Factors influencing domestic consumption in vietnams market

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY  CAO QUỐC VIỆT FACTORS INFLUENCING DOMESTIC CONSUMPTION IN VIETNAM’S MARKET MASTER’S THESIS IN BUSINESS ADMINISTRATION Ho Chi Minh City – 2012 i MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY  CAO QUỐC VIỆT FACTORS INFLUENCING DOMESTIC CONSUMPTION IN VIETNAM’S MARKET MASTER’S THESIS In Business Administration Code: 60340102 Supervisor Dr Nguyễn Thị Mai Trang Ho Chi Minh City – 2012 ii Acknowledgements When I write these statements, it reminds me to turn back the time of two years ago; as I read the book “Nghiên cứu khoa học Marketing - Ứng dụng mơ hình cấu trúc tuyến tính SEM”, I could not understand anything It is a mysterious world that I need to discover It was also the start point for my study road My sincere thanks send to the authors who have composed this wonderful book I would like to thank my supervisor Dr Nguyen Thi Mai Trang for her supports, instructions, and valuable comments throughout the work leading to this thesis I would like to thank all respondents who gave me priceless time during the data collection phase of this thesis I never forget my thanks to Mr Nguyen Khanh Duy with his first SEM Vietnamese book My deep thanks to my wife, Tsằn Schếng Mỹ, and our son; their love is the motivation behind my work Thanks to my family, my Mother, Father, brothers and sister Thanks God bless and lead me iii Declaration I declare that the entirety of the work contained therein (except the citations) is my own work I declare that I am the only author and neither portion in the thesis has been submitted in support of another degree nor published by another person HoChiMinh City, 10/10/2012 Cao Quoc Viet iv Abstract The purpose of this thesis is to investigate domestic consumption The aim is to examine factors which influence the domestic consumption among consumers in Vietnam Furthermore, the research focuses on finding out determinant that influences domestic consumption the most Based on Vida and Reardon’s Model and literature review a theoretical model was proposed The model investigates the effect of some independent variables on the domestic consumption such as import product quality perception, consumer ethnocentrism, cosmopolitanism and patriotism A survey of 396 consumers was carried out Some techniques were used to analyze the model, such as descriptive statistics, reliability assessment, exploratory factor analysis and confirmatory factor analysis The proposed theoretical model was also empirically tested by means of the structural equation modeling technique The results show that only cosmopolitanism was insignificant factor The findings indicate that import product quality perception, consumer ethnocentrism, patriotism are significant predictors of domestic consumption Key words: domestic consumption, consumer cosmopolitanism, import product quality perception ethnocentrism, patriotism, AMOS CET CFA CFI CMIN CMIN/df COS DC EFA FDI GFI IPQP KMO ML OALD PAT RMSEA SEM TLI vi Table of Contents Acknowledgements ii Declaration iii Abstract iv List of Acronyms v Chapter 1: INTRODUCTION 1.1 Research background 1.2 Problem statement 1.3 Research objectives 1.4 Scope and Research methodology 1.4.1 Scope of the study 1.4.2 Research Method 1.5 Structure of the research Chapter 2: LITERATURE REVIEW 2.1 Introduction 2.2 Domestic Consumption (DC) 2.3 Import Product Quality Perception (IPQP), Consumer Ethnocentrism (CET), Patriotism (PAT) and Cosmopolitanism (COS) 2.3.1 Import Product Quality Perception (IPQP) 2.3.2 Consumer Ethnocentrism (CET) 2.3.3 Patriotism (PAT) 2.3.4 Cosmopolitanism (COS) 2.4 Hypothesis development and Research Model 2.4.1 Import Product Quality Perception (IPQP), Consumer Ethnocentrism (CET) and Domestic Consumption (DC) 2.4.2 Cosmopolitanism (COS), Patriotism (PAT) and Consumer Ethnocentrism (CET) 2.4.3 Patriotism (PAT) and Domestic Consumption (DC) vii 2.4.4 Research Model Chapter 3: METHODOLOGY 11 3.1 Introduction 11 3.2 Research design 11 3.2.1 Pilot study 13 3.2.1.1 Qualitative research 13 3.2.1.2 Quantitative research 13 3.2.1.3 Pilot study results 15 3.2.2 Official Quantitative research 3.2.2.1 Sample 3.2.2.2 Data analysis methods 18 18 19 3.3 Measurement 19 3.3.1 Scale to measure Consumer Ethnocentrism (CET) 20 3.3.2 Scale to measure Import Product Quality Perception (IPQP) 21 3.3.3 Scale to measure Patriotism 21 3.3.4 Scale to measure Cosmopolitanism 23 3.3.5 Scale to measure Domestic Consumption 23 3.4 Summary 24 Chapter 4: DATA ANALYSIS AND FINDINGS 25 4.1 Introduction 25 4.2 Descriptions of sample 25 4.3 Scale assessment 26 4.3.1 Normality assessment 26 4.3.2 Reliability testing 27 4.3.3 Exploratory Factor Analysis 28 4.4 Confirmatory Factor Analysis (CFA) 31 4.5 Testing Theoretical Model 41 4.6 Testing Hypotheses and Summary 44 4.6.1 Testing Hypotheses 44 viii 4.6.2 Summary 46 Chapter 5: CONCLUSIONS AND IMPLICATIONS 47 5.1 Introduction 47 5.2 Discussion of findings 47 5.3 Managerial Implications 48 5.4 Limitations and Future research 50 List of References 52 Appendix 57 Appendix Refrigerator statistics Vietnam 2005 - 2010 57 Appendix 3.1 Group discussion 59 Appendix 3.2 English Questionnaire 62 Appendix 3.3 Bảng câu h ỏi khảo sát 66 Appendix 4.1 Descriptive Statistics 71 Appendix 4.2 Cronbach’s Alpha 72 Appendix 4.3 EFA 75 Appendix 4.4 CFA results 77 Appendix 4.5 Theoretical Model 85 ix LIST OF FIGURES Figure 2.1: Theoretical Model 10 Figure 3.1: Research procedure 12 Figure 4.4: Saturated Model 34 Figure 4.5: Refined Saturated Model 35 Figure 4.6: Final Saturated Model 37 Figure 4.7: SEM’s Result - Theoretical Model (Standardized) 41 88 e6 PAT e14 e13 e12 e11 e10 COS e18 e17 e16 e15 e22 e21 e20 e19 e24 e23 Variable counts (Group number 1) Number of variables in your model: Number of observed variables: Number of unobserved variables: Number of exogenous variables: Number of endogenous variables: Parameter summary (Group number 1) Fixed Labeled Unlabeled Total Notes for Model (Default model) Computation of degrees of freedom (Default model) Number of distinct sample moments: Number of distinct parameters to be estimated: Degrees of freedom (210 - 50): 89 Result (Default model) Minimum was achieved Chi-square = 321.798 Degrees of freedom = 160 Probability level = 000 Estimates (Group number - Default model) Scalar Estimates (Group number - Default model) Maximum Likelihood Estimates Regression Weights: (Group number - Default model) CET CET DC DC DC CET5 CET4 CET2 IPQ IPQ IPQ IPQ PAT5 PAT4 PAT3 PAT2 PAT1 COS4 COS3 COS2 COS1 90 DC4