employees' digital skills remains low, possibly due to limitations in digital technology infrastructure and a lack of financial capacity This is a big challenge for SMEs to effectively employ digital technology to promote business Thanks to enterprises, because mostly entrepreneurs’ education is good enough, their level of undergraduate and graduate account the highest percentage of 78% Furthermore, the entrepreneur is approximately 36.8 years old and possesses extensive expertise in their field of industry This can be an advantage for family businesses because these owners need actual experiences to manage their business.

With 7,708 enterprises employed in the study, micro-enterprises account for40.4%, small enterprise accounts for 39.1%, and that of medium enterprises occupies8.5% Of which the sector of food processing industry is 29%, the rest is others.

Result of testing hypotheses

As defined previously, two indicators of sales revenue performance (FP_Rev) and productivity performance (FP_Pro) are defined as SME performance.

To the results of main effect in pool data

Based on the general models of ordinary least squares (OLS), the results estimated are enclosed in Appendix 3 The results of Table 4.3 and 4.4 are summarized from Appendix 3.1 to 4.20 Accordingly, the main effects entered regression models of pool data resulted in Tables 4.2 and 4.3 are digital marketing (DM), technological innovation (TI), digital orientation (DO), and digital skills (DS) of employees These variables are used to investigate their impact on revenue performance (FP_Rev) and productivity performance (FP_Pro) of a firm Accordingly, Tables 4.3 and Table 4.4 show that regression models of Model 1.1 to 10 and Model 2.1 to 2.10 result that the coefficients of DM, TI, and DO are highly significant and positively affect sales turnover and productivity of enterprises The positive coefficients of DM, TI, and DO suggest that both the individual factors and their association have a significant positive impact on firm performance.

As resulted above, a strong conclusion of digital marketing, technological innovation, and digital orientation have a significant and positive influence on firm performance It highly confirms that hypotheses of H1, H2, and H3 are accepted That means that digital marketing positively influences firm performance (H1), this finding aligns with Barnes et al (2012), Sultoni et al (2022), and Umar et al (2020) In addition, we also see that technological innovation SME performance (H2) This finding aligns with the research by Azar & Ciabuschi (2017), showcasing how advancements in technology are propelling SME performance to new heights This is consistent with Thornhill (2006), who sheds light on the remarkable impact of technological innovation on enhancing firm performance.

The finding also brings a message that digital orientation positively influences firm performance (H3) This finding is consistent with Kindermann et al (2021) and underscores the importance of embracing digital technologies and strategies in today's business landscape Furthermore, embracing digital transformation of enterprises in the emerging market enhances operational efficiency within firms, in which automation of processes, data analytics, and cloud-based solutions can streamline operations, reduce costs, and improve overall productivity.

In sum, the impact of digital marketing, technological innovation, and digital orientation on SME performance has been a topic of interest, especially when compared with previous findings The adoption of digital marketing strategies coupled with technological innovations empowers SMEs to compete more effectively in the modern business landscape A strong digital orientation allows enterprises to leverage online platforms, data analytics, and automation tools to streamline operations and connect with their target audience more efficiently.

In terms of digital skills of employees as a moderating variable

It is observed that the digital skills of employees are significantly existed in all regression models: Model 1.3 to Model 1.10 and Model 2.3 to 2.10 (except model 2.4).Accordingly, the coefficient of digital skills is positive and significant, we conclude that the existence of employees’ digital skills (DS) impacting on the sales revenue and productivity of enterprises are confirmed The only interaction between digital orientation and digital skills (DO x Ds), however, impacts on firm performance, because its coefficients (-0.018 in Model 1.5; -0.013 in Model 2.5) are significant at any level As a result, the hypothesis of H9 is supported, that means the relationship between digital orientation and firm performance is moderated by employees’ digital skills” However, the hypothesis of H7 and H8 is not supported To H7, there is sufficient evidence to suggest that the digital abilities of employees have a moderating role in the influence of digital marketing on the success of a corporation This is because workers' digital skills are not just focused on marketing activities; many of them are also tied to fundamental information technology abilities This might be attributed to the fact that small and medium-sized enterprises (SMEs) lack a specific plan for implementing digital marketing strategies, instead focusing solely on a plan for overall digital transformation As a result, their proposal for H7 is likely to be rejected. Similarly, to H8, there is a lack of evidence to indicate that the digital skills of employees have a moderating effect on technological innovation that impacts the performance of the company Employees' digital skills are primarily tied to their information technology capabilities, which may be expressed in a similar manner Thus, the advancement in technical innovation, encompassing product innovation, manufacturing process innovation, and R&D application, is not readily apparent The rejection of H8 is due to this specific cause.

Due to the negative sign of the interaction coefficient (-0.018 in Model 1.5; -0.013 in Model 2.5), the relationship between DO and DS is inverse, that is, an increase in one of them results in a decrease in the other, which in turn leads to an improvement in firm performance Consequently, the result supports the alternative hypothesis H9, which signifies that the relationship between digital orientation and firm performance is moderated by employees’ digital skills.

Interaction between DM and TI (DM x TI) (H4)

The goal of investigating the interaction between DM and TI (DM x TI) is to determine whether TI exists as a moderating variable in the association between DM and firm performance As resulted in models of Model 1.7, Model 1.10, Model 2.7, andModel 2.10, the interaction coefficients of (DM x TI) are significant in Model 1.7,

Model 1.10, and Model 2.7 This confirms the existence of TI moderating the relationship between DM and firm performance This supports the conclusion that there is a moderating component called TI that contributes to the relationship between DM and SME performance Consequently, hypothesis H4 is supported, that means technological innovation strengthens the relationship between digital marketing and firm performance We also say that technical advancement with respect to innovation improves the association between digital marketing and firm performance.

Interaction between DM and DO (DM x DO) (H5)

The goal of examining the interaction between DM and DO (DM x DO) is to determine whether the function of DO as a moderating factor in the relationship between DM and firm performance As demonstrated by models of Model 1.8, Model 1.10, Model 2.8, and Model 2.10, both DM and DO have an impact on revenue and productivity of enterprises, and their interaction (DM x DO) also has an existing impact on firm performance This proves hypothesis H5 is supported The conclusion is that digital orientation strengthens the relationship between digital marketing and SME performance This also means that there is a moderating variable called DO, it has a significant contribution to digital marketing and firm performance.

Interaction between TI and DO (TI x DO) (H6)

The goal of examining the interaction between TI and DO is to determine whether

DO functions as a moderating factor in the relationship between TI and firm performance or not Models of Model 1.9, Model 1.10, Model 2.9, and Model 2.10 show that while not only both TI and DO have a significant impact on revenue and productivity of firm, but also their interaction (DM x DO) has a significant impact on firm performance This provides enough evidence to say that the hypothesis H6 is supported We conclude that digital orientation strengthens the relationship between technological innovation and SME performance, in which the variable of DO exists and serves as a moderating variable Consequently, the association between technical innovation and SME success is strengthened by digital orientation.

Table 4.3: Estimated output with digital skills of employees as moderator

Sales (natural logarithm) Productivity (natural logarithm)

Model 1.1 Model 1.2 Model 1.3 Model 1.4 Model 1.5 Model 1.6 Model 2.1 Model2.2 Model2.3 Model2.4 Model2.5 Model2.6 Main effect

Note: (***) Significant at 1%, (**) Significant 5%, (***) Significant at 10% Values in brackets are standard error

Table 4.4: Results with interacted main effects

Variables Sales (natural logarithm) (FP_Rev) Productivity (natural logarithm) (FP_Pro)

Model 1.7 Model 1.8 Model 1.9 Model 1.10 Model 2.7 Model 2.8 Model 2.9 Model 2.10 Main effect

Note: (***) Significant at 1%, (**) Significant 5%, (***) Significant at 10% Values in brackets are standard error

Age of owner (Age) is significant across all Model 1.1 to Model 1.10 and Model

2.1 to Model 2.10 (except for Model 2.8) However, this finding is different to Mujeyi et al (2016) and Zhang (2017) According to these authors, the younger age of leaders is dynamic to adapt changes in competition The age of owners can have both positive and negative impacts on firm performance While experience and wisdom that come with age can lead to better decision-making and strategic planning, older owners may also be resistant to change and innovation, which can hinder the firm's growth The positive relationship between owners’ age and firm performance in this study is partly explained, micro-enterprises account for 40.4% in the total sample, so the owners of family business with more experience they have accurate decisions to increase firm growth (Woldie et al., 2008).

Education (Edu) shows statistical significance in models ranging from Model 1.1 to Model 1.10 and from Model 2.1 to Model 2.9 This result confirms that higher education is positively related to higher firm performance, which is consistent with the findings of Doms et al (2010) Their research illuminates the substantial influence that the educational background of business leaders can have on the performance and growth of their enterprises By delving into the previous authors findings, we gain valuable insights into how educational background influences decision-making, innovation, and overall strategic direction within the enterprise Understanding these arguments is crucial for entrepreneurs looking to enhance their business acumen and drive better performance outcomes.

Firm size (Size) has a statistically significant impact in all models The coefficients of the size variable in Models 1.1 to 1.10 are positive, indicating that larger firm size is associated with better sales revenue for firms The coefficients of size variables inModel 2.1 to Model 2.10 are both significant and negative, indicating that company size increases, productivity performance decreases This is not surprising given that the firm's labor productivity is calculated as total sales divided by total employees As a result, it is commendable that the findings of this thesis align with the research conducted by some previous authors, e.g Bendig et al (2023) and Ganotakis et al.

(2023) Their study regarding the relationship between firm size and firm performance provides valuable insights into this topic By acknowledging and building upon the work of Bendig et al (2023) and Ganotakis et al (2023), this thesis contributes to a deeper understanding of how firm size can impact firm performance.

Industry is previously categorized into two groups: 1 being food processing firms and 0 for all other types of businesses The coefficients of the industry variable in models ranging from Model 1.1 to Model 1.10 are both significant and positive, providing clear evidence of a significant association between the food processing enterprises and their sales revenue Models 2.1 to 2.10, except Models 2.8 and 2.10, show a significant negative relationship between the food processing SME industry and productivity performance at a 10% significance level This provides information on the lower productivity of food processing enterprises compared to other forms This is unsurprising, as food processing industries often employ a larger workforce compared to other businesses Previous research by Bendig et al (2023) and Nasiri et al (2022) have explored the relationship between industry and firm performance, but no significant relationship was identified The presence of the food processing industry in the models in this thesis is attributed to the prominence of agricultural, aquaculture, and marine economies in Vietnam.

Discussion of findings

As confirmed, the hypothesis of H1 is accepted, this means digital marketing positively influences SME performance This finding is consistent with Djakasaputra et al (2021), who take a study on 125 Indonesian SMEs and found sales performance of SMEs is significantly depended on digital marketing, in which digital marketing is defined by social media, e.g Facebook, Instagram, and WhatsApp to communicate clients In addition, with an application of structural model on 180 Indonesian SMEs, Daud et al (2022) also verify an existing relationship between digital marketing and SME performance, in which financial performance is taken into account Based on technological innovation concept, Pham et al (2021) employ dimensions of innovation types, e.g innovation by new products, innovation by new process, innovation by improvement in product or process, all of them have a significant impact on firm performance This is online with the finding of this thesis.

As confirmed, the hypothesis of H2 is accepted, this brings a message that the impacts of technological innovation on SME performance reveals a critical need for SMEs to adapt and embrace emerging technologies Therefore, it is imperative for SMEs to proactively integrate technology into their business strategies to stay as long as possible This is also proved by Sulistyo & Siyamtinah (2016), which their research demonstrates how adopting innovations in technology can improve productivity,competitiveness, and overall performance for SMEs.

As found, the hypothesis of H3 is accepted, this means digital orientation positively influences firm performance This finding is consistent with Bendig et al. (2023), but opposite with Nasiri et al (2022), who have a study on 284 large companies confirm that there is not direct effect of digital orientation on firm performance (net profit and operating profit) The claim that digital orientation positively influences SME performance is not without its skeptics While Ganotakis et al (2023) argue that embracing digital tools and strategies can indeed lead to improved efficiency and competitiveness for firms Advocates of digital orientation point to the ability of technology to streamline processes, enhance customer engagement, and open new markets They argue that SMEs that leverage digital tools are better positioned to adapt to changing market dynamics and capitalize on emerging opportunities.

As found, the hypothesis of H4 is accepted that means technological innovation strengthens the relationship between digital marketing and firm performance. Accordingly, technological innovation plays a crucial role as a moderator in strengthening the relationship between digital marketing and firm performance. Although the study of Radicic & Petković (2023) is not exactly the same with this study, their conclusion looks like the conclusion of the hypothesis H4 They shed light on how SMEs embrace digital tools, e.g cloud computing technology and internet of things, to streamline operations, enhance customer experiences, and drive innovation like never before.

As found, the hypothesis of H5 is supported that means digital orientation strengthens the relationship between digital marketing and firm performance Digital orientation serves as a moderator in this relationship, guiding SMEs towards leveraging the power of online platforms to enhance their performance It helps businesses understand how to effectively utilize digital marketing tools and techniques to reach their target audience and achieve their business goals In sum, when SMEs adopt a proactive digital orientation, they are better equipped to navigate the challenges posed by competitors in the digital sphere This strategic shift allows them to tap into new market segments, engage with customers more effectively, and ultimately drive growth in an increasingly digitized business environment.

As found, the hypothesis of H6 is supported that means digital orientation strengthens the relationship between technological innovation and SME performance. Accordingly, the digital orientation of SMEs plays a crucial role in moderating the impacts of technological innovation on firm performance, especially in the context of competition Likely, with the study on 369 SMEs in the North America, Ardito et al. (2021) conclude a significant contribution of digital orientation into product innovation and process innovation of SMEs and show that SMEs with a strong digital orientation tend to outperform their competitors in terms of innovation and market responsiveness

As found, the hypothesis of H7 is not supported that means that the relationship between digital marketing orientation and firm performance is not moderated by employees’ digital skills It is crucial to understand that the correlation between digital marketing orientation and firm performance remains unaffected by the digital skills of employees This perspective suggests that while digital skills are valuable, they may not be perceived completely on the importance of digital tools, such as social media, e- commerce, Chatbot, and CRM.

As found, the hypothesis of H8 is not supported, that means the relationship between technological innovation and firm performance is not moderated by employees’ digital skills This result helps to explain why employees at SMEs are not utilizing their digital skills to investigate R&D, process innovation, and product innovation This can also be explained by the fact that SMEs cannot afford to use the digital capabilities of their staff to drive technological innovation As argued by Ciarli et al (2021), digital skills of employees are necessary to meet digital technologies in firm toward innovation routines of organization and product This partly supports the explaining that digital skills do not moderate technological innovation on firm performance.

As found, the hypothesis of H9 is supported that means the relationship between digital orientation and SMEs is moderated by digital skills of employees This finding is consistent with arguments of Radicic & Petković (2023) Accordingly, the authors explore the interesting domain of the relationship between digital orientation in SMEs and the digital competencies exhibited by their workforce Conclusion is that the thesis

‘s finding sheds light on how the level of digital proficiency among staff members can significantly influence the way SMEs navigate and leverage digital technologies in today's rapidly evolving business landscape.

Testing results by firm size (micro, small, and medium enterprises)

In the previous section, the hypothesis testing applied on the pool data with the sample size of 7,708 enterprises in Vietnam Unlikely, this section presents separate estimated results of different firm sizes, in which micro-enterprises (40.4%, equivalent to 3,114 observations), small enterprises (39.1%, equivalent to 3,011 observation), and medium enterprises (8.5%, equivalent to 655 observation) are considered Results estimation of statistical models by firm sizes will be discussed separately as below.

As defined, 3,114 micro-enterprises (accounting for 40.4% of total sample) are used to estimate in all models, its results are derived detailly from Appendix 3.21 to Appendix 3.40 These outputs are summarized in Table 4.6 & Table 4.7 Accordingly, main effects of DM and DO are highly significant and positive in models, such as Mod 1a.1 to Mod 1a.10 (except Mod 1a.7 and Mod 1a.10) and Mod 2a.1 to Mod 2a.10 This finding gives enough evidence to conclude that digital marketing and digital orientation positively influence sales revenue and productivity of micro-enterprises As a result, we conclude that digital marketing positively influences micro-enterprises’ performance (H1) and digital orientation positively influences micro-enterprises’ performance (H3) are accepted Unluckily, TI is not found to have its existing impacting the performance of micro-enterprises that means the hypothesis of H2 “technological innovation positively influences firm performance” is not supported This can be explained, micro- enterprises often are small trading business and limited technology investment, for this case, technological innovation is popularly invested by micro-enterprises.

DS entered in the model as the moderating factor is found that it plays an important role to moderate effects of DM on firm performance (Mod 1a.3, Mod 1a.6,Mod 2a.3, and Mod 2a.6), while the moderating role of DS is not found in Mod 1a.4,Model 1a.5, Mod 2a.4, and Model 2a.5 As a result, the hypothesis of H7 is supported,this means digital skills of employees make a significantly positive contribution to digital marketing on sales revenue and productivity performance of micro-enterprises This result is a message that micro-enterprises in the emerging market, e.g Vietnam, know how to explore advantages of digital resources to improve their business This aligns with arguments of Radicic & Petković (2023), which once digitalization of micro firms pays more attention, the positive impacts on firm’s innovation toward product and process are occurred The finding also confirms that the hypotheses of H8 “the relationship between technological innovation and firm performance is moderated by digital skills” and H9 “The relationship between digital orientation and firm performance is moderated by digital skills” are both not supported As a result, digital skills of employees play an important role in micro-enterprises Because the coefficients of interaction between DM and DS (DM x DS) is positive (0.036 in Mod 1a.3; 0.035 in Mod 1a.6; 0.034 in Mod 2a.3; 0.033 in Mod 2a.6), once digital skills increase it causes a rise in the relationship between digital marketing and micro-enterprises’ performance.

As resulted in Table 4.6, models of Mod 1a.8, Mod 1a.10, Mod 2a.8, and Mod 2a.10 show that the interaction between digital marketing and digital orientation (DM x DO) is highly significant This verifies that the moderating role of digital orientation affects the relationship between digital marketing and performance of micro- enterprises As a result, the hypothesis of H5 “digital orientation strengthens the relationship between digital marketing and firm performance” is supported in terms of micro-enterprises However, the interaction coefficient of (DM x DO) is negative (- 0.020 in Mod 1a.8, Mod 1a.10, Mod 2a.8, and Mod 2a.10), our findings indicate that a rise in digital orientation, along with suitable adjustment of digital marketing, leads to an increase in the relationship between digital marketing and the performance of micro- enterprises.

In terms of the hypothesis of H4 and H6, we cannot find enough evidence to conclude their existence in statistical models This means H4 “technological innovation strengthens the relationship between digital marketing and firm performance” and H6

“digital orientation strengthens the relationship between technological innovation and firm performance” are both rejected.

To control variables, we could not find enough evidence to say that owner’s age, owner’s education, and industry have influences on the performance of micro- enterprises However, we can see that firm size has a positive role in improving sales and productivity of micro-enterprises, this is seen in models of Mod 1a.1 to Mod 1a.10 and Mod 2a.1 to Mod 2a.10.

In sum, with 9 hypotheses concerned in terms of micro enterprises, hypotheses of H1, H3, H5, and H7 are supported, while the hypotheses of H2, H4, H6, H8, and H9 are rejected This result is summarized in Table 4.8.

The findings demonstrate how micro-enterprises use digital resources It is the responsibility of digital marketing and positioning to precisely explain how they improve the performance of businesses Furthermore, the findings of the study suggest that digital orientation is involved in the model as moderator to moderate digital marketing affects microbusiness performance.

Table 4.6: Estimated output with digital skills of employees as moderator of micro-enterprise

Sales (natural logarithm) (FP_Rev) Productivity ((natural logarithm) (FP_Pro) Mod 1a.1 Mod 1a.2 Mod 1a.3 Mod 1a.4 Mod 1a.5 Mod 1a.6 Mod 2a.1 Moda 2a.2 Mod 2a.3 Mod 2a.4 Mod 2a.5 Mod 2a.6 Main effect

Table 4.7: Results with interacted main effects of micro-enterprises

Variables Sales (natural logarithm) (FP_Rev) Productivity (natural logarithm) (FP_Pro)

Mod 1a.7 Mod 1a.8 Mod 1a.9 Mod 1a.10 Mod 2a.7 Mod 2a.8 Mod 2a.9 Mod 2a.10 Main effect

Table 4.8: Result of testing hypothesis in terms of micro-enterprises

Hypothesis Model Result of testing

H1: Digital marketing positively influences firm performance

Supported An increase in digital marketing makes a rise in firm performance

H2: Technological innovation positively influences firm performance

Rejected An increase in technological innovation does not make a rise in firm performance

H3: Digital orientation positively influences firm performance

Supported An increase in digital orientation makes a rise in SME performance

H4: Technological innovation strengthens the relationship between digital marketing and firm performance

Rejected Technological innovation does not strengthen the relationship between digital marketing and firm performance

H5: Digital orientation strengthens the relationship between digital marketing and firm performance

Supported Digital orientation negatively moderates the relationship between digital marketing and firm performance.

Hypothesis Model Result of testing

H6: Digital orientation strengthens the relationship between technological innovation and firm performance

Rejected Digital orientation negatively moderates the relationship between technological innovation and firm performance.

H7: The relationship between digital marketing and firm performance is moderated by employees’ digital skills

Supported The relationship between digital marketing orientation and firm performance is positively moderated by employees’ digital skills

H8: The relationship between technological innovation and firm performance is moderated by employees’ digital skills

Rejected The relationship between technological innovation and firm performance is not moderated by employees’ digital skills

H9: The relationship between digital orientation and firm performance is moderated by employees’ digital skills

Rejected The relationship between digital orientation and firm performance is moderated by employees’ digital skills

As defined, 3,011 small enterprises (accounting for 39.1% of total sample) are used to estimate in all models, its results are derived detailly from Appendix 3.41 toAppendix 3.60 These outputs are summarized in Table 4.9 & Table 4.10 Accordingly, as Mod 1a.1 to Mod 1a.10 and Mod 2a.1 to Mod 2a.10 This finding gives enough evidence to conclude that the hypotheses of H1, H2, and H3 are supported As a result, digital marketing, technological innovation, and digital orientation play an important role in positively contributing to sales revenue and productivity of small enterprises. This is consistent with arguments of Radicic & Petković (2023), which once digitalization of small firms pays more attention, the positive impacts on firm’s innovation toward product and process.

With the variable of DS entered in the regression models (Mod 1b.3, Mod 1b.4, Mod 1b.5, Mod 1b.6, Mod 2b.1, Mod 2b.2, Mod 2b.3, and Mod 2b.4) as the moderating one, the result derives that DS is not found to moderate the relationship between DM and performance of small enterprises (Mod 1b.3, Mod 1b.6, Mod 2b.3, and Mod 2b.6). Also, DS does not moderate the relationship between TI and performance of small enterprises (Mod 1b.4, Mod 1b.6, Mod 2b.4, and Mod 2b.6) As a result, the hypotheses of H7 and H8 were rejected In contrast, DS is found as the moderator in Mod 1b.5, Mod 1b.6, Mod 2b.5, and Mod 2b.6 Accordingly, the hypothesis of H9 is supported, that means the relationship between digital orientation and small enterprises’ performance is moderated by employees’ digital skills.

In terms of interaction among main effects, the result in Table 4.9 derives from the fact that the interaction between DM and TI (DM x TI) is not significant in models of Mod 1b.10, Mod 2b.7, and Mod 2b.10 But this interaction is significant at 10% level in Mod 1b.1 So, we can conclude that the hypothesis of H4 exists in the model that means that technological innovation strengthens the relationship between digital marketing and small enterprises’ SME We also see that the interaction between DM and DO in models of Mod 1b.8, Mod 1b.10, Mod 2b.8, and Mod 2b.10 is highly significant and brings a message that the hypothesis of H5 is supported This means digital orientation strengthens the relationship between digital marketing and small firms’ performance, in which DO moderate the impact of DM on small enterprises’ performance Likely, the interaction between technological innovation and digital orientation (TI x DO) in models of Mod 1b.9, Mod 1b.10, Mod 2b.9, and Mod 2b.10 is significant at 5% and 10% We conclude the hypothesis of H6 is supported, this means digital orientation strengthens the relationship between technological innovation and SME performance.

In sum, with 9 hypotheses concerned in terms of small enterprises, hypotheses of H1, H2, H3, H4, H5, H6, and H9 are supported, while the hypotheses of H7 and H8 are rejected This result is summarized in Table 4.11 Accordingly, the role of digital marketing, technological innovation and digital orientation is indispensable for small enterprises Particularly, they have a positive contribution to sales revenue and productivity of small enterprises Compared with micro-enterprises, the entrepreneur’s education of small enterprises positively influences small enterprises’ performance. This may be explained that once the bigger size of firm, the education level of entrepreneur is very important Likely, we also find that the number of employees has an appositive impact on the performance of small businesses However, models of Mod 2b.1 to Mod 2b.10 result that the higher number of employees makes a lower productivity of firm, due to the productivity is the ratio between sales and the number of employees.

Table 4.9: Estimated output with digital skills of employees as moderator of small enterprises

Sales (natural logarithm) (FP_Rev) Productivity (natural logarithm) (FP_Pro) Mod 1b.1 Mod 1b.2 Mod 1b.3 Mod 1b.4 Mod 1b.5 Mod 1b.6 Mod 2b.1 Moda 2b.2 Mod 2b.3 Mod 2b.4 Mod 2b.5 Mod 2b.6 Main effect

Table 4.10: Results with interacted main effects of small enterprises

Variables Sales (natural logarithm) (FP_Rev) Productivity (natural logarithm) ((FP_Pro)

Mod 1b.7 Mod 1b.8 Mod 1b.9 Mod 1b.10 Mod 2b.7 Mod 2 b.8 Mod 2b.9 Mod 2b.10 Main effect

Table 4.11: Result of testing hypothesis in terms of small enterprises

Hypothesis Model Result of testing

H1: Digital marketing positively influences firm performance

Supported An increase in digital marketing makes a rise in firm performance

H2: Technological innovation positively influences firm performance

Supported An increase in technological innovation makes a rise in firm performance

H3: Digital orientation positively influences firm performance

Supported An increase in digital orientation makes a rise in firm performance

H4: Technological innovation strengthens the relationship between digital marketing and firm performance

Supported Technological innovation strengthens the relationship between digital marketing and firm performance

H5: Digital orientation strengthens the relationship between digital marketing and firm performance

Supported Digital orientation negatively moderates the relationship between digital marketing and firm performance.

Hypothesis Model Result of testing

H6: Digital orientation strengthens the relationship between technological innovation and firm performance

Supported Digital orientation negatively moderates the relationship between technological innovation and firm performance.

H7: The relationship between digital marketing and firm performance is moderated by employees’ digital skills

Rejected The relationship between digital marketing orientation and firm performance is not moderated by employees’ digital skills

H8: The relationship between technological innovation and firm performance is moderated by employees’ digital skills

Rejected The relationship between technological innovation and firm performance is not moderated by employees’ digital skills

H9: The relationship between digital orientation and firm performance is moderated by employees’ digital skills

Supported The relationship between digital orientation and firm performance is moderated by employees’ digital skills

As defined, 655 medium enterprises (accounting for 8.5% of total sample) are used to estimate in all models, its results are derived detailly from Appendix 3.61 toAppendix 3.80 These outputs are summarized in Table 4.12 & 4.13 Accordingly, the

Mod 6c.10 and Mod 2c.1 to Mod 2c.10 This finding confirms that the hypotheses of H1 and H2 are supported As a result, we conclude that sales revenue and productivity of medium enterprises are positively influenced by digital marketing and technological innovation This finding aligns with arguments of Su et al (2023), which medium enterprises must adopt digital marketing and concerning innovation, due to fire competition once the firm size is larger Surprisingly, the significant relationship between digital orientation and the performance of medium enterprises is not found As a result, the hypothesis of H3 is not supported in all models (Mod 1c.1 to Mod 1c.10 and M2c1 to Mod 2c.10), that means digital orientation does not cause an increase in sales revenue and productivity of medium enterprises.

With the variable of DS entered in the regression models (Mod 1c.3, Mod 1c.4, Mod 1c.5, Mod 1c.6, Mod 2c.1, Mod 2c.2, Mod 2c.3, and Mod 2c.4) as the moderating one, the result derives that DS is not found to moderate the relationship between DM and SME performance (Mod 1b.3, Mod 1b.6, Mod 2b.3, and Mod 2b.6), also not moderate the relationship between TI and SME performance (Mod 1b.4, Mod 1b.6, Mod 2b.4, and Mod 2b.6) As a result, the hypotheses of H7 and H8 were rejected In contrast, DS is found as the moderator in Mod 1c.5, Mod 1c.6, Mod 2c.5, and Mod 2c.6 As a result, the hypothesis of H9 is supported, that means the relationship between digital orientation and SME performance is moderated by employees’ digital skills.

In terms of interaction among main effects, the result in table 4.13 derives that the interaction between DM and TI (DM x TI), the interaction between DM and DO (DM x DO, and the interaction between TI and DO (TI x DO) are not significant at all models of Mod 1c.7, Mod 1c.8, Mod 1c.9, Mod 1c.10, Mod 2c.7, Mod 2c.8, Mod 2c.9, and Mod 2c.10 As a result, the hypotheses of H4, H5, and H6 are not supported These results give a message that technological innovation and digital orientation do not play the moderating one to the paired interaction in medium enterprises.

Discussion of overall model and models by firm sizes

The testing results of overall data and firm sizes are summarized in Table 4.15. The main effects of digital marketing, technological innovation, and digital orientation are seen significantly and have a positive influence on sales and productivity of SMEs.

With rapid development of digital era, digital marketing is positively considered by micro-enterprises, small enterprises, and medium enterprises in the emerging market, e.g Vietnam As defined previously, four dimensions, e.g social media, e- commerce, CRM, and auto transaction system of Chatbot, belong to digital marketing make a positive contribution to enhancing SME performance.

Table 4.15: Result of testing hypothesis by firm size

H1: Digital marketing positively influences firm performance

H2: Technological innovation positively influences firm performance

H3: Digital orientation positively influences SME performance

H4: Technological innovation strengthens the relationship between digital marketing and firm performance

H5: Digital orientation strengthens the relationship between digital marketing and firm performance

H6: Digital orientation strengthens the relationship between technological innovation and SME performance

H7: The relationship between digital marketing and firm performance is moderated by employees’ digital skills

H8: The relationship between technological innovation and firm performance is moderated by employees’ digital skills

H9: The relationship between digital orientation and firm performance is moderated by employees’ digital skills

Technological innovation becomes more important for small and medium enterprises, but it is not found to exist in micro-enterprises As mentioned previously,micro-enterprises are family businesses, so their product innovation, process innovation, and R&D are not employed popularly Small and medium enterprises may pay more attention to technological innovation, because their business is larger and necessary technological innovation to remain competitive markets These innovations are concentrated product innovation, production process, and implementation of R&D.

As found, digital orientation is paid more attention by micro and small enterprises but does not exist in medium enterprises This is consistent with Nasiri et al (2022), small businesses need survival in the period of digital technology, so they do not hesitate to invest (i) Cloud computing technology; (ii) advanced robotics; (iii) Progressive manufacturing technology (Print 3D), (iv) Augmented reality (AR); (v) Modeling techniques; (vi) Internet of Things; (v) Cybersecurity; (vi) Big data application; (vii) system integration.

Technological innovation not only influences small enterprises’ performance directly, but also it strengthens the relationship between digital marketing and small enterprises’ performance (H4) This is seen as a new point of the thesis, once small enterprises pay more attention to innovation of product or service, production process and R&D, their digital marketing investment is engaged with a careful perception to enhance sales and productivity Additionally, digital orientation strengthens the relationship between digital marketing and performance of both micro and small enterprises (H5) This is a novelty of the study to confirm that resources of digital technology derive digital marketing investments of enterprises, in which the moderating role of digital orientation is shown up Besides that, the finding also confirms that digital orientation plays as the moderator influencing impacts of technological innovation on only small enterprises’ performance (H6), this is not applied to micro and medium enterprises.

As argued by Bokek-cohen (2018), digital skills of employees play an important role in the period of digital era This is confirmed through statistical models, the existence of digital skills moderates the impact of digital orientation on sales revenue and productivity, this case is only applied to micro-enterprises The finding is an academic contribution to conceptualize digital skills as potential to improve productivity of firm, in which digital skills can consists of capability of basic information technology, automatic technology, data analytics, cybersecurity, support system application, collaboration software, and system critical thinking and process understanding This result is seen as a new point of study, resources of digital technologies in small enterprises causes a positive impact on performance and this provides significant expansion of digital technology to theory of RBV.

The moderating role of employees’ digital skills between technological innovation and SMEs performance is not found in micro, small and medium size of firm (H8). However, the employees’ digital skills are an important catalyst to moderate the relationship between digital orientation and SME performance However, this case is applied to small and medium enterprises So, the conceptualization of digital skills is clear for small and medium enterprises rather than micro enterprises.

Based on statistical models estimated in database of micro-enterprises, small enterprises, and medium enterprises The findings are consistent with arguments of Taiminen & Karjaluoto (2015), which the utilization of firm’s digital technology is depended on firm sizes As found, digital orientation significantly exists in micro- enterprises and small enterprises rather than medium enterprises The larger enterprises, the higher investment in digital skills This is a reason that digital skills of employees in small and medium enterprises play a moderating role to strengthen the relationship between digital orientation and firm performance, but this is found in micro-enterprises.

CONCLUSION AND RECOMMENDATION

Conclusion

The dissertation has an approach on the sample size of 6,780 SMEs merged by two sources Continuously the statistical models of regression are employed to test nine hypotheses Testing hypotheses is carried out in pool database and sub-database by different firm sizes, which micro-enterprises, small enterprises and medium enterprises are considered to test With the pool database, seven hypotheses (H1, H2, H3, H4, H5, H6, and H9) are supported and two hypotheses (H7 and H8) are rejected However, a little bit of differences of the testing results for nine hypotheses by micro, small and medium enterprises.

In general, digital marketing plays a crucial role in enhancing the performance of three firm levels: micro-enterprises, small enterprises, and medium enterprises by providing them with cost-effective tools to reach their target audience effectively By leveraging digital marketing strategies, SMEs can level the playing field with larger competitors and expand their market reach The finding also brings a message that the integration of digital marketing tactics such as social media advertising, E-commerce, Chatbot AI, and CRM significantly boost SME performance (Masrianto et al., 2022; Wang, 2020) This novel approach to digital marketing allows SMEs to compete in today's digital landscape and thrive in an increasingly competitive market environment, but the problem is that SMEs must know how to use full advantages of digital tools (Taiminen & Karjaluoto, 2015)

Technological innovation is seemly more important for small and medium enterprises But it is not supported for microenterprises, because the testing result derives that the impact of technological innovation is not as significant as expected for microenterprises Maybe microenterprises are family businesses and often concentrate on business activities such as small trading, and small-scale production However, the existing influence of technological innovation on the performance of small and medium enterprises is confirmed by embracing product innovation, process innovation and investing in research and development (R&D) This aligns with arguments of (Omri, 2020), the application of R&D allows small and medium enterprises stay ahead by developing new products or improving existing ones Process innovation streamlines operation, leading to increased efficiency and cost savings (Wang, 2019) These advancements not only benefit SMEs themselves but also contribute to overall economic growth.

Although digital orientation has a positive contribution to environmental performance (Bendig et al., 2023), its influence to sales revenue and productivity of SMEs is not popular in previous studies Employing digital orientation in the research model in this dissertation is a new point that the dissertation wants to investigate its contribution to firm business As found, the digital orientation of micro and small enterprises has a profound impact on their performance and competitiveness in the emerging market Embracing advanced technologies such as cloud computing, robotics, 3D printing, augmented reality, modeling techniques, Internet of Things (IoT), cybersecurity measures, and big data applications can significantly enhance operational efficiency and unlock new opportunities for growth (Sultoni et al., 2022).

Technological innovation and digital orientation as moderators

Although technological innovation is attached in the model as a moderator of the relationship between digital marketing and SME performance in general, this existence is only seen in small enterprises The result gives a message that by embracing technological advancements, small enterprises can reach a wider audience, engage with customers more efficiently, and drive business growth through digital marketing initiatives In addition, digital orientation was found to be a moderator between digital marketing and firm performance, however, this is seen clearly in micro and small enterprises This finding is a message that understanding the significance of digital orientation in this context sheds light on how micro and small enterprises can harness the power of digital marketing strategies to drive growth and success By aligning their organizational mindset with digital advancements, these businesses can unlock new opportunities for innovation, customer engagement, and competitive advantage in today's rapidly evolving marketplace.

In terms of digital orientation attached in the research model as the moderator between technological innovation and firm performance, the result shows that small enterprises prioritize digital orientation alongside technological innovation are more likely to experience enhanced firm performance This means the digital orientation of small enterprises plays a crucial role as a moderator between technological innovation and small enterprises’ performance (H6) Effectiveness of digital orientation is depended on advanced digital technologies, such as: (i) The integration of cloud computing technology allows SMEs to access powerful computing resources without the need for large upfront investments This scalability enables them to adapt quickly to changing market demands and improve operational efficiency; (ii) Advanced robotics and progressive manufacturing technologies such as 3D printing are streamlining production processes, reducing costs, and enhancing product customization capabilities for small firms These tools empower those small businesses to compete with larger counterparts on a global scale; (iii) Augmented reality (AR) is transforming customer experiences by blending digital information with the physical world SMEs can leverage AR technology to create immersive marketing campaigns, enhance product demonstrations, and provide interactive customer support; (iv) Modeling techniques coupled with the Internet of Things (IoT) enable SMEs to optimize resource allocation,predict maintenance needs, and improve overall operational performance These data- driven insights empower businesses to make informed decisions that drive growth and sustainability; (v) Cybersecurity remains a critical concern for SMEs as they embrace digital transformation Implementing robust security measures is essential to safeguard sensitive data, protect against cyber threats, and build trust with customers in an increasingly connected world; (vi) Big data applications offer valuable insights into consumer behavior, market trends, and operational performance for SMEs By harnessing the power of data analytics, businesses can make strategic decisions that drive innovation and competitive advantage in their respective industries; (vii) System integration plays a vital role in ensuring seamless connectivity between different technological components within an organization By effectively integrating diverse systems, SMEs can enhance collaboration among teams, streamline processes, and improve overall productivity Shortly, the digital orientation moderating technological innovation on small enterprises presents immense opportunities for growth and success.

By embracing these transformative technologies strategically and thoughtfully integrating them into their operations, small enterprises can unlock new possibilities for efficiency, competitiveness, and sustainable growth in today's dynamic business landscape.

It is crucial for employees in micro-enterprises to possess strong digital skills to effectively influence digital marketing strategies The ability of employees to navigate the digital landscape can significantly impact the success of marketing efforts in reaching target audiences and driving engagement Moreover, the level of digital orientation within these enterprises plays a pivotal role in determining sales revenue and overall productivity A strong emphasis on leveraging digital tools and platforms can lead to increased efficiency, streamlined processes, and enhanced customer reach. Additionally, digital skills also play an important role in moderating the impact of digital orientation on firm performance, however this result is only applied to small and medium enterprises.

In conclusion, the digital skills of employees serve as a moderator that influences the effectiveness of digital marketing initiatives within micro-enterprises, also being moderator that influences the relationship between digital orientation and the performance of small and medium enterprises It is imperative for businesses to prioritize continuous learning and development in this area to stay competitive in today's increasingly digitized business environment The result also provides demographic information of entrepreneurs, which entrepreneur's education plays a crucial role in the success of small and medium enterprises By equipping themselves with digital technology skills, entrepreneurs can enhance their sales and productivity significantly That means that with the right skills and education, entrepreneurs can leverage digital technologies to optimize their operations, improve customer engagement, and boost overall efficiency.

Novelty of research

Digital marketing has a notably good impact on various business levels, such as micro, small, and medium enterprises Small and medium firms give more thought to technological innovation This discovery provides evidence to support the claims made by Falahat et al (2020) regarding the effectiveness of digital marketing and technology innovation for small and medium-sized enterprises in developing markets Furthermore, digital marketing involves investing in a portfolio that includes social media, e- commerce, CRM, and Chatbot AI This expands upon the reasons presented by Abdelkader (2023), Dimitrios et al (2023), Kanaan et al (2023), Masrianto et al. (2022), and Su et al (2023).

Technological innovation is vital for small and medium enterprises, but it primarily enhances digital marketing's impact on the sales revenue and productivity of small enterprises Technological innovation refers to the innovation of products or services, manufacturing processes, and research and development activities (Azar & Ciabuschi, 2017; Omri, 2020; Moen et al., 2018; Wang & Chung, 2020), leading to changes in corporate strategies The availability of digital technology resources in a firm drives technical innovation, which in turn boosts digital marketing in small enterprises This is a new point of the dissertation and fills the gap of digital marketing in small enterprises and the concepts mentioned in the traditional marketing theory.

The finding brings a real picture of what digital orientation significantly contributes to achievements of SMEs However, both micro and small enterprises are leveraging the potential of digital orientation to engage with customers on a deeper level, streamline operations, and drive growth as digital orientation becomes an increasingly vital component for the success of businesses This finding contributes to the extension of the behavioral theory of firm of Cyert & March (1963), which the behavior of the firm not only anticipate the pricing and business stategies, but also applies digital orientation based on resources of digital technology to adapt actual situation of digital era The role of digital orientation is highly significant, because it is found to moderate the impact of digital marketing on sales revenue and productivity of micro and small enterprises This result is also academic contribtuion to the theory of RBV, which SMEs do not hesitate to employ the resources vailable of information technology to exploit marketing metrics It is also discovered that digital orientation exists to control the relationship between technical innovation and the performance of small businesses Furthermore, this discovery expands the scholarly contribution to the RBV theory, which small enterprises’ investment innovate products, process, and &D endeavors, their implementation must engage in digital technological resources available.

Independently, digital skills of employees are seriously considered by small and medium enterprises This contributes to the theory of RVB about digital capacity that has a strong commitment to drive growth and innovation of firm This finding is a reminder for SMEs thinking of investing the training program to upskill employees, because this can lead to increase productivity, efficiency, and overall business success (Laar et al., 2019) Furthermore, embracing digital tools and technologies within SMEs can streamline processes, enhance communication, and improve customer experiences. Employees who are proficient in using these tools can contribute to a more agile and responsive business environment In conclusion, giving serious consideration to the digital skills of employees in SMEs is not just an urgent strategy but a necessity for future-proofing the business and ensuring long-term sustainability By prioritizing digital skill development, companies can position themselves for continued growth and success in today's digitally driven world Moreover, improving digital skills within a firm can lead to increased efficiency and productivity Employees who are proficient in digital tools and technologies can streamline processes, automate tasks, and adapt quickly to changing market trends.

Overall, the dissertation successfully fulfills the research aims and presents intriguing findings The latest findings are concisely presented in table 5.1 Each point in the study presents different findings when compared to earlier research and makes an important contribution to academic perception.

Table 5.1: New points found and contributions

Effectiveness of DM existed in SMEs DM involved in a portfolio of social media, e- commerce, CRM, and Chatbot

Findings as extension of Abdelkader (2023), Dimitrios et al. (2023), Kanaan et al (2023), Masrianto et al (2022), and Su et al (2023).

Vital for small and medium enterprises TI strengthens DM’s impact on sales and productivity of small enterprises

Findings as extension of Azar & Ciabuschi (2017), Omri (2020), Moen et al (2018), and Wang & Chung (2020)

-Positive contribution to sales and productivity of micro and small enterprises

-Moderating the impact of DM on sales and productivity of micro and small enterprise

-Finding contributing to the extension of the behavioral theory of firm of Cyert & March (1963)

-Finding is academic contribution to the theory of RBV SMEs do not hesitate to use the resources of

IT to exploit marketing metrics.

Digital skills of employees (DS)

-Seriously considered by small and medium enterprises

-DS moderates DM’s impact on sales and productivity of small and medium enterprises

-Contributing to the theory ofRBV, SMEs use IT resources to improve digital skills of employees

Theoretical contribution

The dissertation that digital technology resources play a crucial role in supporting small and medium enterprises (SMEs) towards digital orientation and marketing is a compelling argument within the Resource-Based View (RBV) theory By recognizing the value of these resources, SMEs can leverage them to enhance their digital presence, competitiveness, and overall success in the contemporary business landscape. Currently, SMEs are increasingly realizing the importance of adopting digital technologies to stay relevant and competitive These resources serve as enablers for SMEs to not only establish their online presence but also effectively engage with their target audience through various digital marketing channels By embracing digital technology resources, SMEs can streamline their operations, improve customer experiences, and expand their market reach This transformation towards a more digitally oriented approach empowers SMEs to adapt to changing consumer behaviors and market trends efficiently.

Furthermore, the utilization of digital technology resources enables SMEs to gather valuable insights through data analytics, optimize their marketing strategies, and create personalized experiences for their customers This data-driven approach enhances decision-making processes and helps SMEs tailor their offerings to meet evolving consumer demands effectively Shortly, the argument that digital technology resources are instrumental in supporting SMEs towards digital orientation and marketing aligns with the core principles of RBV theory By harnessing these resources effectively, SMEs can unlock new opportunities for growth, innovation, and sustainable success in an increasingly digitized business environment.

The results indicate that employee digital abilities are a more prominent indicator in small and medium firms The results have provided a clearer understanding of how digital skills are defined in small and medium-sized firms in emerging countries likeVietnam This contributes academically to the RBV theory by emphasizing the importance of digital resources and skills This means when SMEs have effective digital technology resources, they prioritize digital orientation to improve sales revenue and productivity To do that employees’ digital skills must possess a range of digital including basic information technology, automation technology, data analytics, cybersecurity, support system applications, and collaboration tools.

Managerial implication

The dissertation provides a broad overview of how SMEs might use digital technology resources to increase productivity and sales According to size disparities of firms, micro, small, and medium-sized enterprises are all fully interested in using resources available of digital information technology to improve their business With the findings explored, some managerial implications are recommended as follows.

First, SMEs have significant changes in digitalization, it generates opportunities for SMEs to develop social media, e-commerce, Chabot AI, and CRM As found, these activities defined as digital marketing cause an increase in sales and productivity This is consistent with Abdelkader (2023) and Kanaan et al (2023) So, to capitalize on the benefits of digital marketing, entrepreneurs should consider investing in comprehensive training programs for their teams By equipping employees with the necessary skills and knowledge to navigate the digital landscape effectively, businesses can maximize their online presence and reach a wider audience Furthermore, entrepreneurs should prioritize data analysis and interpretation to make informed decisions about their digital marketing efforts By closely monitoring key performance indicators and consumer behavior trends, businesses can tailor their strategies to optimize sales conversions and improve overall productivity To the government, supporting SMEs’ business in the digital era must be seriously considered, which training programs are necessary to harness the power of digital marketing In addition, the government also pays attention to investing in education initiatives focused on digital skills development to improve digital capability of employees in approaching social media, E-commerce, and Chabot.

Second, once digital orientation is based on digital technology resources, both micro and small enterprises have a successful revolution in the way doing business As Nasiri et al (2022) mention digital orientation not only contributes to sustainable innovation of small business, but also maintains the position of firm in the market place.

So, entrepreneurs need to be familiar with digitalization to serve business To do that,entrepreneurs need to plan a typical budget to train employees on digital tools and optimizing processes through automation The government should play a crucial role in supporting the digital transformation by providing incentives for businesses to invest digital technologies, offering training programs to upskill the workforce, and creating a conducive regulatory environment for e-commerce activities.

Third, technological innovation plays a crucial role in enhancing the performance of SMEs, which is found in this study One of the key managerial implications of technological innovation for SMEs is the ability to automate routine tasks, freeing up valuable time for business owners to focus on strategic decision-making and growth opportunities This automation can lead to increased productivity and cost savings, ultimately boosting overall performance Moreover, technological innovations such as product innovation, process production improvement and R&D activities enable SMEs to better meet their target audience, personalize marketing strategies, and enhance customer engagement This personalized approach is essential in today's digital marketing where customers expect tailored experiences from brands In addition, technological innovation serves as a powerful moderator that influences digital marketing strategies and overall performance for SMEs By embracing these advancements and integrating them into their operations, SMEs can drive growth, improve competitiveness, and thrive in an increasingly digital world.

Fourth, concerning digital orientation needs a good combination with technological innovation Entrepreneurs play a crucial role in embracing these advancements to stay in the marketplace They should prioritize upskilling their employees to effectively utilize new technologies, implementing digital tools for streamlined operations, and fostering a culture of innovation within the organization.

To the government, the local authority can also play a supportive role by providing incentives for SMEs to invest in technology, offering training programs to bridge the digital skills gap, and creating policies that promote a conducive environment for technological adoption By working together, entrepreneurs and governments can empower SMEs to thrive in an increasingly digital world, driving growth and success for all stakeholders involved.

Fifth, having digital skills of employees during the digital era is not just an advantage, but a necessity With the moderating role of digital skills is found, SMEs should embrace digital technologies and equip their employees with the right digital for the long run Entrepreneurs need to understand that having a digitally savvy workforce can be a challenge in managing However, they must pay attention to that and consider investing in training and upskilling programs and must ensure that their employees are equipped to navigate the digital world effectively.

Moreover, the supportive role of the government must be involved because the government plays a crucial role in supporting SMEs in this digital transformation journey It can provide incentives, grants, and resources to help entrepreneurs invest in digital skills development for their employees By fostering a supportive environment for SMEs to thrive digitally, governments can contribute to economic growth and innovation Because the relationship between digital orientation and SME success is moderated by the level of digital skills within the organization Entrepreneurs should prioritize investing in their employees' digital capabilities, while governments should provide the necessary support to facilitate this transition Together, they can pave the way for a more digitally resilient future for small and medium enterprises.

Limitation and further research

Digital marketing of SMEs has revolutionized the way businesses connect with their customers (Taiminen & Karjaluoto, 2015), also it is leveraged by technological innovations to reach wider audiences While the digital landscape continues to evolve, SMEs perceived a strong digital orientation to lead the competitive market (Kindermann et al., 2021) Although the factors of digital marketing, technological innovation and digital orientation are concerned in the dissertation, in which the quantitative approach based on statistical models with the large sample is considered. However, the potential issue of bias can be happened, due to potential effects of endogeneity To avoid the potential bias of endogeneity, the the robust estimation techniques, e.g IV/GMM or 2SLS can be employed.

The dissertation only considers SMEs in the emerging market So, this is not avoided by questions with respect to how these three factors (digital marketing, digital orientation, and technological innovation) happen to firms in other markets Another limitation is that the dissertation only results how employees’ digital skill moderate impacts of digital marketing, technological innovation, and digital orientation on SME performance, while the digital skills capability of entrepreneurs is not involved in the research model Impacts of digital marketing, technological innovation, and digital orientation SMEs on sales revenues and productivity of SMEs are confirmed, but their impacts on sustainable development are not found This is considered as further research, in which sustainable development is depended on digital marketing, technological innovation, and digital orientation.

Abdelkader, O A (2023) ChatGPT’s influence on customer experience in digital marketing: Investigating the moderating roles Heliyon, 9(8), e18770 https://doi.org/10.1016/j.heliyon.2023.e18770

Aksoy, H (2017) How do innovation culture, marketing innovation and product innovation affect the market performance of small and medium-sized enterprises (SMEs)? Technology in Society, 51, 133–141 https://doi.org/10.1016/j.techsoc.2017.08.005

Alraja, M N., Imran, R., Khashab, B M., & Shah, M (2022) Technological

Innovation, Sustainable Green Practices and SMEs Sustainable Performance in Times of Crisis (COVID-19 pandemic) Information Systems Frontiers, 24(4), 1081–1105 https://doi.org/10.1007/s10796-022-10250-z

Ancona, D G., & Caldwell, D F (1987) Management issues facing new-product teams in high-technology companies In Advances in Industrial and Labor

Anderson, E., Lodish, L M., & Weitz, B A (1987) American Marketing Association Resource Allocation Behavior in Conventional Channels Source Journal of

Ardito, L., Raby, S., Albino, V., & Bertoldi, B (2021) The duality of digital and environmental orientations in the context of SMEs: Implications for innovation performance Journal of Business Research, 123, 44–56 https://doi.org/10.1016/j.jbusres.2020.09.022

Argote, L., & Greve, H R (2007) A Behavioral Theory of the Firm - 40 Years and Counting : Introduction and Impact Organization Science, 18(3), 337–349.

Astuti, E S., Sanawiri, B., & Iqbal, M (2020) Attributes of innovation, digital technology and their impact on SME performance in indonesia International

Journal of Entrepreneurship, 24(1), 1–14 https://doi.org/10.6084/m9.figshare.12228692

Avelar, S., Borges-Tiago, T., Almeida, A., & Tiago, F (2024) Confluence of sustainable entrepreneurship, innovation, and digitalization in SMEs Journal of

Business Research, 170(February 2023) https://doi.org/10.1016/j.jbusres.2023.114346

Aw, B Y (2002) Productivity dynamics of small and medium enterprises in Taiwan.

Small Business Economics, 18(1–3), 69–84 https://doi.org/10.1023/A:1015125827427

Azar, G., & Ciabuschi, F (2017) Organizational innovation, technological innovation, and export performance: The effects of innovation radicalness and extensiveness International Business Review, 26(2), 324–336 https://doi.org/10.1016/j.ibusrev.2016.09.002

Bala, M., & Verma, D (2018) A Critical Review of Digital Marketing Paper Type: - Review and Viewpoint International Journal of Management, IT & Engineering,

Baláž, V., Jeck, T., & Balog, M (2023) Firm performance over innovation cycle: evidence from a small European economy Journal of Innovation and

Barca, M (2003) The Theory of the Growth of the Firm (1st Editio) Sharpe https://doi.org/10.4324/9781315257068-16

Barnes, D., Clear, F., Dyerson, R., Harindranath, G., Harris, L., & Rae, A (2012). Web 2.0 and micro-businesses: an exploratory investigation Journal of Small Business and Enterprise Development, 29(4), 687–711.

Barney, J B (1991) Firm resources and sustained competitive advantage Journal of

Beard, C., & Easingwood, C (1996) New product launch: Marketing action and launch tactics for high-technology products Industrial Marketing Management,

Bell, M L., & Emory, C W (1971) The Faltering Marketing Concept Journal of

Bendig, D., Schulz, C., Theis, L., & Raff, S (2023) Digital orientation and environmental performance in times of technological change Technological

Forecasting and Social Change, 188, 122272 https://doi.org/10.1016/j.techfore.2022.122272

Bhattacharya, C B., & Sen, S (2003) Consumer-company identification: A framework for understanding consumers’ relationships with companies Journal of Marketing, 67, 76–88 https://doi.org/10.1509/jmkg.67.2.76.18609

Binh, T Van, Thy, N G., Khoa, H D., Vu, P M., & Thong, N D (2022).

Association of innovation and entrepreneurial orientation on SMEs’ performance: The case of Soc Trang province (Vietnam) International Journal of Management and Sustainability., 11(2), 92–102 https://doi.org/10.18488/11.v11i2.3051

Binh, T Van, & Tien, H V (2019) Corporate social responsibility and performance of SMEs in Ho Chi Minh City (Vietnam) International Journal of Management and Enterprise Development, 18(4), 277–292 https://doi.org/10.1504/ijmed.2019.10022922

Birkinshaw, J., Hamel, G H., & Mol, M J (2008) Management Innovation.

Academy of Management Review, 33(4), 825–845 https://doi.org/10.3166/rfg.2017.00119

Bokek-cohen, Y (2018) Conceptualizing employees ’ digital skills as signals delivered to employers International Journal of Organization Theory and

Behavior, 21(1), 17–27 https://doi.org/10.1108/IJOTB-03-2018-003

Bonilla, C A., Sepulveda, J., & Carvajal, M (2010) Family ownership and firm performance in Chile: A note on Martinez et al.’s evidence Family Business

Bruce, E., Shurong, Z., Ying, D., Yaqi, M., Amoah, J., & Egala, S B (2023) The Effect of Digital Marketing Adoption on SMEs Sustainable Growth : Empirical Evidence from Ghana Sustainability, 15, 4760.

Carfora, A., Passaro, R., Scandurra, G., & Thomas, A (2022) Do determinants of eco-innovations vary? An investigation of innovative SMEs through a quantile regression approach Journal of Cleaner Production, 370(August), 133475 https://doi.org/10.1016/j.jclepro.2022.133475

Chandler, A D (1962) Strategy and Structure: Chapters in the History of the

American In MIT Press Cambridge, MA: MIT Press.

Chavez, R., Yu, W., Sadiq Jajja, M S., Lecuna, A., & Fynes, B (2020) Can entrepreneurial orientation improve sustainable development through leveraging internal lean practices? Business Strategy and the Environment, 29(6), 2211–

Child, J (1974) Managerial and Organizational Factors Part I Journal of

Chong, S., & Pervan, G (2007) Factors influencing the extent of deployment of electronic commerce for small-and medium-sized enterprises Journal of

Electronic Commerce in Organizations, 5(1), 1–29 https://doi.org/10.4018/jeco.2007010101

Chu, Y., Chi, M., Wang, W., & Luo, B (2019) The impact of information technology capabilities of manufacturing enterprises on innovation performance: Evidences from SEM and fsQCA Sustainability (Switzerland), 11(21), 1–17 https://doi.org/ 10.3390/su11215946

Ciarli, T., Kenney, M., Massini, S., & Piscitello, L (2021) Digital technologies, innovation, and skills: Emerging trajectories and challenges Research Policy,

Coase, R H (1937) The nature of the firm Economica, 4, 386–405 https://doi.org/10.1016/S0039-6109(16)37642-3

Cohen, M D., March, J G., & Olsen, J P (1972) A Garbage Can Model of

Organizational Choice Administrative Science Quarterly, 17(1), 1–25 https://doi.org/10.2307/2392088

Collis, D J., & Montgomery, C A (1995) Competing on resources: Strategy in the 1990s Harvard Business Review, 73(4), 118–128.

Conner, K R., & Prahalad, C K (1996) A Resource-based Theory of the Firm: Knowledge Versus Opportunism Organization Science, 7(5), 477–501 https://doi.org/10.1287/orsc.7.5.477

Covin, J G., & Lumpkin, G T (2011) Entrepreneurial orientation theory and research: Reflections on a needed construct Entrepreneurship: Theory and

Cyert, R M., & March, J G (1963) A behavioral theory of the firm Prentice

Dahiya, R., & Gayatri, G (2018) A Research Paper on Digital Marketing

Communication and Consumer Buying Decision Process: An Empirical Study in the Indian Passenger Car Market Journal of Global Marketing, 31(2), 73–95 https://doi.org/10.1080/08911762.2017.1365991

Damanpour, F (1996) Organizational complexity and innovation: Developing and testing multiple contingency models Management Science, 42(5) https://doi.org/ 10.1287/mnsc.42.5.693

Damanpour, F., & Evan, W M (1984) Organizational Innovation and Performance: The Problem of “Organizational Lag.” Administrative Science Quarterly, 29(3), 392–409.

Damanpour, F., Walker, R M., & Avellaneda, C N (2009) Combinative effects of innovation types and organizational Performance: A longitudinal study of service organizations Journal of Management Studies, 46(4), 650–675 https://doi.org/10.1111/j.1467-6486.2008.00814.x

Daud, I., Nurjannah, D., Mohyi, A., Ambarwati, T., Cahyono, Y., Haryoko, A D E., Handoko, A L., Putra, R S., Wijoyo, H., Ari-Yanto, A., & Jihadi, M (2022). The effect of digital marketing, digital finance and digital payment on finance performance of indonesian smes International Journal of Data and Network

Science, 6(1), 37–44 https://doi.org/10.5267/J.IJDNS.2021.10.006

Dimitrios, B., Ioannis, R., Angelos, N., & Nikolaos, T (2023) Digital marketing: The case of digital marketing strategies on luxurious hotels Procedia Computer

Science, 219, 688–696 https://doi.org/10.1016/j.procs.2023.01.340

Djakasaputra, A., Wijaya, O Y A., Utama, A S., Yohana, C., Romadhoni, B., & Fahlevi, M (2021) Empirical study of indonesian SMEs sales performance in digital era: The role of quality service and digital marketing International

Journal of Data and Network Science, 5(3), 303–310 https://doi.org/10.5267/j.ijdns.2021.6.003

Doms, M., Lewis, E., & Robb, A (2010) Local labor force education, new business characteristics, and firm performance Journal of Urban Economics, 67(1), 61–

Duncan, T., & Moriarty, S E (1998) Marketing for model managing relationships.

Elg, U., Ghauri, P N., Child, J., & Collinson, S (2017) MNE microfoundations and routines for building a legitimate and sustainable position in emerging markets

Journal of Organizational Behavior, 38(9), 1320–1337 https://doi.org/10.1002/job.2214

Elia, S., Giuffrida, M., Mariani, M M., & Bresciani, S (2021) Resources and digital export: An RBV perspective on the role of digital technologies and capabilities in cross-border e-commerce Journal of Business Research, 132(April), 158–169 https://doi.org/10.1016/j.jbusres.2021.04.010

Eriksson, L T., Hultman, J., & Naldi, L (2008) Small business e-commerce development in Sweden - An empirical survey Journal of Small Business and

Enterprise Development, 15(3), 555–570 https://doi.org/10.1108/14626000810892346

Etgar, M (2012) Vertical Efficiency Marketing Systems Journal of Marketing,

Evans, D S (1987) The Relationship Between Firm Growth , Size , and Age :

Estimates for 100 Manufacturing Industries The Journal of Industrial

Ezzi, F., & Jarboui, A (2016) Does innovation strategy affect financial, social and environmental performance? Journal of Economics, Finance and Administrative

Science, 21(40), 14–24 https://doi.org/10.1016/j.jefas.2016.03.001

Falahat, M., Ramayah, T., Soto-Acosta, P., & Lee, Y Y (2020) SMEs internationalization: The role of product innovation, market intelligence, pricing and marketing communication capabilities as drivers of SMEs’ international performance Technological Forecasting and Social Change, 152, 119908 https:// doi.org/10.1016/j.techfore.2020.119908

Fan, X., Zhao, S., Zhang, B., Wang, S., & Shao, D (2023) The impact of corporate digital strategic orientation on innovation output Heliyon, 9(5), e16371 https://doi.org/10.1016/j.heliyon.2023.e16371

Foss, N J (2005) Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources In Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources Oxford:

Oxford University Press https://doi.org/10.1093/0199240647.001.0001

Frazier, G L., & Summers, J O (1984) Interfirm Influence Strategies and Their Application within Distribution Channels Journal of Marketing, 48(3), 43–55 https://doi.org/10.2307/1251328

Galvão, M B., de Carvalho, R C., Oliveira, L A B de, & Medeiros, D D de (2018) Customer loyalty approach based on CRM for SMEs Journal of Business and Industrial Marketing, 33(5), 706–716 https://doi.org/10.1108/JBIM-07-

Ganotakis, P., Angelidou, S., Saridakis, C., Piperopoulos, P., & Dindial, M (2023). Innovation, digital technologies, and sales growth during exogenous shocks

Technological Forecasting and Social Change, 193, 122656 https://doi.org/10.1016/j.techfore.2023.122656

Gao, S., Xu, K., & Yang, J (2008) Managerial ties, absorptive capacity, and innovation Asia Pacific Journal of Management, 25(3), 395–412 https:// doi.org/10.1007/s10490-008-9096-1

Garzella, S., Fiorentino, R., Caputo, A., & Lardo, A (2021) Business model innovation in SMEs: the role of boundaries in the digital era Technology Analysis and Strategic Management, 33(1), 31–43 https://doi.org/10.1080/09537325.2020.1787374

Gatignon, H., & Xuereb, J.-M (1997) Strategic Orientation of the Firm and New Product Development Journal of Marketing Research, 34(1), 77–90.

Gilmore, A., Carson, D., & O’Donnell, A (2004) Small business owner-managers and their attitude to risk Marketing Intelligence & Planning, 22(3), 349–360. https://doi.org/10.1108/02634500410536920

Greve, H R (2011) Performance , Aspirations , and Risky Change Organizational.

Griffin, J J., & Mahon, J F (1997) The corporate social performance and corporate financial performance debate: Twenty-five years for incomparable research.

Business & Society, 36(1), 5–31 https://doi.org/10.1177/000765039703600102

Hair, J F., Black, W C., Babin, B J., & Anderson, R E (2017) Multivariate Data

Analysis (7th Editio) Pearson Education, Upper Saddle River.

Hall, B H (1987) The Relationship Between Firm Size and Firm Growth in the US Manufacturing Sector The Journal of Industrial Economics, 35(4), 583–606 https://doi.org/10.2307/2098589

Hambrick, & Mason (1984) Upper Echelons : of Reflection The Its Organization as reflection of its Top managers Management, 9(2), 193–206 http://www.jstor.org/ stable/258434

Hamel, G (2006) The why, what, and how of management innovation Harvard

Hart, P E., & Prais, S J (1956) The Analysis of Business Concentration: A

Statistical Approach Journal of the Royal Statistical Society Series A (General),

Hawaldar, I T., Ullal, M S., Sarea, A., Mathukutti, R T., & Joseph, N (2022) The Study on Digital Marketing Influences on Sales for B2B Start-Ups in South Asia

Journal of Open Innovation: Technology, Market, and Complexity, 8(1), 23 https://doi.org/10.3390/joitmc8010023

Hawkins, C J (1973) Theory of The Firm Macmillan.

Heredia, J., Castillo-Vergara, M., Geldes, C., Carbajal Gamarra, F M., Flores, A., & Heredia, W (2022) How do digital capabilities affect firm performance? The mediating role of technological capabilities in the “new normal.” Journal of

Innovation and Knowledge, 7(2), 100171 https://doi.org/10.1016/j.jik.2022.100171

Hirvonen, J., & Majuri, M (2020) Digital capabilities in manufacturing SMEs.

Procedia Manufacturing, 51(2019), 1283–1289 https://doi.org/10.1016/j.promfg.2020.10.179

Hoskisson, R E., Eden, L., Lau, C M., & Wright, M (2000) Strategy in emerging economics Academy of Management Journal, 43(3), 249–267.

Huggins, R., & Thompson, P (2013) A network-based view of regional growth.

Journal of Economic Geography, 14(3), 511–545 https://doi.org/10.1093/jeg/lbt012 İpek, İ (2018) The Resource-Based View within the Export Context: An Integrative Review of Empirical Studies Journal of Global Marketing, 31(3), 157–179 https://doi.org/10.1080/08911762.2017.1328630

Ivanov, A E (2012) The Internet‘s Impact on Integrated Marketing Communication.

Procedia Economics and Finance, 3(12), 536–542 https://doi.org/10.1016/s2212-5671(12)00192-x

Johansson, B., & Lửửf, H (2015) Productivity, networks and knowledge flows

Economics of Innovation and New Technology, 24(December 2014), 1–4 https://doi.org/10.1080/10438599.2014.897862

Jones, G R (2010) Organizational theory, design, and change In Pearson Education.

Kanaan, K., Abuhjeeleh, M., Darabseh, F., Taha, O., & Aljawarneh, N M (2023). How digital marketing and innovative performance contribute to hotel restaurant revenue growth: The mediating role of knowledge sharing Cogent Social

Kannan, P K., & Li, H “Alice.” (2017) Digital marketing: A framework, review and research agenda International Journal of Research in Marketing, 34(1), 22–45 https://doi.org/10.1016/j.ijresmar.2016.11.006

Kaplan, A M (2015) Social Media, the Digital Revolution, and the Business of Media JMM International Journal on Media Management, 17(4), 197–199. https://doi.org/10.1080/14241277.2015.1120014

Kaplan, A M., & Haenlein, M (2010) Users of the world, unite! The challenges and opportunities of Social Media Business Horizons, 53(1), 59–68 https://doi.org/10.1016/j.bushor.2009.09.003

Katsikeas, C S., Morgan, N A., Leonidou, L C., Tomas, M., & Huit, M (2016). Assessing Performance Outcomes in Marketing Constantine Journal of

Kaynak, E., Tatoglu, E., & Kula, V (2005) An analysis of the factors affecting the adoption of electronic commerce by SMEs: Evidence from an emerging market.

International Marketing Review, 22(6), 623–640 https://doi.org/10.1108/02651330510630258

Kaynak, E., & Zhou, L (2010) Special issue on brand equity, branding, and marketing communications in emerging markets Journal of Global Marketing,

Keke, M E (2022) The use of digital marketing in information transport in social media: The example of Turkish companies Transportation Research Procedia,

Khan, H (2020) Is marketing agility important for emerging market firms in advanced markets? International Business Review, 29(5), 101733 https://doi.org/10.1016/j.ibusrev.2020.101733

Khin, S., & Ho, T C F (2019) Digital technology, digital capability and organizational performance: A mediating role of digital innovation International

Journal of Innovation Science, 11(2), 177–195 https://doi.org/10.1108/IJIS-08-

Kindermann, B., Beutel, S., Garcia de Lomana, G., Strese, S., Bendig, D., & Brettel,

M (2021) Digital orientation: Conceptualization and operationalization of a new strategic orientation European Management Journal, 39(5), 645–657 https://doi.org/10.1016/j.emj.2020.10.009

Koellinger, P (2008) The relationship between technology, innovation, and firm performance-Empirical evidence from e-business in Europe Research Policy,

Kotler, P (1998) A generic concept of marketing Marketing Management, 7(3), 48 https://doi.org/ 10.1177/002224297203600209

Kotler, P., & Keller, K L (2006) Marketing Mangement (12th ed) In USA: Pearson

Kuusisto, M (2017) Organizational effects of digitalization International Journal of

Laar, E V., Deursen, A J A M Van, Dijk, J A G M Van, & De Haan, J (2019)

Determinants of 21st-century digital skills: A large-scale survey among working professionals Computers in Human Behavior, 100(June), 93–104 https://doi.org/

Levinthal, D., & March, J G (1981) A model of adaptive organizational search.

Journal of Economic Behavior and Organization, 2(4), 307–333 https://doi.org/10.1016/0167-2681(81)90012-3

Liu, B., & Fu, Z (2011) Relationship between Strategic Orientation and

Organizational Performance in Born Global: A Critical Review International

Journal of Business and Management, 6(3), 109–115 https://doi.org/10.5539/ijbm.v6n3p109

Lohe, F W., & Calabrò, A (2017) Please do not disturb! Differentiating board tasks in family and non-family firms during financial distress Scandinavian Journal of

Management, 33(1), 36–49 https://doi.org/10.1016/j.scaman.2017.01.001

Lucia-Palacios, L., Bordonaba-Juste, V., Polo-Redondo, Y., & Grünhagen, M (2014). E-business implementation and performance: Analysis of mediating factors.

Internet Research, 24(2), 223–245 https://doi.org/10.1108/IntR-09-2012-0195

MacMillan, I C., & Day, D L (1987) Corporate ventures into industrial markets: Dynamics of aggressive entry Journal of Business Venturing, 2(1) https://doi.org/10.1016/0883-9026(87)90017-6

Malesios, C., De, D., Moursellas, A., Dey, P K., & Evangelinos, K (2021).

Sustainability performance analysis of small and medium sized enterprises: Criteria, methods and framework Socio-Economic Planning Sciences, 75(June 2019), 100993 https://doi.org/10.1016/j.seps.2020.100993

Mandal, K., & Banerjee, S (2017) An Empirical Comparison between Societal Expenditure and Marketing Expenditure on Bank’s Performance Global Business

Mansfield, E (1962) Entry, Gibrat’s Law, Innovation and the Growth of Firms.

March, J G., & Simon, H A (1958) Organizations Wiley, New York.

Marhraoui, M A (2023) Digital skills for project managers: A systematic literature review Procedia Computer Science, 219, 1591–1598 https://doi.org/10.1016/j.procs.2023.01.451

Martens, C D P., Lacerda, F M., Belfort, A C., & Freitas, H M R de (2016). Research on entrepreneurial orientation: current status and future agenda

International Journal of Entrepreneurial Behaviour and Research, 22(4), 556–

Martin, S L., & Javalgi, R R G (2016) Entrepreneurial orientation, marketing capabilities and performance: The Moderating role of Competitive Intensity on Latin American International New Ventures Journal of Business Research,

Masa’deh, R., Al-Henzab, J., Tarhini, A., & Obeidat, B Y (2018) The associations among market orientation, technology orientation, entrepreneurial orientation and organizational performance Benchmarking, 25(8), 3117–3142 https://doi.org/10.1108/BIJ-02-2017-0024

Masrianto, A., Hartoyo, H., Hubeis, A V S., & Hasanah, N (2022) Digital

Marketing Utilization Index for Evaluating and Improving Company Digital Marketing Capability Journal of Open Innovation: Technology, Market, and

Complexity, 8(3), 153 https://doi.org/10.3390/joitmc8030153

Medrano, N., & Olarte-Pascual, C (2016) The effects of the crisis on marketing innovation: an application for Spain Journal of Business and Industrial

Marketing, 31(3), 404–417 https://doi.org/10.1108/JBIM-02-2013-0048

Menz, M., Kunisch, S., Birkinshaw, J., Collis, D J., Foss, N J., Hoskisson, R E., & Prescott, J E (2021) Corporate Strategy and the Theory of the Firm in the

Digital Age Journal of Management Studies, 58(7), 1695–1720 https://doi.org/10.1111/joms.12760

Miller, D., & Friesen, P H (1982) Innovation in conservative and entrepreneurial firms: Two models of strategic momentum Strategic Management Journal, 3(1), 135–172 https://doi.org/10.1002/smj.4250030102

Mithani, M A (2017) Innovation and CSR — Do They Go Well Together? Long

Range Planning, 50(6), 699–711 https://doi.org/10.1016/j.lrp.2016.08.002

Moen, ỉ., Tvedten, T., & Wold, A (2018) Exploring the relationship between competition and innovation in Norwegian SMEs Cogent Business and

Mohamad, M R (2011) Determinants of small and medium enterprises performance in the Malaysian auto-parts industry African Journal of Business Management,

Mohr, J., & Nevin, J R (1990) Communication Strategies in Marketing Channels: A Theoretical Perspective Journal of Marketing, 54(4), 36 https://doi.org/10.2307/1251758

Morikawa, M (2010) Labor unions and productivity: An empirical analysis using Japanese firm-level data Labour Economics, 17(6), 1030–1037 https://doi.org/10.1016/j.labeco.2010.02.009

Mujeyi, K., Siziba, S., Sadomba, W Z., & Mutambara, J (2016) Technical efficiency of informal manufacturing sector enterprises: Evidence from the informal metal industry of Zimbabwe African Journal of Science, Technology, Innovation and

Nambisan, S., Wright, M., & Feldman, M (2019) The digital transformation of innovation and entrepreneurship: Progress, challenges and key themes Research

Policy, 48(8), 103773 https://doi.org/10.1016/j.respol.2019.03.018

Nasiri, M., Saunila, M., Rantala, T., & Ukko, J (2022) Sustainable innovation among small businesses: The role of digital orientation, the external environment, and company characteristics Sustainable Development, 30(4), 703–712 https://doi.org/10.1002/sd.2267

Nasiri, M., Saunila, M., & Ukko, J (2022) Digital orientation, digital maturity, and digital intensity: determinants of financial success in digital transformation settings International Journal of Operations and Production Management,

Nauhaus, S., Luger, J., & Raisch, S (2021) Strategic Decision Making in the Digital Age: Expert Sentiment and Corporate Capital Allocation Journal of Management

Studies, 58(7), 1933–1961 https://doi.org/10.1111/joms.12742

Nguyen, A T H., Nguyen, P V., & Do, H T S (2022) The effects of entrepreneurial orientation, social media, managerial ties on firm performance: evidence from vietnamese smes International Journal of Data and Network

Science, 6(1), 243–252 https://doi.org/10.5267/J.IJDNS.2021.9.004

Noyola-Medina, A M., Pinzón-Castro, S Y., & Maldonado-Guzmán, G (2018). Innovation and Digital Marketing Adoption in Mexican Small Business Journal of Management and Sustainability, 8(2), 18 https://doi.org/10.5539/jms.v8n2p18

Nuseir, M T., & Aljumah, A (2020) The role of digital marketing in business performance with the moderating effect of environment factors among SMEs of UAE International Journal of Innovation, Creativity and Change, 11(3), 310– 324.

Oduro, S., De Nisco, A., & Mainolfi, G (2023) Do digital technologies pay off? A meta-analytic review of the digital technologies/firm performance nexus.

Technovation, 128, 102836 https://doi.org/10.1016/j.technovation.2023.102836

Omri, A (2020) Technological innovation and sustainable development : Does the stage of development matter ? Environmental Impact Assessment Review, 83,

Paul, J (2020) Marketing in emerging markets: a review, theoretical synthesis and extension International Journal of Emerging Markets, 15(3), 446–468 https:// doi.org/10.1108/IJOEM-04-2017-0130

Pham, T T T., Nguyen, K S., Nguyen, H H., Nguyen, L T., & Vo, V X (2021) Dynamic entrepreneurship, planned innovation, and firm profitability: evidence from a Southeast Asian country Heliyon, 7(7), e07599 https://doi.org/10.1016/j.heliyon.2021.e07599

Pingali, S R., Singha, S., Arunachalam, S., & Pedada, K (2023) Digital readiness of small and medium enterprises in emerging markets: The construct, propositions, measurement, and implications Journal of Business Research, 164, 113973 https://doi.org/10.1016/j.jbusres.2023.113973

Pradhan, P., Nigam, D., & CK, T (2013) Digital marketing and SMEs: An identification of research gap via archives of past research Journal of Internet

Banking and Commerce, 23(1), 1–11 http://www.icommercecentral.com

Quinton, S., Canhoto, A., Molinillo, S., Pera, R., & Budhathoki, T (2018)

Conceptualising a digital orientation: antecedents of supporting SME performance in the digital economy Journal of Strategic Marketing, 26(5), 427–

Radicic, D., & Petković, S (2023) Impact of digitalization on technological innovations in small and medium-sized enterprises (SMEs) Technological

Forecasting and Social Change, 191, 122474 https://doi.org/10.1016/j.techfore.2023.122474

Rakshit, S., Islam, N., Mondal, S., & Paul, T (2022) An integrated social network marketing metric for business-to-business SMEs Journal of Business Research,

150(June), 73–88 https://doi.org/10.1016/j.jbusres.2022.06.006

Reijonen, H (2010) Do all SMEs practise same kind of marketing Journal of Small

Rodrigo, L., Pérez-Arechaederra, D., Palacios, M., & Romero, J (2022).

Organisational commitment in the digital social innovation context: does qualitative comparative analysis add information to linear regression?

Technological Forecasting and Social Change, 179(July 2021), 121613 https://doi.org/10.1016/j.techfore.2022.121613

Rosário, A M F T., & Cruz, R N (2019) Determinants of innovation in digital marketing Journal of Reviews on Global Economics, 8(June), 1722–1731 https://doi.org/10.6000/1929-7092.2019.08.154

Rosenbusch, N., Brinckmann, J., & Bausch, A (2011) Is innovation always beneficial? A meta-analysis of the relationship between innovation and performance in SMEs Journal of Business Venturing, 26(4), 441–457 https://doi.org/10.1016/j.jbusvent.2009.12.002

Rothkegel, S., Erakovic, L., & Shepherd, D (2006) Strategic Alliances between SMEs and Large Firms: An Exploration of the Dynamic Process Management

Salthouse, T A (2009) When does age-related cognitive decline begin?

Neurobiology of Aging, 30(4), 507–514 https://doi.org/10.1016/j.neurobiolaging.2008.09.023

Samli, A C., & Kaynak, E (1984) Marketing practices in less-development countries Journal of Business Research, 12(1), 5–18 https://doi.org/10.1016/0148-2963(84)90034-1

Sarsah, S A., Tian, H., Dogbe, C S K., Bamfo, B A., & Pomegbe, W W K (2020). Effect of entrepreneurial orientation on radical innovation performance among manufacturing SMEs: the mediating role of absorptive capacity Journal of

Strategy and Management, 13(4), 551–570 https://doi.org/10.1108/JSMA-03-

Saura, J R., Palos-Sanchez, P., & Herráez, B R (2020) Digital marketing for sustainable growth: Business models and online campaigns using sustainable strategies Sustainability (Switzerland), 12(3), 3–7 https://doi.org/10.3390/su12031003

Schumpeter, J A (1934) The Theory of Economic Development: An Inquiry into

Profits, Capital, Credit, Interest, and the Business Cycle Harvard University

Selamat, M A., & Windasari, N A (2021) Chatbot for SMEs: Integrating customer and business owner perspectives Technology in Society, 66, 101685 https://doi.org/10.1016/j.techsoc.2021.101685

Serna, D C M M., Guzman, G M., & Castro, S Y P (2013) The Relationship between Market Orientation and Innovation in Mexican Manufacturing SME’s

Advances in Management & Applied Economics, 3(5), 1792–7552.

Shideler, D., & Badasyan, N (2012) Broadband impact on small business growth in Kentucky Journal of Small Business and Enterprise Development, 19(4), 589–

Simon, H A (1947) Administrative behavior: A study of decision-making processes in administrative organizations New York, NY: Macmillan https://doi.org/10.2307/2144907

Simonen, J., & McCann, P (2008) Innovation, R&D cooperation and labor recruitment: Evidence from Finland Small Business Economics, 31(2), 181–194 https://doi.org/10.1007/s11187-007-9089-3

Sivakumar, C N K (1997) Emerging market conditionsand their impact on firstmover advantages International Marketing Review, 14, 461–485.

Smith, K T (2011) Digital marketing strategies that Millennials find appealing, motivating, or just annoying Journal of Strategic Marketing, 19(6), 489–499 https://doi.org/10.1080/0965254X.2011.581383

Sony, M., & Mekoth, N (2022) Employee adaptability skills for Industry 4 0 success : a road map Production & Manufacturing Research, 10(1), 24–41 https://doi.org/10.1080/21693277.2022.2035281

Su, J., Zhang, Y., & Wu, X (2023) How market pressures and organizational readiness drive digital marketing adoption strategies ’ evolution in small and medium enterprises Technological Forecasting & Social Change, 193, 122655 https://doi.org/10.1016/j.techfore.2023.122655

Subramaniam, M., & Venkatraman, N (2001) Determinants of transnational new product development capability: Testing the influence of transferring and deploying tacit overseas knowledge Strategic Management Journal https://doi.org/10.1002/smj.163

Sulistyo, H., & Siyamtinah (2016) Innovation capability of SMEs through entrepreneurship, marketing capability, relational capital and empowerment Asia

Pacific Management Review, 21(4), 196–203 https://doi.org/10.1016/j.apmrv.2016.02.002

Sultoni, M H., Sudarmiatin, Hermawan, A., & Sopiah (2022) Digital marketing, digital orientation, marketing capability, and information technology capability on marketing performance of Indonesian SMEs International Journal of Data and Network Science, 6(4), 1381–1388 https://doi.org/10.5267/j.ijdns.2022.5.013

Taiminen, H M., & Karjaluoto, H (2015) The usage of digital marketing channels in SMEs Journal of Small Business and Enterprise Development, 22(4), 633–651 https://doi.org/10.1108/JSBED-05-2013-0073

Tajeddini, K., Hussain, M., Gamage, T C., & Papastathopoulos, A (2024) Effects of resource orchestration, strategic information exchange capabilities, and digital orientation on innovation and performance of hotel supply chains International

Journal of Hospitality Management, 117, 103645 https://doi.org/10.1016/j.ijhm.2023.103645

Telukdarie, A., Dube, T., Matjuta, P., & Philbin, S (2023) The opportunities and challenges of digitalization for SME’s Procedia Computer Science, 217(2022),

Terziovski, M (2010a) Research notes and commentaries innovation practice and its performance implications in small and medium enterprises (SMEs) in the manufacturing sector: A resource-based view In Strategic Management Journal https://doi.org/10.1002/smj.841

Terziovski, M (2010b) Research notes and commentaries innovation practice and its performance implications in small and medium enterprises (SMEs) in the manufacturing sector: A resource-based view In Strategic Management Journal https://doi.org/10.1002/smj.841

Thaha, A R., Maulina, E., Alexandri, M B., Rahim Thaha, A., & Muftiadi, R A (2021) Digital Marketing and SMEs: A Systematic Mapping Study Library

Philosophy and Practice, 21, 2–19 https://digitalcommons.unl.edu/libphilprac

Thornhill, S (2006) Knowledge, innovation and firm performance in high- and low- technology regimes Journal of Business Venturing, 21(5), 687–703 https://doi.org/10.1016/j.jbusvent.2005.06.001

Trainor, K J., Rapp, A., Beitelspacher, L S., & Schillewaert, N (2011) Integrating information technology and marketing: An examination of the drivers and outcomes of e-Marketing capability Industrial Marketing Management, 40(1), 162–174 https://doi.org/10.1016/j.indmarman.2010.05.001

Umar, A., Sugiharto, & Hartanto (2020) Improving the business performance of SMEs through digital marketing training International Journal of Innovation,

Valentin, E K (1996) The Marketing Concept and the Conceptualization of Market Strategy Journal of Marketing Theory and Practice, 4(4), 16–27 https://doi.org/10.1080/10696679.1996.11501735

Van Laar, E., Van Deursen, A J A M., Van Dijk, J A G M., & De Haan, J (2019) Determinants of 21st-century digital skills: A large-scale survey among working professionals Computers in Human Behavior, 100, 93–104 https://doi.org/10.1016/j.chb.2019.06.017

Varis, M., & Littunen, H (2010) Types of innovation, sources of information and performance in entrepreneurial SMEs European Journal of Innovation

Wang, C L., & Chung, H F L (2020) Business networking and innovation of Asian enterprises in Western countries: The moderation of institutional distance.

Industrial Marketing Management, 88(July 2019), 152–162 https://doi.org/10.1016/j.indmarman.2020.05.002

Wang, D S (2019) Association between technological innovation and firm performance in small and medium-sized enterprises: The moderating effect of environmental factors International Journal of Innovation Science, 11(2), 227–

Wang, F (2020) Digital marketing capabilities in international firms: a relational perspective International Marketing Review, 37(3), 559–577 https://doi.org/10.1108/IMR-04-2018-0128

Watson, J (2007) Modeling the relationship between networking and firm performance Journal of Business Venturing, 22(6), 852–874 https://doi.org/10.1016/j.jbusvent.2006.08.001

Wernerfelt, B (1984) A resource‐based view of the firm Strategic Management

Journal, 5(2), 171–180 https://doi.org/10.1002/smj.4250050207

Wiklund, J., & Shepherd, D (2003) Knowledge-based resources, entrepreneurial orientation, and the performance of small and medium-sized businesses Strategic

Management Journal, 24(13), 1307–1314 https://doi.org/10.1002/smj.360

Woldie, A., Leighton, P., & Adesua, A (2008) Factors influencing small and medium enterprises (SMEs): An exploratory study of owner/manager and firm characteristics Banks and Bank Systems, 3(3), 5–13.

World Bank (2020) Digital Skills: Frameworks and Programs In World Bank (Vol.

4, Issue 4) https://documents.worldbank.org/en/publication/documents- reports/documentdetail/562351611824219616/digital-skills-frameworks-and- programs

Wu, L., Wei, Y., Wang, C., McDonald, F., & Han, X (2022) The importance of institutional and financial resources for export performance associated with technological innovation Technological Forecasting and Social Change,

185(September), 122040 https://doi.org/10.1016/j.techfore.2022.122040

Yaseen, H., Al-Adwan, A S., & Al-Madadha, A (2019) Digital marketing adoption among smes in Jordan: A mixed-method approach Journal of Theoretical and

Yasuda, T (2005) Firm growth, size, age and behavior in Japanese manufacturing

Small Business Economics, 24(1), 1–15 https://doi.org/10.1007/s11187-005-

Zhang, C (2017) Top manager characteristics, agglomeration economies and firm performance Small Business Economics, 48(3), 543–558 https://doi.org/10.1007/s11187-016-9805-y

Output of regression estimated

https://phantichstata.com/cach-xuat-copy-ket-qua-stata-ra-word-dep-khong-bi-mat-format.html (R)

4905 Lakeway Drive College Station, Texas 77845 USA 800-STATA-PC http://www.stata.com 979-696-4600 stata@stata.com 979-696-4601 (fax)

Single-user Stata perpetual license:

Licensed to: StataForAll www.stata.com

Appendix 3.1: Output of Model 1.1 with sales revenue as dependent variable

reg FP_Rev DM TI DO OwnerAge Edu Size Industry

Source | SS df MS Number of obs = 7,708

FP_Rev | Coef Std Err t P>|t| [95% Conf Interval]

Appendix 3.2: Output of Model 1.2 with sales revenue as dependent variable

reg FP_Rev DM TI DO DS OwnerAge Edu Size Industry

Source | SS df MS Number of obs = 7,708

FP_Rev | Coef Std Err t P>|t| [95% Conf Interval]