Mediating effect of strategic management accounting practices in the relationship between intellectual capital and corporate performance evidence from vietnam

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS, HO CHI MINH CITY TRINH HIEP THIEN Mediating effect of strategic management accounting practices in the relationship between intellectual capital and corporate performance Evidence from Vietnam A dissertation submitted for the Degree of Doctor of Philosophy in Accounting May 2019 MEDIATING EFFECT OF STRATEGIC MANAGEMENT ACCOUNTING PRACTICES IN THE RELATIONSHIP BETWEEN INTELLECTUAL CAPITAL AND CORPORATE PERFORMANCE EVIDENCE FROM VIETNAM Trinh Hiep Thien MPAcc (University of Sydney), MBA (UEH), BBus (UEH), ACMA, CGMA A dissertation submitted for the Degree of Doctor of Philosophy in Accounting Code: 9.34.03.01 Academic Supervisors: Dr Doan Ngoc Que Dr Le Dinh Truc University of Economics, Ho Chi Minh City May 2019 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS, HO CHI MINH CITY Submitted to School of UEH Graduate Title of dissertation: Mediating effect of strategic management accounting practices in the relationship between intellectual capital and corporate performance – Evidence from Vietnam Author: Trinh Hiep Thien Academic Supervisor: Dr Doan Ngoc Que Dr Le Dinh Truc Date of Final Defense: Final Defense Committee: Jury Composition Read and Approved by _ First discussant _ Second discussant _ Third discussant _ Member _ Member _ Secretary _ Defense Committee Chairperson Accepted by the School and the University in partially fulfillment of the requirements for the degree of Doctor of Philosophy in Accounting _ Date _ Date _ Dean of the School of Accounting _ Dean of the School of UEH Graduate STATEMENT OF AUTHENTICATION The work described in this dissertation is original based on raw data collected by me, except where due acknowledgement is made in the text I hereby declare that this material has not previously submitted, either in full or in part, for a degree at this or any other institution Ho Chi Minh City, May 31st, 2019 TRINH HIEP THIEN TABLE OF CONTENTS Page LIST OF TABLES I LIST OF FIGURES II LIST OF ABBREVIATIONS III ABSTRACT IV INTRODUCTION 1 Background Research questions and research objectives 3 Research object and research scope .4 Methodology .5 Outline of the dissertation CHAPTER 1: LITERATURE REVIEW 1.1 Review of international studies of intellectual capital 1.1.1 Stages in developing intellectual capital as a research field .8 1.1.2 Research trends on intellectual capital in the accounting discipline 10 1.1.3 Research methods used to study intellectual capital 14 1.1.4 Review of studies investigating the relationship between intellectual capital and corporate performance 16 1.2 Review of international studies of strategic management accounting 18 1.2.1 Research on conceptualizing strategic management accounting 18 1.2.2 Research on strategic management accounting techniques 20 1.2.3 Research on the relationship between environment, strategy choice and strategic management accounting practices 22 1.2.4 Research on strategic management accounting process 22 1.2.5 Review of studies investigating the relationship between strategic management accounting practices and corporate performance 24 1.3 Review of studies of intellectual capital and strategic management accounting in Vietnam 25 1.3.1 Vietnamese context 25 1.3.2 Research on intellectual capital in Vietnam 27 1.3.3 Research on strategic management accounting in Vietnam .28 1.4 Research gaps 30 1.4.1 Lack of studies concerning performance implication of intellectual capital in association with the mediating role of SMA practices .30 1.4.2 Lack of empirical research concerning the relationship between intellectual capital and each group of SMA practices 31 1.4.3 Lack of Vietnamese empirical studies on intellectual capital and SMA practices .31 SUMMARY OF CHAPTER .33 CHAPTER 2: THE CONCEPTS AND INTELLECTUAL CAPITAL MEASUREMENT MODELS 34 2.1 Definition of intellectual capital 34 2.2 Components of intellectual capital 37 2.2.1 Human capital 37 2.2.2 Structural capital .38 2.2.3 Relational capital .39 2.3 Definition of corporate performance .41 2.4 Determinants of strategic management accounting practices 43 2.5 Intellectual capital measurement models 46 SUMMARY OF CHAPTER .49 CHAPTER 3: THEORETICAL FRAMEWORK AND HYPOTHESES DEVELOPMENT 50 3.1 Mediating effect of strategic management accounting practices in the relationship between intellectual capital and corporate performance 50 3.1.1 Human capital, structural capital and relational capital reciprocally affect each other (H1) .51 3.1.2 Intellectual capital impacts on SMA practices (H2) 52 3.1.2.1 Underlying theoretical framework 52 3.1.2.2 Hypotheses development (H2) 54 3.1.3 Intellectual capital impacts on corporate performance (H3) .56 3.1.3.1 Underlying theoretical framework 56 3.1.3.2 Hypotheses development (H3) 57 3.1.4 SMA practices impact on corporate performance (H4) 59 3.1.4.1 Underlying theoretical framework 59 3.1.4.2 Hypothesis development (H4) .60 3.1.5 The mediating role of strategic management accounting practices in the relationship between intellectual capital and corporate performance (H5) 62 3.2 Associations between intellectual capital components and each group of strategic management accounting practices 64 3.2.1 Underlying theoretical framework 65 3.2.2 Hypotheses development (H6) 66 3.3 Summary of the correlations in the two research models .68 SUMMARY OF CHAPTER .71 CHAPTER 4: RESEARCH METHODOLOGY 72 4.1 Selection of an appropriate regression approach .72 4.2 Research process .73 4.2.1 Evaluation of reflective measurement scales 75 4.2.2 Evaluation of formative measurement scales 77 4.2.3 Evaluation of the fitness of structural model 78 4.2.4 Evaluation of the significance and the stability of path coefficients 79 4.3 Unit of analysis and sample size .80 4.3.1 Unit of analysis and informants 80 4.3.2 Sample size .81 4.4 Variables measurement 83 4.4.1 Measures of each component of intellectual capital 83 4.4.1.1 Operationalization of value added (VA) 84 4.4.1.2 Operationalization of human capital efficiency (HCE) 85 4.4.1.3 Operationalization of structural capital efficiency (SCE) 85 4.4.1.4 Operationalization of relational capital efficiency (RCE) 91 4.4.2 Measures of the variables of strategic management accounting practices .91 4.4.3 Measures of the variables of corporate performance 92 4.4.4 Measures of control variables 94 SUMMARY OF CHAPTER .96 CHAPTER 5: SAMPLE CHARACTERISTICS AND MEASUREMENT SCALES ASSESSMENT 97 5.1 Data collection to construct the variables of SMA practices 97 5.1.1 Questionnaire structure .97 5.1.2 Translating and pilot testing of the questionnaire .98 5.1.3 Main data collection procedure 99 5.2 Sample characteristics 101 5.2.1 Industry type 101 5.2.2 Organization size and SMA practices type .102 5.2.3 Respondents’ position type .103 5.3 The outcomes of reflective measurement scales assessment 104 5.4 The outcomes of formative measurement scales assessment 106 5.4.1 Calculation of measurement scale of innovation capital efficiency .106 5.4.2 Calculation of measurement scale of organizational capital efficiency 106 5.4.3 Assessment of formative measurement scales related to the structural capital efficiency variable .108 5.5 Calculation of the variable of investment efficiency 110 5.6 Descriptive statistics and collinearity assessment 111 SUMMARY OF CHAPTER .113 CHAPTER 6: DATA ANALYSIS AND DISCUSSION .114 6.1 Evaluation of the fitness of theoretical models .114 6.2 Empirical results – testing of reciprocal correlations between intellectual capital components (H1) 115 6.3 Empirical results – testing of the correlations between intellectual capital components and strategic management accounting practices (H2) 117 6.4 Empirical results – testing of the direct correlations between strategic management accounting practices and corporate performance (H4) 120 6.5 Empirical results – testing of the direct correlations (H3) and indirect correlations between intellectual capital components and corporate performance (H5) 121 6.6 Empirical results – testing of the associations of strategic management accounting practices and intellectual capital components (H6) 127 6.7 Empirical results – testing of control variables .130 SUMMARY OF CHAPTER .132 CHAPTER 7: IMPLICATIONS FOR MANAGING INTELLECTUAL CAPITAL BY STRATEGIC MANAGEMENT ACCOUNTING PRACTICES .133 7.1 A discovery of three-stage value-creating process 133 7.2 Implications for the management, policy and research of intellectual capital 135 7.2.1 Recommendations for leaderships 135 7.2.2 Recommendations for policymakers .137 7.2.3 Recommendations for academic communities .139 7.3 Implications for integration of strategic management accounting practices into intellectual capital management 140 7.3.1 Orientations to manage intellectual capital by strategic cost management 140 7.3.2 Orientations to manage intellectual capital by competitor accounting 142 7.3.3 Orientations to manage intellectual capital by strategic accounting .145 7.3.4 Orientations to manage intellectual capital by customer accounting .147 SUMMARY OF CHAPTER .150 CONCLUSION 151 Summary of research findings 151 Theoretical contributions 152 Practical managerial contributions 153 Limitation 155 Further research directions .156 LIST OF THE AUTHOR’S PUBLICATIONS 158 REFERENCES .161 APPENDIX 1: PREVIOUS STUDIES INVESTIGATING THE RELATIONSHIP BETWEEN IC AND CORPORATE PERFORMANCE 185 APPENDIX 2: REVIEW OF PRIOR INTERNATIONAL STUDIES OF STRATEGIC MANAGEMENT ACCOUNTING 188 APPENDIX 3: PREVIOUS STUDIES INVESTIGATING THE RELATIONSHIP BETWEEN STRATEGIC MANAGEMENT ACCOUNTING AND CORPORATE PERFORMANCE 192 APPENDIX 4: ELEMENTS OF HUMAN CAPITAL IN INTELLECTUAL CAPITAL REPORT 195 APPENDIX 5: ELEMENTS OF STRUCTURAL CAPITAL IN INTELLECTUAL CAPITAL REPORT 197 APPENDIX 6: ELEMENTS OF RELATIONAL CAPITAL IN INTELLECTUAL CAPITAL REPORT 199 APPENDIX 7: DESCRIPTIONS OF SMA TECHNIQUES .201 APPENDIX 8: CATEGORIZATION OF THE IC MEASUREMENT METHODS UNDER MARKET CAPITALIZATION MODEL 205 APPENDIX 9: CATEGORIZATION OF THE INTELLECTUAL CAPITAL MEASUREMENT METHODS UNDER RETURN ON ASSETS MODEL 208 APPENDIX 10: CATEGORIZATION OF THE IC MEASUREMENT METHODS UNDER DIRECT IC MODEL .210 APPENDIX 11: CATEGORIZATION OF THE INTELLECTUAL CAPITAL MEASUREMENT METHODS UNDER SCORECARD MODEL 213 APPENDIX 12: INDICATORS FOR REFLECTIVE MEASUREMENT OF SMA CONSTRUCTS 215 APPENDIX 13: SURVEY FORM IN ENGLISH .218 APPENDIX 14: SURVEY FORM IN VIETNAMESE 224 APPENDIX 15: CRONBACH ALPHA AND EFA RESULTS OF THE INDICATORS OF SMA CONSTRUCTS 230 .. .MEDIATING EFFECT OF STRATEGIC MANAGEMENT ACCOUNTING PRACTICES IN THE RELATIONSHIP BETWEEN INTELLECTUAL CAPITAL AND CORPORATE PERFORMANCE EVIDENCE FROM VIETNAM Trinh Hiep Thien... studies investigating the relationship between strategic management accounting practices and corporate performance 24 1.3 Review of studies of intellectual capital and strategic management accounting. .. management accounting practices and corporate performance More importantly, it investigates the mediating effect of strategic management accounting practices on the relationship among intellectual capital