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MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY ………………… BÙI NHẬT LÊ UYÊN RESEARCHING OF FACTORS IMPACT INNOVATION CAPACITY OF HIGH TECHNOLOGY INDUSTRIAL ENTERPRISES IN VIETNAM SOUTHERN’S FOCAL PROVINCES SPECIALIZATION: COMMERCIAL BUSINESS CODE: 93 40 121 SUMMARY OF DOCTOR OF PHILOSOPHY THESIS THÀNH PHỐ HỒ CHÍ MINH, NĂM 2018 Thesis was completed at: Scientific instructor: Reviewer 1: Reviewer 2: Reviewer 3: This thesis was protected at the council of school: At hours date month year A thesis can be found at the library: LIST OF RESEARCH PAPERS A Key research papers relate to the thesis Bùi Nhật Lê Uyên, 2016 Innovation capacity – the solution for Ho Chi Minh manufacture businesses in integrated period Industry and Trade magazine, Vol 7, 07/2016, p.94-101 Đoàn Thị Hồng Vân Bùi Nhật Lê Uyên, 2016 Enhance innovation capacity - the important solutions to help Vietnam businesses for sustainable development Journal of economic development, Nov.2016, p.271-289 Đoàn Thị Hồng Vân Bùi Nhật Lê Uyên, 2017 Factor effecting innovation capacity in Vietnamese Southern high technology industries Journal of economic development, volume 24, issue 3, p.66-93 B Other research papers Đoàn Thị Hồng Vân Bùi Nhật Lê Uyên, 2015 Viet Nam's innovative capacity in the context of integrating ASEAN economic community Proceedings of scientific workshop: ASEAN Economic Community opportunities and challenges for Vietnamese enterprises, University of Economics and Finance, p.27-34 Bùi Nhật Lê Uyên, 2016 Human resource problem for innovation activities of high-tech enterprises in the integration period Proceedings of science and technology conference 2016, Ho Chi Minh City University of Technology, p.93-96 CHAPTER RESEARCH OVERVIEW 1.1 Research base 1.1.1 The necesscity of research High-tech industry plays a particularly important role in the national economy But in Vietnam, in the current period, due to many subjective and objective reasons, the innovation capacity of enterprises in this field is very limited Therefore, to improve the capacity of innovation, we firstly need to identify the factors that affect it Besides, innovation capacity is also a research issue that the world and domestic science is very interested in Evidence is in the world there have been many research projects on innovation capacity in the field of high technology However, beside the academic value, these studies also had theoretical gaps Moreover, there are only few research projects in Vietnam that directly address factors affecting innovation capacity On that basis, the author would like to affirm the thesis "Researching on factors impact innovation capacity of high-tech industrial enterprises in Vietnam Southern’s focal provinces" is a necessary direction, because of its importance and contribution to both science and practice 1.1.2 Research background 1.1.2.1 Theoretical background Many scientists in the world studied in innovation and have proven that the success of a business in knowledge-based economy depends on how to improve its innovation capacity (Danquaha and Amankwah-Amoahb, 2017; Azevedo et al., 2007) Therefore, this is the subject that many studies in the world and in domestic towards: how to motivate innovation through researching the factors that affect it That is also the research issue of this thesis From that, the relationship between innovation capacity and a number of factors such as total quality management (TQM), organizational learning, government support, collaboration network, knowledge absorptive capacity, internal human resources was explored But the results in levels of influence was different There were many arguments and research gaps as TQM’s role In addition, most studies measured the concept of "Government support" through participation in R&D projects that funded by the Government However for developing countries such as Vietnam whether this measurement is really effective when applied For the concept of internal human resources, Bantel and Jackson (1989), Koroglu and Eceral (2015) argued that behind the successful innovation of an organization that was managed by educated and professional personnel Whereas Dakhli and De Clercq (2004) argued that the ability to accumulate work experiences over time would create important skills for the individuals rather than themselves qualification Moreover, there is one issue not to be clarified, there is always a debate about how to measure innovation capacity (Kanji, 1996; Prajogo and Sohal, 2003; Tang, 1998) On the other hand, in domestic research, there are many articles on innovation capacity, but most of them are scientific reports, articles in seminars, mainly in the form of an overview, explanation of terms, reality analysis and proposed solutions So that, the author has less opportunities to learn experiences in designing research, methodology, data collection and analysis, econometric modeling, building and testing measurement scale from local authors 1.1.2.2 Practical backgound The reality of Vietnam's innovation capacity is still difficult problem Factors impact innovation, such as government support, collaboration networks, human resource quality are limited, even R&D activities are considered as minority In terms of R&D capacity, most domestic producers only focus on development rather than research About human resources in our country, especially Ho Chi Minh City, are not trained according to international standards The scale of training is sparse, spontaneous and non-oriented They care about quantity than quality lead to lacking of quantity and not ensure quality in human resources The government's role is very important in promoting innovation, because there are many drawbacks in the high-tech industry that businesses face to like as problems of copyright, commercial disputes, the quality of education and training All of matters contributed to create the barriers in innovating and growing 1.2 Research questions and objectives 1.2.1 Research questions The thesis should clarify the following research questions: - What factors that impact the innovation capacity of high-tech industrial enterprises, research cases in Vietnam Southern’s focal provinces? - How is the correlation and the degree of impact between these factors to innovation capacity? - Which factor’s scale should be developed, supplemented or measured to be appropriate when testing in Vietnam Southern’s focal provinces? - What is the differences between the factors affecting the innovation capacity in domestic and FDI sector ? 1.2.1 Research objectives The overall objective was to identify factors and assess their impact on innovation capacity of high-tech industrial enterprises, in case of testing in some of key provinces of Vietnam Southern Detail objectives: - Analyze the relationship between factors based on theory, thereby determining the factors affecting the innovation capacity - Evaluate the impact of factors on innovation capacity through testing hypotheses in the research model - Develop scale by discovering and adding new observed variables for the factors that not have complete scale when testing in Vietnam - Evaluate the influence of factors on innovation capacity in comparison between domestic enterprises and FDI enterprises based on the difference test 1.3 Research’s subject and scope 1.3.1 Research subject: the research subject is enterprise-level innovation capacity and measured through product innovation and process innovation 1.3.2 Research scope Research time: Research theory: theory of innovation and innovation capacity was in the period from 1911 to 2017 Research reality: Primary data on innovation capacity of high-tech enterprises was surveyed in 2012-2014 and proposing management implications for 2019-2025 Research space: In some of focal provinces of Vietnam Southern, including Ho Chi Minh city, Binh Duong, Dong Nai and Vung Tau The high technology sectors were surveyed as following: electronics, microelectronics; precision mechanics and automation; information technology and telecommunications; pharmaceuticals, biotechnology; high tech services 1.4 Research methodology The author chose mix method is as the main research method, in which: Qualitative research was conducted through two techniques: in-depth interview and focus group discussion in order to adjust the content of observable variables to suit the characteristic of Vietnam businesses in hightech industry and to explore new observable variables for the concepts has controversial scale (Government support and internal human resource) Quantitative research was conducted in two phases: a preliminary study of 89 samples to evaluating concept scales and official study of 380 samples to testing research model and hypotheses The data were cleaned and processed in software SPSS20 and Amos20 with Cronbach's alpha technique, Exploratory Factor Analysis (EFA), Confirmatory factor analysis (CFA) and Structural Equation Modelling (SEM) 1.5 Thesis’s contribution 1.5.1 New point of thesis - The author proposed a research model on factors affecting the innovation capacity of high-tech industrial enterprises, firstly tested in a number of key provinces of Vietnam Southern - Adjust and develop the original scale by adding new observable variables for concept of Government support and internal human resource - Adjust and develop the scale of innovation capacity towards forming a quantitative scale - Analyze and compare the impact of each factor to innovation capacity between domestic enterprises and FDI enterprises 1.5.2 Academic contribution + Systematize innovation theory and the model of factors that influence innovation capacity in the world from 1911to 2017 This is a useful reference for future studies in the same field + This is an academic research that is inherited and supplemented, firstly tested in Vietnam Therefore, it is basis of succession for Vietnam researchers on innovation capacity in the coming years + Research contributes to develop the scale of factors that influencing to innovation capacity, step by step perfecting the methodology in measuring innovation capacity and related concepts 1.5.3 Practical contribution + The thesis’s results supports the policy makers as well as the managers of high technology enterprises + The thesis’s management implications facilitate to implement many applied projects or propose appropriate strategies for enterprises (domestic or FDI) to improve their innovation capacity 1.6 Thesis’s structure Chapter 1: RESEARCH OVERVIEW Chapter 2: THEORETICAL BASIS AND RESEARCH MODEL Chapter 3: RESEARCH DESIGN Chapter 4: ANALYSIS OF RESEARCH RESULTS Chapter 5: CONCLUSION AND MANAGEMENT IMPLICATIONS SUMMARY OF CHAPTER CHAPTER THEORETICAL BASIS AND RESEARCH MODEL 2.1 Concept of innovation, innovation capacity and high technology 2.1.1 Innovation 2.1.1.1 Concept of innovation Innovation theory is the foundation for the birth of the concept of innovation capacity, which was formed in the 1911s and has a long history of development Over time, the concept of innovation is increasingly consolidated and improved According to Brilman, J (2002, page 28), "innovation is the way to apply a creative idea to help businesses develop and adapt quickly in a competitive environment." Another concept of Damanpour and Aravind (2011, p 427), “innovation is the process from creating, developing and transforming ideas into new products, new processes, new organizational structures or new administration methods" Thus, from synthesizing the concepts of innovation from many empirical studies in the world, the author drawed the concept of innovation that was suitable for this thesis, which is a process related to the use of enterprise resources to make efforts to improve and develop completely new products or processes for businesses Therefore, innovation is very important and has always been the biggest concern of many businesses, governments and research institutes (Hekkert and Negro, 2009) 2.1.1.2 Classification of innovation In this thesis, the author only approached two forms of innovation, that is product innovation and process innovation according to OECD’s classification (2005) and Lugones (2012) According to OECD (2005), Product innovation is the birth of a new good or service or significant improvements in existing goods and services Process innovation is the implementation innovation or had a significant improvement in production method or delivery method, which includes important changes in technology, equipment or software According to Lugones (2012), Product innovation is introduction to market a new product or new service that owns technical specifications, components, material characteristics or functionality totally different in compare with previous products Or a new product or service has significant improvements on existing products/services Process innovation is a new process or significant improvement on an existing process 2.1.2 Innovation capacity 2.1.2.1 Concept of innovation capacity In this study, the author agrees with previous conclusions and presents thesis’s point of view Innovation capacity is ability of an enterprise to use internal resources or external resources to conduct innovation activities by producing and introducing to the market completely new products or new processes or making changes and significant improvements on existing products/processes 2.1.2.1 The importance of innovation capacity According to Suarez (1990), the economy of a nation, a region or a geographic area that has the capacity to innovate rapidly, it can not only attract skilled and experienced human resources, but also promote growth in income and trade in the region In contrast, the innovation capacity depress in any country, region or geographic region will be an early warning of difficulties and decline in future (Suarez, 1990) Therefore, innovation capacity is very important to create competitiveness, allowing businesses to compete effectively in international markets (Williams and Hare, 2012; FernándezMesa and Alegre, 2015) 2.1.3 High technology and innovation capacity in high tech 2.1.3.1 The concept of high technology In Vietnam, according to the High Technology Law No 21/2008 / QH12 (Quoc Hoi, 2008), "High technology is a technology with a high content of scientific research and technological development; integrated from modern technological and scientific achievements; to create products with superior quality and features, high added value, environmentally friendly; plays an important role in the formation of a new production or service industry or modernize the existing manufacturing and service industry ” business philosophy in which emphasize continuous improvement, customer orientation and total quality management These statements are closely related to the principles of TQM 2.2.2 Innovation capacity’s models in high technology industry Jantunen (2005) explored the relationship between the environmental dynamics, absorptive capacity and innovation capacity However, the research’s result only demonstrated the role of knowledge utilization and environmental dynamics Both of them showed positive role and impact to innovation capacity The study’s implication is only businesses had good knowledge processing capabilities can be equipped method to refresh the knowledge base and exploit available knowledge to develop new products to meet market demand Tseng et al, (2011), from the Jantunen’s study (2005), Tseng et al (2011) continued to affirm the role of absorptive capacity for innovation He analyzed whether knowledge input and knowledge diffusion can increase the efficiency of innovation The testing result supported the hypothesis that knowledge input positively influence innovation Similarly, the spillovers effect of knowledge from the business themself, from foreign semiconductor companies and from non-semiconductor companies hold a dominant position in impacting to innovation Beside, absorbtive capacity had also a positive impact on innovation capacity Rangus, K and Slavec, A (2017), Rangus and Slavec (2017) continued to explore the relationship between absorptive capacity and innovation capacity Research also explored the role of organizational characteristics such as decentralization, employee participation to enhancing innovation Research’s results demonstrated the role of decentralized culture, employee engagement and absorptive capacity impact to innovation capacity From then, innovation influenced the business’s performance Hung et al., (2010) The objective of the study was to determine the relationship between total quality management (TQM); organizational learning and innovation capacity, including product innovation, process innovation and organizational innovation Hung et al used mixed method The results showed that relationships achieved statistical significance in the positive correlation between TQM and organizational learning to innovation capacity In addition, the learning process of the organization is the foundation for innovation because it is an opportunity to learn, collaborate and encourage employees to create new knowledge, share and apply that knowledge, especially learning strategies play the most important role in promoting learning in organization Kang and Park (2011), Kang and Park analyzed the impact of collaborative relationship between firms, the role of human resources for R&D, as well as government support on innovation capacity Research used quantitative methods The results demonstrated that cooperation between firms impact to innovation, in which the downstream and upstream international relationship represented a dominant influence on the innovation The role of government and human resources for R&D also positively influenced innovation capacity 2.3 Proposing the research model and analyzing the process of forming the hypotheses 2.3.1 Proposed the research model The research model of thesis was based on the basis theory of Schumpeter, Nelson's theory and NIS theory, combined with research gaps that were explored in process of literature review (Total Quality Management will impact innovation capacity in positive or negative schools; the original scale of government support, internal human resources and innovation capacity was suitable totally or not when testing in Vietnam, if no, were there an additional adjustment), along with building of research hypothesises that based theory and expert interviews Figure 2-10: Model of factors affecting to the innovation capacity of business in high-tech industries Source: author’s research 2.3.2 Analyzing the process of forming the hypotheses in research model 2.3.2.1 Total quality management (TQM) and innovation capacity The relationship between innovation capacity and the principles of TQM is found in the theory of Suarez-Villa (1990) TQM has been proven useful administrative solution in innovation and improving business’s competitive advantage Besides, if an organization commits to apply the principles of TQM into its operating systems, the efforts for innovation will bring expected results Thus, in this study, the author agreed that TQM would contribute to improving innovation capacity and proposing hypothesis H1 with positive effects Hypothesis H1: Total Quality Management positvely affects to the innovation capacity of high-tech industrial businesses (H1 marked +) 2.3.2.2 Organization learning and innovation capacity Derived from Schumpeter theory (1911), there are many different definitions of organization learning According to studies of Argyris and Schon (1978); Bontis, Crossan and Hulland (2002); Nonaka and Takeuchi (1995); Davenport and Prusak (1998); Rothaermel and Deeds (2004); Hung et al., (2010)…confirmed learning effort is the source of knowledge for innovation For that reason, the author believed in the role of organizational learning and hypothesis H2 was proposed Hypothesis H2: The Organization learning positvely affects to the innovation capacity of high-tech industrial businesses (H2 marked +) 2.3.2.3 Government support and innovation capacity The concept of government support stemmed from basis theory of National innovation system (NIS), which is an interactive system of private enterprises, universities, scientific institutions and the government This system produces science and technology within national borders, in which the government holds an important role (Niosi et al., 1993) Thus, the Government not only acted as an investors and financial support for the research and development of the enterprises, but also promote innovation capacity through regulating supported mechanism such as subsidy, tax incentive, loan or R&D human resources (Wallsten, 2000; Beugelsdijk and Cornet, 2002; Romijn and Albaladejo, 2002; Souitaris, 2002; Park, 2006; Kang and Park, 2011 ) From these arguments about the Government’s role, we proposed hypothesis H3 as below Hypothesis H3: The Government support positvely affects to the innovation capacity of high-tech industrial businesses (H3 marked +) 2.3.2.4 Collaboration network and innovation capacity The theory of Nelson (1977; 1982, 1993) and the theory of national innovation system (NIS) are the inspiration for schools of research on collaborative networks in promoting innovation According to Ahuja, G (2000); Becheikh et al, (2006); Kang and Lee (2008); George, G et al, (2002); Hagedoorn (1993); Romijn and Albaladejo (2002); Rothaermel and Deeds (2006) emphasized the collaboration in the value chain is a prerequisite for transferring of knowledge and technical know-how Cooperation also contributes to setting up standard in the industry as well as improving the application of new techniques From the point of view, this study hoped that if an organization possesses high quality workforce, have a good educational background, skills, flexibility and resolving job thoroughly, will bring the strength for innovation capacity Hypothesis H6: Internal human resources positvely affects to the innovation capacity of of high-tech industrial businesses 2.3.2.7 Ownership status and innovation capacity Hypothesis H7: There exists a difference between domestic high-tech enterprises and foreign high-tech enterprises (FDI sector) in the level of influence/impact of total quality management (TQM), organizational learning (OL), Government support (GS), collaboration network (CN), absorptive capacity (AC) and internal human resources (IHC) to innovation capacity (IC) SUMMARY OF CHAPTER CHAPTER RESEARCH DESIGN 3.1 Research process 3.1.1 Research process The research process of the thesis consists of stages Stage 1: Determine research problem Stage 2: Add new observation variables to develop and improve the scale of research concepts Stage 3: Testing research model and hypothesis Stage 4: Management implications for research results 3.1.2 Process of development and completion of the scale In this study, the author applies the process of building observation variables of Churchill (1979); Steenkamp and Van Trijp (1991), this process was applied in Vietnam by Nguyen Dinh Tho (2007), with the following three basic steps: (1) Building observed variables; (2) Evaluate the scale of the preliminary stage and (3) Evaluate the scale at the official stage 3.2 Research methodology The study used mixed methods, including qualitative research and quantitative research to adjust, supplement, modify and testing scale, testing research model and hypotheses: 3.2.1 Qualitative research aims to develop and improve the scale of research concepts In-depth interview In-depth interview was carried out with experts who are extensive experienced researchers in Vietnam Southern high-tech industry All of them affirm the important role of Total Quality Management (TQM), organizations learning, Government support, absorptive capacity, internal human resources and collaboration network to innovation capacity In this research stage, the authors explore and collect information maximally on research topics, especially the concepts need to rebuild the scale Based on that work, authors will adjust or supplement new observable variables from the original scale to build the first draft scale Thus, the results of in-depth interview had contributed for the development of the first draft scale that used in focus group discussions Focus - group The specialists take part in the focus group including managers who understand business’s development process and determinate innovation capability as an indispensable objective In this stage, the main objective focus to assess the first draft scale’s content and build the second draft scale for quantitative research in the next stages The authors choose focus group method because it’s suitable with exploitation information and exchange of views between the members in the group The author show that the opposition and similarity in discussion to realize latent aspects of research 3.2.2 Quantitative research Preliminary research Preliminary research was conducted through interview by questionnaire Sample size n = 89, sampling method was selected to detect errors in the questionnaire and testing scale initially This survey’s subject was the senior managers of high-tech businesses in Vietnam southern (Ho Chi Minh city, Dong Nai province, Binh Duong province, Vung Tau city) in the following fields: information technology and communication; pharmaceuticals, biotechnology; nanotechnology, energy; mechatronics, automation, microelectronics and high-tech services Reason for choosing the object is the managers, directly in charge of the business plan, research and development department (R&D), marketing and market because they deeply understand of their developing capacity, engage in strategic planning as well as implement annual potential technological projects They realize daily reality of the business and desire to enhance innovation capacity for growth The data was tested via analyzing Cronbach's alpha and Exploratory Factor Analysis (EFA) Official research The study was conducted by surveying questionnaire (official scale) Sample size n = 400 Sampling process is conducted as follows: from the crowd (N = 800), calculate the hops k = N/n = 800/400 = This survey’s subject was the senior managers of high-tech businesses in Vietnam southern (Ho Chi Minh city, Dong Nai province, Binh Duong province, Vung Tau city) in the following fields: information technology and communication; pharmaceuticals, biotechnology; nanotechnology, energy; mechatronics, automation, microelectronics and high-tech services The data was cleaned and processed in software SPSS20 and Amos20 with Cronbach's alpha technique, Exploratory Factor Analysis (EFA), Confirmatory factor analysis (CFA) and Structural Equation Modelling (SEM) 3.3 Analyze the formation and development of research concept’s scale 3.3.1 Innovation capacity The concept of innovation capacity (variable code: IC) consists of statements (5 observed variables) and only emphasized product innovation and process innovation 1) Number of new product lines are introduced within 2012-2014 of this company ? 2) Number of changes or improvements to existing product lines within 2012-2014 of this company ? 3) Number of new equipment or technology are applied in the production process of this company within 2012-2014 ? 4) Number of new input materials are applied in the production process of this company within 2012-2014 ? 5) Number of organisational changes or improvements made in the production processes of this company within 2012-2014 ? 3.3.2 Government support The study inherited Wallsten's scale (2000), together with the results of indepth interview that helped the author add two new observable variables for Government Support scale (GS) with statements as follows: 1) Our company participated in R & D projects funded by the Government => Wallsten (2000) 2) Government facilitate for our company access to preferred loans => new observable variables 3) Government facilitate for our company training and development of professionals human resources => new observable variables 3.3.3 Internal human resources The scale of Internal human resource concept (IHC) described by the following statements: 1) Human resources in our company are highly skilled 2) Human resources in our company are very intelligent and creative 3) Human resources in our company is considered to be the best in this field 4) Human resources in our company are specialized on their jobs 5) Human resources in our company are always thinking and creating new ideas and knowledge 6) Human resources in our company are trained in professional environments 7) Human resources in our company always work best and committ to making efforts to achieve our goals 3.3.4 Total quality management (TQM) In this study, TQM is measured through components: (1) The support of senior managers; (2) Employee involvement; (3) Continuous improvement and (4) Customer-orientation The author applies the scale of Coyle-Shapiro (2002); Zeitz et al (1997) to measure TQM 3.3.5 Organization learning The author applied the original scales of Watkins and Marsick, (2003); Rhodes, Hung, Lok, Lien, and Wu (2008) that tested for 1139 high-tech enterprises in Taiwan At the same time, qualitative research also unified this scale after adjusting the structure and words 3.3.6 Absorptive capacity The author applied the original scale of Jantunen (2005) which has been tested in the field of information technology, telecommunications and measured absorption capacity through components: Knowledge acquisition, Knowledge dissemination and Knowledge utilization 3.3.7 Cooperation network Inheriting the scale of Stuart et al (2007), Kang and Park (2011), the author measures the collaborative network based on the assessment of cooperation (both formal and informal) between joint with related parties (domestic and international) with Likert scale 3.3.8 Ownership status (Control variables) The author used the question "What is your company’s ownership status?" to measure it, which suggests selecting groups of businesses: 100% domestic business; 100% foreign direct invesment or joint venture between Vietnamese enterprises and foreign enterprises 3.4 The preliminary quantitative research Preliminary research should be ensured four steps: (1) Cronbach's alpha analysis; (2) EFA analysis for each concept scale; (3) General EFA analysis for concepts and (4) Testing cronbach's alpha coefficient of extracted components in step Data was obtained 89 complete questionnaires (n = 89) The results of the study accomplished its role in verifying the reliability of the conceptual scale and extracting 10 components: - Total Quality Management (TQM) has three components that was extracted from EFA’s result, it has 14 observable variables compared to 16 observable variables of original scale, in which component of top management support (TQMTM) has observable variables; component of continuous improvement has observable variables (TQMCI) and component of customer focus (TQMCF) has observable variables - Organizational learning (OL) has components that was extracted from EFA’s result, with observable variables; including learning strategy has observable variables; learning culture has observable variables - Government support (GS) still remain content value of original scale, only component that was extracted from EFA’s result, with observable variables - Absorptive capacity (AC) has components that was extracted from EFA’s result, with observable variables, including knowledge dissermination (ACKD) has observable variables and knowledge acquisition (ACKA) has observable variables - Internal human resource (IHC) only has components that was extracted from EFA’s result, with observable variables - Collaboration network (CN) has components that was extracted from EFA’s result, with observable variables SUMMARY OF CHAPTER CHAPTER OFFICIAL QUANTITATIVE RESEARCH’S RESULT 4.1 Testing the concept’s scale Testing the concept’s scales to ensure reliability before testing the model and research hypotheses The study uses the following methods: exploratory factor analysis (EFA), Cronbach's alpha reliability and confirmatory factor analysis (CFA) There are 10 components that extracted from EFA results To ensure the reliability for these scales, the study tests Cronbach's alpha for extractive components from the analysis of EFA The result showed that the coefficient of α of all components is greater than 0.6 and the corrected item-total correlation is greater than 0.3 CFA’s result showed all scales achive the unidimesionality, composite reliability, variance extracted (some scales accepted), cronbach's alpha, convergent validity and discriminant validity 4.2 Testing of model and hypotheses 4.2.1 Testing research model Model has Chi-square = 952.008, df= 480 (P = 0.000), Chi-square / df = 1.932 (according to Carmines and McIver, (1981), in some cases CMIN/df can be ≤ 3), RMSEA = 0.048, TLI = 0.903 and CFI = 0.912 > 0.9, thus the model fits with market data In addition, the regression weights have demonstrated the relationship between the concepts of total quality management (TQM), internal human resources (IHC), absorptive capacity (AC), collaboration network (CN), Government support (GS) with innovation capacity (IC), because p-values < 0.1, has statistical significance at 90% level of reliability The regression weights marked “+”, confirmed that TQM, IHC, AC, CN, GS positively impact to the innovation capacity (Table 4-7) The standardized regression weights are positive and also show the degree of influence between them (Table 4-7), in which, collaboration network (CN) strongly impact to innovation capacity because absolute value of standardized weight is highest 0.395 The next important role is total quality management (TQM), this concept has standardized weight is 0.276, internal human resources (IHC) ranked 3rd with standardized weight is 0.234, the 4th important belongs the government support has standardized weight 0.172 and absorptive capacity (AC) has the lowest standardized weight is 0.107 Although concepts of TQM, AC, IHC, GS and CN only explain 51.5% of the variations of innovation capacity Table 4-7: The relationship between the concepts in research model Standardized Unstandardized regression weights regression Relationship weights IC IC IC IC < < < < - TQM AC IHC CN IC < - GS Estimate 14.205 18.276 5.744 7.825 S.E 6.014 9.216 2.491 1.678 C.R 2.370 1.983 2.305 4.654 P 018 059 025 *** Label par_31 par_32 par_33 par_34 Estimate 276 107 234 395 15.329 8.257 1.856 036 par_35 172 Source: Author’s official research results 4.2.2 Testing research hypotheses Rsearch has hypotheses about relationships between concepts The SEM results verify these relationships by following: H1: Total Quality Management positvely affects to the innovation capacity of business in Vietnam southern high-tech industry Testing result show that p-value = 0.018 < 0.1, achieve statistical significance, at level of reliability 90% (Table 4-7) Thus the hypothesis H1 is accepted H2: The Organization learning positvely affects to the innovation capacity of business in Vietnam southern high-tech industry The result does not reach statistical significance when p-value = 0.382 > 0.1, at level of reliability 90% Hence, the hypothesis H2 is not accepted H3: The Government support positvely affects to the innovation capacity of business in Vietnam southern high-tech industry The study’s result clearly reflects reality when the Government support has p-value = 0.036 < 0.1, achieve statistical significance at 90% reliability (Table 4-7) and standardized regression weights in relationship with innovation capacity reach 0.172 Therefore hypothesis H3 is accepted H4: The collaboration network positvely affects to the innovation capacity of business in Vietnam southern high-tech industry Testing result shows the p value = ***