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MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY µ SUMMARY OF PH.D THESIS CORPORATE SOCIAL RESPONSIBILITY OF FDI ENTERPRISES IN VIETNAM, GIVEN ISSUES AND SOLUTIONS Major: International economics Code number: 9.31.01.06 TRAN NGOC MAI Hanoi – 2020 THE THESIS IS COMPLETED AT FOREIGN TRADE UNIVERSITY Scientific Instructor: Assoc Prof Ph.D Vu Chi Loc Reviewer 1: Reviewer 2: Reviewer 3: The Thesis will be defended in front of the Thesis Council meeting at university–level at Foreign Trade University At hour date month year The Thesis can be referred at: - National Library of Vietnam - Library of Foreign Trade University THE LIST OF PUBLISHED PAPERS Tran Ngoc Mai (2020), Corporate social responsibility in the context of international free trade, Economy and Forecast Review, No.25 (738), pp 17-20 Tran Ngoc Mai (2020), Applying 2-stage DEA model to evaluate the corporate social responsibility implementing efficiency of FDI firms, Management Science Letters, 10 (2020), pp 2491-2500 Tran Ngoc Mai (2019), Current states of implementing social responsibility for the stakeholders of FDI firms in Vietnam, Economy and Forecast Review, No.15 (697), pp 42-46 Tran Ngọc Mai (2018a), Stakeholders’ implementations of CSR to enhance corporate reputation: the case of 208 foreign-invested enterprises in Hanoi, External Economics Review, No 15 (697), pp 42-46 Tran Nguyen Hop Chau, Tran Ngoc Mai (2018b), Social responsibility of FDI firms in business strategy - practice in Vietnam, Science Research Project at the institutional level, Banking Academy INTRODUCTION The urgency of the theme: Originating from developed countries, corporate social responsibility (CSR) has reached developing countries and Vietnam is no exception, especially in global integration and competition The concept of CSR in Vietnam is often viewed from the perspective of the Government That is, CSR is often viewed as the requirements from the Government that businesses need to be responsible for the locality where they operate In this approach, businesses implement CSR passively, and in the perspective of complying with legal regulations However, many studies have shown that implementing CSR proactively can bring many benefits for businesses, such as improving employee productivity, loyalty, operational efficiency, reputation, and relationships with business stakeholders so companies should approach CSR proactively The proactive implementation of CSR helps businesses satisfy the host government's requirements and helps companies achieve development and other strategic goals Therefore, this Thesis approaches the concept of CSR not only from the government’s perspective (complying with the laws), but also from the business's perspective, recognizing social responsibility as a tool that companies can use to manage relationships with stakeholders Among various the business's strategic goals, maintaining and improving the reputation seems to be of the utmost importance Reputation is the goal and an intermediate step to help the company achieve all of its remaining goals A business with a good reputation will help build trust with customers, partners, and the Government, thereby making business operations more effective and easier to achieve goals in sales, market, and finance CSR is not a new concept but is becoming increasingly popular in enterprises globally (KPMG, 2015; Porter, 2006; Reid & Toffel, 2009) CSR's development has always been in line with expanding FDI inflows into developing countries in the 1990s (Goyal, 2005) The participation of FDI enterprises has positive effects on the host country, reflected in the addition of capital to the total national investment capital in order to achieve economic growth targets; contribute to improving the general balance of payments through a straight increase in the balance of capital; create conditions for countries to access new technologies, promote technology transfer, and at the same time improve management skills, production, and qualifications of employees (Cao Thi Hong Vinh, 2016) However, despite receiving many incentives from host country, FDI enterprises are posing many pressing environmental and social problems to the country such as environmental pollution, violation of business ethics, lack of responsibility for the safety and security of the community These problems require economic entities, especially FDI enterprises, to solve; otherwise, economic development itself will be unsustainable and will be paid off Therefore, FDI enterprises need to be aware of their responsibility for the sustainable development of the countries in which they invest In other words, the activities of FDI enterprises and profit purposes need to be associated with the implementation of CSR through good tax obligations, environmental protection, ethical treatment of employees, consumers and other community Currently, Vietnam is participating in signing many new free trade agreements (FTA) Many of which deal with different aspects of CSR Therefore, CSR of FDI enterprises to the host country is a mandatory factor in the integration context FDI enterprises play a huge role for host countries, especially developing and transition economies like Vietnam However, research on CSR is mainly conducted in developed countries, and quite limited in developing countries CSR theories, CSR concepts in the world cannot be applied mechanically to the situation of developing countries or Vietnam due to differences in culture, governance mechanisms and economic characteristics Therefore, the impacts, relationships or results of this topic have not been fully verified and evaluated, bringing difficulties for researchers and managers Therefore, the study of CSR for FDI enterprises in developing countries is even more important than ever In the context of sustainable development, businesses all over the world are interested in CSR implementation As a group of enterprises with certain advantages, FDI enterprises always focus on implementing CSR and consider it one critical factor affecting the firm's sustainable development Therefore, a study of "Corporate social responsibility of FDI enterprises in Vietnam, given issues and solutions" is necessary to analyze the CSR implementation of FDI enterprises and propose some solutions to improve this group's CSR performance in the coming time Objectives of the research, Questions and Tasks of the study: Objectives of the study: The research objective of the Thesis is to study the CSR implementation of FDI enterprises in Vietnam, point out some issues and propose solutions to improve and promote the CSR implementation of FDI enterprises in the coming time to 2030 Study questions: What is the concept of CSR in the Vietnamese context? In which contents are FDI enterprises in Vietnam performing CSR? 3 Who are the main, most important and particular stakeholders of FDI enterprises? How is the current situation of CSR implementation of FDI enterprises in Vietnam in the period 2010 - 2020? What are the remaining problems? What is the cause of those problems? What solutions can be taken to improve CSR performance of FDI enterprises in Vietnam? Study tasks: To carry out experimental studies to achieve the research objectives and answer the research questions, specific tasks have been identified as follows: (i) Systematize and supplement the theory of corporate social responsibility (identifying the content, stakeholders and the need for research on CSR of FDI enterprises) (ii) Analyze and evaluate the current situation of the CSR implementation of FDI enterprises in Vietnam (iii) Analyze the CSR performance by using questionnaires to study the impact of performing CSR on different FDI enterprises' stakeholders on the reputation of the business (iv) Propose solutions to improve the CSR performance of FDI enterprises in Vietnam Objects and scope of the study: 3.1 Study objects: The Thesis studies the CSR implementation of FDI firms in Vietnam 3.2 Study scope: - Regarding space: the CSR implementation of FDI enterprises in Vietnam - Regarding time: The Thesis studies the CSR implementation of FDI enterprises in Vietnam from 2010 to 2020 This is the time when the quantity and diversity of FDI flows into Vietnam is the most significant, contributing a large part to the economic growth of our country Also, in this period, Vietnam has signed and implemented a new generation FTAs such as CPTPP and EVFTA, two agreements with a high level of commitment with many CSRrelated contents Therefore, CSR of FDI enterprises in this period will have important significance due to their high representativeness and suitability to the integration context Primary data is collected in the period 2016-2020, so the research results on the implementation of social responsibility of FDI enterprises in Vietnam have practical and theoretical value and can be used as reference in the coming years Regarding content: The Thesis studies on the CSR implementation from both the business and the Government perspective The Government approach views CSR as the compliance of the laws The business approach claims that businesses need to pursue the active and strategic CSR implementation to achieve specific goals, rather than a passive approach, in terms of complying with legal provisions as before Thoroughly researching both approaches helps the research results get the most comprehensive assessment of the company's CSR implementation Besides, because the scope of CSR of FDI enterprises is quite large, the PhD student only focuses on the current situation, the results of the CSR implementation for various stakeholders and its impact on reputation from 2010 to 2020 On that basis, the PhD student also assesses the positives and limitations of the implementation results and identify the underlying causes of the limitations, then propose appropriate and practical solutions to promote CSR activities in the coming time, especially in the current context (from 2020) as the amount and magnitude of FDI inflows pouring into Vietnam are on the rise Study method: 4.1 Data source: * Secondary data: The documents used for reference in the Thesis include: Statistical figures and data on research projects, reports and papers on CSR of FDI enterprises in Vietnam done by individuals and organizations of domestic and foreign authors The statistics are taken for the period from 2010 to 2020 * Primary data Primary data is collected through questionnaire survey method, investigating FDI enterprises in the territory of Vietnam - The information in the questionnaire: The PhD student built a questionnaire to learn about the CSR performance of FDI enterprises in Vietnam for four important stakeholders including: Government, employees, customers and the community Besides, the PhD student also surveyed the enterprises' assessment on its reputation Primary data is used for two purposes (1) for descriptive statistical research, analyzing the current situation of the CSR implementation of FDI enterprises to four important stakeholders of enterprises and (2) run econometric model to analyze the results and impacts of the CSR performance on the reputation of the business 4.2 Study method * Method of collecting data: To collect secondary data, the PhD student uses this method to search and synthesize from sources such as books, newspapers, magazines, scientific conference proceedings, general reports of the Ministry of Planning and Investment, Vietnam Chamber of Commerce and Industry (VCCI), Central Institute for Economic Research (CIEM), university research topics, websites of industry agencies and businesses as well as of domestic and foreign articles The data collected by this method is used to study the rationale and evaluate the current situation of CSR performance of FDI enterprises in Vietnam - Method of survey: PhD student uses this method to collect primary data, serving in-depth assessment in the research field + Study Sample: To the research, the PhD student conductes a survey with the sample number of 500, the subjects surveyed are business owners, CEO, the head of the strategic department of FDI enterprises The number of samples collected are 233, reaching the rate of 46.6% Due to the limited time as well as the budget for the implementation of the Thesis, the PhD student uses a convenient - non-probability sampling method + Objects of the survey: business owners, CEO, heads of strategic divisions of FDI enterprises in the territory of Vietnam These people are knowledgeable about the functions, tasks and activities of the business, so their answers will be most representative + The survey was conducted in April 2018 As a result of the postcleansing survey, 208 survey samples are obtained to conduct DEA analysis using DEAP 2.1 software, exploratory factor analysis (EFA) and regression using SPSS 22 software * Method of data analysis The Thesis uses a combination of study methods such as: - Qualitative method: The PhD student uses statistical, descriptive, analytical and synthetic methods to analyze the secondary data The assessment of the current situation of CSR implementation is also based on various reports, domestic and foreign research papers and projects in recent years - Quantitative Method: +) The PhD student uses data analysis software tool including DEAP 2.1 and SPSS 22 to synthesize and analyze the primary data with criteria such as number of average, frequency, percentage to describe the current situation of implementing CSR and evaluate the performance in association with important stakeholders including the Government, employees, customers and the community of FDI enterprises in Vietnam +) The PhD student uses DEA method to analyze the efficiency of the CSR implementation responsibility of FDI enterprises in Vietnam +) The PhD student uses the method of checking the reliability of scale (Cronbach's alpha factor), Exploratory Factor Analysis (EFA) method, and then performs multi-linear regression to see if there is a linear relationship between a single dependent variable (Reputation) and different independent variables (influencing factors) to estimate and test the CSR implementation for different stakeholders (each stake holder is an independent variable) affecting the corporate reputation of FDI enterprises in Vietnam Structure of the theme: Apart from lists of tables, acronyms, conclusions, appendices, references, the Thesis is structured in five chapters as follows: - Chapter Overview of study situation related to the Thesis - Chapter Theoretical foundation about corporate social responsibility of FDI enterprises - Chapter Current situation of implementing corporate social responsibility of FDI enterprises in Vietnam - Chapter Solutions to improve corporate social responsibility performance of FDI firms in Vietnam CHAPTER OVERVIEW OF STUDY SITUATION RELATED TO THE THESIS 1.1 Foreign study situation Studies on CSR over time have had significant changes, shifting from the macro level (considering the relationship of CSR with the economic development of a country and society) to micro level (considering the relationship of the CSR with business aspects such as stakeholders or the firm's financial and non-financial goals) Studies have shifted from seeing CSR as a research object within the enterprise's external environment (CSR and its stakeholders) to seeing CSR as a research object within the corporate internal environment (CSR is a resource of the business, the relationship between CSR and the enterprise's goals) Studies have also shifted from seeing CSR as an obligation to actively pursuing the CSR strategy to achieve corporate goals There are many foreign studies on CSR for a variety of stakeholders such as CSR for Government (Skare & Golja, 2014), CSR for employees (Turban and Greening 1997; Tsoutsoura, 2004 , Bauman and Mashruwala, 2007; Kang, 2009; Wieseke, et al., 2009; Carroll & Shabana, 2010; DeTienne, Agle, Phillips, & Ingerson, 2012; Solomon and Hanson, 1985; Lee et al., 2012), CSR for customers (Sen and Bhattacharya, 2011; Shapiro, 1983; Luo & Bhattacharya, 2006; Saei et al., 2015; Fatma and Rahman, 2016; Karaosmanoglu et al., 2016, Carroll & Shabana, 2010) and CSR for community (Okeudo, 2012) These studies mainly focus on domestic firms, there are very few studies focusing on FDI enterprises and mainly based on available secondary data from CSR reports of corporations with little use of primary data One of the outstanding benefits that CSR brings to businesses is that CSR has the ability to enhance the corporate reputation However, most research on CSR and corporate reputation focuses on the customer base, ignoring other important business stakeholders Research focuses on CSR's impact on customers (perceptions, loyalty of customers) and only a few studies on CSR's impact on corporate reputation In this research, the PhD student studies CSR for a group of four important business stakeholders including Government, employees, customers and the community The selection of this stakeholder group is a new feature of the study Next, the PhD student conducts research into the impact of CSR implementation on the enterprise's reputation, which is also a small research direction that has not yet been developed in globle CSR studies 1.2 Domestic study situation There are quite a few studies on CSR in Vietnam depicted in books, textbooks, dissertations, articles, etc (by authors such as Pham Van Duc (2010), Hoang Thu Thuy (2016), Nguyen Thi Kim Chi (2016), Chau Thi Le Duyen and Nguyen Minh Canh (2013), Dung Phuong Hoang (2017), Hoang Thi Thanh Huong (2015), Le Thi Huong (2017), Mai Lan Phuong et al (2016), Nguyen Dinh Long and Doan Quang Thieu (2009), Nguyen Thi Kim Anh & Nguyen Thi Minh Hoa (2018), Nguyen Thi Minh Chau (2013), Nguyen Thu Linh et al (2008), Tran Dinh Phung et al (2019), Tran Thi Minh Hoa and Nguyen Thi Hong Ngoc (2014), Nguyen Thi Phuong Thao et al (2019), Tran Thi Nhinh (2020), Hoang Hai Yen (2016), Tran Nguyen Hop Chau et al (2018)) These domestic authors have carried out researches on CSR and the relationship with stakeholders and make recommendations to promote and create benefits for businesses However, these studies often focus on one particular audience Experimental studies in Vietnam use two main research methods: qualitative and quantitative The research using qualitative methods is deployed in the form of case studies, expert interviews, in-depth case studies of a company, an industry or a locality These studies mainly assess CSR implementation in areas such as tax obligations, labor, environmental and social issues Despite the positive contributions to local socio-economic development, the CSR implementation in Vietnam is still very limited Quantitative studies have not given consistent results due to their narrow scope, limited sample or only research for a certain industry; Research content is not comprehensive, there is no clear definition for target factors and impact factors The explanation of the relationship in the model has not had 14 The model analyzes the impact of CSR performance for stakeholders of FDI enterprises on corporate reputation is determined by the linear regression form with the following equation: REP = β0 + β1.CUS + β2.LAB + β3.GOV + β4.COM + ε In which: REP: dependent variable, representing the reputation of the business β0: intercept, which is constant β1, β2, β3, β4: regression coefficients corresponding to independent variables CUS, LAB, GOV, COM are independent variables, corresponding to the stakeholders of FDI enterprise: CUS is the CSR for the customer; LAB is CSR for labor; GOV is CSR to the Government; COM is CSR to the community ε: error CHAPTER CURRENT SITUATION OF CORPORATE SOCIAL RESPONSIBILITY IMPLEMENTATION OF FDI ENTERPRISES IN VIETNAM, GIVEN ISSUES 3.1 General information about FDI enterprises in Vietnam 3.1.1 Characteristics of FDI enterprises in Vietnam Foreign direct investment (FDI) in Vietnam has increased dramatically since Vietnam joined the World Trade Organization (WTO) in 2007 Especially after Vietnam signed and joined a series of Free trade agreements (FTA), Vietnam has become a large open economy (reaching more than 200% of GDP in 2018) After more than 30 years of opening, integrating and reforming the business environment, Vietnam has become an attractive destination for foreign investors FDI inflows into Vietnam have increased sharply and diversified according to investment partners, sectors, and the amount of signed capital and implemented capital improved over the same period of the years 3.1.2 The role of FDI enterprises in Vietnam Firstly, FDI supplements an important source of capital for the national economic development Secondly, FDI capital plays an important role as the driving force for Vietnam's GDP growth and contributes significantly to the state budget revenue Third, FDI enterprises play an important role in increasing the proportion of domestic exports, expanding foreign relations and increasing international economic integration 15 Fourthly, FDI enterprises contribute significantly to the growth of labor productivity Fifth, FDI has created a technology spillover effect, contributing to improving the level of technology through technology transfer Sixth, FDI has promoted economic restructuring towards modernization 3.1.3 Policies and achievements to attract FDI in Vietnam 3.1.3.1 Policies to attract FDI in Vietnam The attraction of investment capital from abroad is concretized through the provisions of the legal documents These include: Law on Investment 2014, Law on Corporate Income Tax 2008 amended and supplemented in 2013, Law on Import and Export Tax 2016, and other guiding documents Specifically, the current investment incentives to attract FDI are: import tax exemption or reduction, corporate income tax or land lease at preferential prices 3.1.3.2 Achievements in attracting FDI in Vietnam In recent years, thanks to investment incentives, the profit from FDI attraction has increased significantly According to a report by the Foreign Investment Agency, within the first four months of 2020, registered FDI capital has increased over the same period in 2016 to 2018 Also in the first months of 2020, FDI capital has flowed into 18 industries and business fields, especially in the field of processing and manufacturing with investment capital of nearly billion USD The country leading in the rate of investment capital in Vietnam is Singapore, followed by Thailand and Japan Although recently, Vietnam's economy has been seriously affected by the Covid-19 pandemic, the proportion of foreign capital flow into Vietnam has increased 3.2 Current status of implementing CSR of FDI enterprises in Vietnam 3.2.1 Current status of implementing CSR for the Government (1) Responsibility to pay taxes: Contrary to the greatest profit margins, FDI enterprises have the lowest contribution to the state budget This shows that FDI enterprises in particular are still not really aware of the issue of tax obligation fulfillment - implementing the legal aspect of CSR (2) Responsibility to comply with the law in the host country: +) Many FDI enterprises have not seriously implemented commitments in the contract, have violated the interests of workers, leading to many labor disputes +) FDI sector has also created many negative effects on the country's sustainable development, in particular the negative impacts on the ecological environment causing damages to the property and health of the community 3.2.2 Current status of implementing CSR for the labor 16 (1) Responsibility to pay worthy salaries: Basically, FDI enterprises have performed well CSR in paying adequate wages to their employees FDI enterprises pay special attention to employees' treatment and attraction, especially those with high professional qualifications (reflected in the highest salary that enterprises pay to their employees) (2) Responsibility to protect employees 'interests: Some FDI enterprises still have shortcomings in building relationships with employees, affecting employees' interests (3) The responsibility of training to improve the quality of human resources: FDI enterprises are very interested in and spend a lot of money on training and building human resources to improve the quality of labor, thereby improving productivity, quality and efficiency The provision of many training opportunities for employees is assessed as content outside of the legal obligation, reflecting the firm's CSR to a higher level in Carroll's (1991) model, which is an ethical aspect (4) Responsibility to build a safe and effective working environment: According to the authorities, in ensuring occupational safety at enterprises, FDI enterprises perform better than local enterprises due to better financial potential For multinational corporations, they always have a set of safety work standards to follow 3.2.3 Current status of implementing CSR for the customer (1) Responsibility to supply products and services: Customers are the most important strategic partners of the business, determining the growth rate, revenue, profitability and success of the business Therefore, in providing products and services, most businesses have done well their distribution role, in order to bring products and services to customers, thereby bringing in revenue for the company (2) Responsibility to protect consumers: For the quality of products and services and to ensure customers' safety, many businesses have let a series of events occur such as food that not ensure hygiene and safety and cause negative consequences to customers 3.2.4 Current status of implementing CSR for the Government (1) Responsibility to protect the environment: Many FDI enterprises consider CSR with the environment a "burden" or just a way of marketing, creating an image to benefit businesses (2) Responsibilities for local community development: FDI enterprises coming from developed countries should understand this issue very well, and they are always the pioneer in charity programs 3.3 Result of research models on the implementation of social responsibility of FDI enterprises 17 3.3.1 Survey sample and statistical result of survey sample 3.3.1.2 Survey sample The question is designed for managers and directors working in FDI enterprises operating in the territory of Vietnam The questionnaire was then posted online to the Google Form survey system and supported by the Department of Planning and Investment and the Hanoi Tax Department in accessing the surveyed businesses According to the sampling principle, the number of survey samples is calculated by the formula: N = * m (Comrey, 1973; Hoang Trong & Chu Nguyen Mong Ngoc, 2005; Hair, Anderson, Tatham and Black, 2010) In which: N is the sample size, m is the number of questions in the survey With 36 parameters (controlled variables) that need factor analysis, the necessary minimum sample size for the Thesis is: N = * 36 = 180 PhD student issued 500 survey forms and collected 233 returning samples, including 208 valid samples, which were greater than the required minimum number of samples, ensuring reliability, stability when analyzing and evaluating 3.3.1.2 Scale encryption * The dependent variable is the reputation of the business * Independent variable includes groups of CSR activities corresponding to main stakeholders that businesses focus on implementing CSR including Government, labor, customer, community The PhD student proceeds to build scales for each variable based on the theory in Chapter and encodes the variables according to the 5-level Likert scale in Table 3.3 3.3.1.3 Statistical results of survey form Among 208 surveyed FDI enterprises, the majority of enterprises in the manufacturing and trade sectors are 21.63% and 20.67% respectively In terms of labor size of enterprises, mainly small enterprises with 10 to 100 employees (accounting for 44.23%) and micro enterprises with less than 10 employees (accounting for 37.5%) This survey results are quite close to the actual labor size of FDI enterprises According to Table 3.4 3.3.2 Results of statistical analysis of independent variables 3.3.2.1 CSR for the Government The survey results show that most of the FDI enterprises operating in Vietnam's territory have good compliance with the state regulations on labor safety, working environment conditions, and paying social insurance premiums Full and proper unemployment insurance for workers, compliance with environmental regulations and environmental protection, full tax payment, good 18 implementation of corporate legal responsibilities (over 80% of businesses FDI industry confirmed yes with the given criteria) However, the standard deviation is quite large, showing that besides many enterprises performing well CSR for the Government, few enterprises have not done well 3.3.2.2 CSR for labor In terms of ethics, CSR for employees is placed on a higher ladder than purely legal compliance, and FDI enterprises surveyed are very interested in training to improve their employees' capacity Notably, 64.42% of enterprises confirmed that they had a centralized database on company human resources, which is a prerequisite for using employees as well as implementing employeerelated programs in a reasonable and effective manner However, the standard deviation is quite large, showing that besides many enterprises performing well CSR for employees, few enterprises have not done well 3.3.2.3 CSR for customer Survey results show that FDI enterprises operating in the Vietnam territory have paid attention and performed CSR for consumers very well Because they understand that consumers are the critical part in the business strategy of the business The trust of customers is the success and sustainable development of the business 3.3.2.4 CSR for community Most of the FDI enterprises operating in Vietnam's territory have a relatively good sense of CSR for the community However, only 58.17% of enterprises have certificates of sustainable development; 60.57% implement activities for the community; 74.03% use environmentally friendly production technology The reason may be that the respondents are mainly small and micro enterprises with limited financial capacity, so they cannot perform many CSR at the highest level in the Carol model (1991) In general, businesses are aware of the benefits of implementing CSR to the community in preventing the loss of compensation and overcoming costs and helping businesses preserve and improve the company's image, creating trustworthiness, sympathy, and prestige Not only that, but officials and the Government are also very fond of businesses with a good history of environmental protection, consumer protection and charity work 3.3.2.5 Compare survey results and state inspection results The results of analyzing CSR implementation's current situation are based on secondary documents, mainly reports of state ministries, inspection results, official media, so the analytical results in this section will represent the Government approach 19 The survey's analytical results are primary data for the respondents of the survey are FDI enterprises, so the analytical results in this section will represent the enterprise approach The comparison results show that surveyed FDI enterprises have quite an optimistic assessment of their CSR implementation compared to the state reported results Specifically, in all contents, on average, FDI enterprises evaluate that they perform well CSR Also from the state's inspection point of view that, for the related parties, enterprises implementing CSR have both good implementation content and poor implementation content Specifically, FDI enterprises have not performed well CSR for the Government in both tax payment and compliance with legal regulations FDI enterprises have performed well CSR for employees in the content of worthy salaries and training to improve the quality of human resources However, it has not performed well CSR for employees to protect the interests of employees and build a safe and effective working environment FDI enterprises have performed well CSR for customers in the content of providing products and services, but have not performed well in consumer protection content FDI enterprises have performed well CSR for the community in the content of community development, but have not done well in the content of environmental protection 3.3.3 Results of DEA model Out of 208 FDI enterprises surveyed, four are rated to be effective with an optimal score of These four firms belong to the following industries: Logistics, ITC, Education, and Manufacture Furthermore, all four firms are micro and small-sized The average ES coefficient of all 208 FDI enterprises surveyed is 0.79 Enterprises with ES greater than 0.79 are those that perform CSR effectively Among 208 FDI enterprises, 95 enterprises (45.67%) are expected to implement CSR effectively (with ES> 0.79), the remaining 113 businesses are considered to be ineffective in implementing CSR Thus, FDI enterprises, in general, have not performed well CSR Logistics, Insurance, Service, Human Resource, Trade, and Agriculture are industries that perform CSR for labor, customer, government, and community better than the average and considered to be effective CSR implementation to improve reputation These industries can later be investigating further to determine the key to effective CSR implementation and establish a role model for other firms Education, Manufacture, Real Estate, Restaurant, Tourism, Construction, and Assembly are industries that perform CSR for labor, customer, government, and community lower than the average and considered to be ineffective CSR implementation 20 In terms of labor size, micro-enterprises (under 10 labors) perform the most effective CSR (ES = 0.8013), followed by large enterprises (above 1000 labors) (ES = 0.7951) Small and Medium-sized enterprises (From 10 to 1000 labors) perform ineffective CSR Micro firms have less than 10 labors Thus, it should be easier for them to manage the relationship with customers, labor, government, and community due to the small scale of operation, making them more effective at CSR implementation Large firms with above 1000 labors should have the financial ability to perform various CSR activities Besides, they get more attention from the public; therefore, doing CSR should help them secure their image and reputation Small and medium-sized enterprises take the most portion of the economy; however, it seems like they not perform CSR effectively Future researches should investigate further to find reasonable evidence behind this finding in order to improve the efficiency of small and medium-sized firms In term of years of operation, FDI enterprises operating from to 10 years have the highest CSR performance (ES = 0.7950), followed by young enterprises, under years of operation (ES = 0.7944) Enterprises operate above 10 years implement the least effective CSR (ES = 0.7792) Under years of operation are young firms, so that their main objective is to focus on their main activities and commercial purpose They have not yet paid so much attention to CSR implementation For 5-10 years of operation firms, their target is sustainable development; therefore, they spend more effort in implementing CSR in order to build corporate reputation Firms that operate more than 10 years probably have already established their reputation in the market; therefore, they can continue doing CSR for other purposes rather than improving reputation 3.3.4 Results of testing and regression analysis 3.3.4.1 Testing of scale reliability: Conducting Cronbach's Alpha test on independent and dependent variables, we see that all variables satisfy the condition that the total correlation coefficient is greater than 0.3 and had a Cronbach's Alpha (Cα) coefficient greater than 0.5 Cronbach's Alpha test of all groups of factors shows that Cronbach's Alpha coefficients are > 0.6 satisfactory, in addition, the total correlation coefficient is greater than 0.3 and Cronbach's Alpha coefficients of the variable are smaller than the satisfactory Cronbach's Alpha coefficient From there, we can conclude that the scale is suitable, accept all factors with 29 observed variables to include in the factor analysis model 3.3.4.2 Exploratory Factor Analysis (EFA) * For independent variables: 21 For EFA analysis, the PhD student uses the method of Principles Components with the revolution of Varimax factor The PhD student must perform the revolution method four times and remove some unsatisfactory variables (due to presence of multiple groups at the same time or non-presence in any group because the load factor is less than 0.5) The removal of variables is conducted as follows: The remaining variables include: CSR2, CSR8, CSR9, CSR10, CSR12, CSR15, CSR16, CSR17, CSR18, CSR19, CSR20, CSR21, CSR23, CSR24 * Re-performance of EFA and analysis of KMO coefficient and Bartlett test The EFA result shows that: The KMO coefficient of the model is 0.885 > 0.5; The sig coefficient in the Bartlett test (0.000) is less than 0.05, indicating the fit of the model, the variables in the model are interrelated; Load factor of all factors is greater than 0.5 Total variance of the model was 68.907% > 50% showing that the factors contain 68.907% of the number of initial variables, qualifying for EFA analysis * Rotation matrix of independent variables The factors after re-performing EFA generating groups The rotation matrix of independent variables is shown in Figure 4.22 * Implementation of taking representative variable: The PhD student re-statistics the number of variables of each group (a) Group – CSR for labor, Include elements: CSR15, CSR16, CSR17 (b) Group – CSR for customer, Include elements: CSR8, CSR9, CSR10 (c) Group – CSR for government, Include elements: CSR18, CSR19, CSR20 (d) Group – CSR for community, Include elements: CSR12, CSR21, CSR23, CSR24 3.3.4.3 Pearson correlation analysis Conducting the test of correlation among variables to measure the close correlation between variables reveals that the independent variables correlate closely with the dependent variable, with the coefficient r > 0.5 and significance level 1% The result of corporate reputation is impacted the most by CSR for community, followed by customers, employees and the Government The sig value (1-tailed) is less than 0.05, indicating a positive and statistically significant correlation between independent variables and dependent variables 4.4.4 Regression analysis and suitability assessment of regression model * Assessment of suitability of regression model 22 +) Based on the table of ANOVA analysis, the statistical significance F of the model has Sig value = 0.000 < 0.01, showing that new independent variables are associated with the dependent variable as well as explain the change of outcome variable The multiple linear regression model is suitable for the data set or the independent variables have a linear relationship with the dependent variable and the model can be used +) The adjusted R2 value of the model is 0.504, indicating that the independent variables have a 50.4% effect on the dependent variables +) The Durbin-Watson coefficient is also close to 2, ensuring the suitability of the model in measuring the factors that affect the dependent variable +) The value of VIF (variance inflation factor) of all independent variables is in the range of to This result shows that there is no multicollinearity phenomenon in the model * Regression model The PhD student uses multivariate regression and Stepwise method Based on the regression result, the independent variables have a positive relationship with the dependent variable The model is written under the following formula: REP = α+0.27*CUS+0.09*LAB+0.161*GOV+0.288*COM Research results show that corporate reputation is affected by the implementation of CSR for all four stakeholders The impact of the CSR implementation on each stakeholder on the corporate reputation is different when other factors remain constant Specifically, the implementation of CSR for the community has the strongest impact, followed by CSR implementation for the customer, then the implementation of CSR for the Government and finally the implementation of CSR for labor 3.4 Evaluation of the performance of CSR of FDI enterprises in Vietnam 3.4.1 Obtained result Firstly, FDI enterprises have paid attention to the treatment and attraction of laborers whose center is highly skilled labor, reflected in the highest salary that enterprises pay to their employees compared to other business groups Second, FDI enterprises have focused and provided many training opportunities for the host country workers to meet the higher demands of the production process Third, FDI enterprises have done a good role in providing products and services to customers Meeting customers' needs is always a top priority by 23 FDI enterprises because customers are important strategic business partners that determine the survival of the business Fourth, due to the large financial resources and the need to promote and build images, FDI enterprises are very active in implementing community development programs, contributing to improve the host country's sociocultural life Fifth, micro enterprises with less than 10 employees have performed well CSR to improve their reputation, followed by large enterprises with over 1000 employees Businesses with over years of operation have performed well CSR in order to improve their reputation 3.4.2 Given issues Firstly, there still exist many FDI enterprises using the "price transfer" mechanism and continuously declaring their business losses, causing damage to the state budget as well as creating the situation of untransparency and unfair competition between enterprises Second, the violation of labor and environmental regulations still exist among FDI enterprises In addition, many businesses are considering CSR for labor and the environment as a "burden" or just a way of marketing activities Third, there are still FDI enterprises that not pay enough attention to the issue of protecting the interests of employees Fourth, although FDI enterprises have more resources in building a safe and effective working environment for employees, there are still many insecurity and accidents to employees, causing serious consequences Fifth, FDI enterprises not pay enough attention to the issue of protecting consumers Developing country markets are predominantly low- to middle-income, so are price sensitive and often prioritize price criteria over sustainability criteria in terms of decision making Because of this feature, many for-profit businesses, despite violating the provisions of laws, regulations on safety and quality, affect consumers' health and interests In addition, the low awareness of the community and the sense of protecting the rights of the people leads consumers to accept the disadvantages without the struggle to claim benefits from businesses It can be said that, in front of big enterprises, especially foreign ones, consumers often feel indifferent, alone, lacking the support of the Government Sixth, environmental issue is also one of the most prominent issues and causes many frustrations in the society A series of events related to business operations and production causes serious environmental consequences such as discharge, causing water, air, noise, and land pollution In addition, many FDI projects put into outdated technology have not been self-conscious in 24 complying with environmental protection regulations, so there have been negative impacts on the environment Seventh, FDI enterprises lack of understanding or have an inaccurate and incomplete understanding of CSR contents Therefore, the enterprises themselves have tried to implement well CSR according to their knowledge and assessment, but have not met the the general regulations and standards Eighthly, FDI enterprises have introduced CSR concepts to Vietnam, so the CSR practices of FDI enterprises are expected to be higher than the domestic market However, in reality, many FDI enterprises violate the law regarding CSR contents such as environment, labor in Vietnam Ninth, there is a mismatch in reporting and investigation results While FDI enterprises have self-assessed themselves to perform relatively well the contents of CSR, state agencies' investigation results have discovered many mistakes Tenth, CSR implementation is mainly on a voluntary basis, so voluntary at which level is to be evaluated as performing well, there is still no specific measurement Eleven, many FDI enterprises have performed well CSR and have outstanding CSR achievements, but overall, the group of FDI enterprises have not performed well CSR as expected Most well-implemented CSR activities focus on "superficiality" such as charity, while core CSRs associated with corporate operations (such as CSR for labor, customer) are not done very well SMEs account for the majority in the economy, however, they have not implemented effective CSR to improve their reputation Besides, young businesses under 10 years of operation have not performed well CSR to improve their reputation 3.4.3 Causes of above given issues 3.4.3.1 Objective causes (i) The race to attract FDI at all costs (ii) The system of legal documents is incomplete, unclear, and overlapping (iii) The enforcement, inspection and supervision of functional agencies are weak (iv) The awareness of stakeholders is not sufficient and accurate: Government, employees, customers, Community (v) Associations and media involvement 3.4.3.2 Subjective causes (i) Enterprise's perception: not accurate, not paying enough attention to CSR issues 25 (ii) Consciousness of law observance: still passive, single, fragmented, spontaneous but has not been upgraded to a strategic activity (iii) Business characteristics: +) Most businesses are small and medium sized therefore have limited economic potential, lack of resources for CSR implementation +) Business strategy: Most enterprises operate according to their habits, practices and experience but have not actively approached CSR in a proactive orientation, leading to unsystematic, systematic and ineffective implementation of CSR CHAPTER SOLUTIONS TO IMPROVE CSR IMPLEMENTIATION OF FDI ENTERPRISES IN VIETNAM 4.1 Domestic and international socio-economic context toward CSR implementation of FDI enterprises in Vietnam 4.1.1 Domestic and international socio-political and social context * The US-China trade war affects FDI in China, and Vietnam has great potential to replace China's manufacturing role for multinational corporations aiming to consume production products in the US market * Vietnam signs and participates in many FTAs with higher commitments and has many provisions related to CSR contents, which shows the orientation of improving CSR implementation of FDI enterprises in member countries, promoting synchronization among countries * The trend of using CSR in branding comes from the fact that more and more customers are interested in sustainability issues and are willing to pay more for products and services of enterprises that put focus on CSR implementation * The trend of using CSR in corporate culture comes from the fact that more and more businesses publish CSR reports, showing their business activities in addition to profit targets also priotize the sustainable development * The global epidemic Covid 19 facilitates the movement of foreign investment flows, of which, Vietnam, with its successes in preventing the Covid 19 epidemic and the stability of the investment-business environment, has raised its stature, international position and image as a reliable partner, safe destination in the coming years 4.2 Objective and direction of improving CSR implementation of FDI enterprise in Vietnam 4.2.1 Objective of improving CSR implementation of FDI enterprise in Vietnam 4.2.1.1 General objective 26 (1) Develop a roadmap for Vietnam to attract "next generation" FDI, in order to continue to promote extensive economic growth in the period of 2018 - 2030 (2) Shifting focus from attracting the right investors to the right product for the type of investment that Vietnam needs in the future, thereby maximizing the spillover effect and added value of FDI (3) Among the major global trends affecting FDI over the next 12 years, signing in new generation FTAs is the most challenging and breakthrough step, likely to boost GDP growth and help Vietnam obtain a competitive advantage over competitors (including China) In that context, sustainable development challenges can be transformed into opportunities with strong determination to reform and balance relevant incentive mechanisms towards prioritizing economical use of energy, efficiency and renewable energy 4.2.1.2 Specific objectives to 2030 In order to achieve the goals of the Vietnam 2035 report, the following six key innovation requirements need to be addressed: Facilitate the modernization of the economy together with a competitive private economy; Improve the nation's scientific, technological, innovation and creative capacities; Urbanization policy reform for more dynamic cities; Building an environmental sustainable development roadmap to adapt and adapt well to all types of climate change; Enhancing social equity and inclusion for the disadvantaged; Build a modern and efficient rule of law state These reforms are built on three main pillars: Balance between economic prosperity and environmental sustainability; Promote equality and social inclusion; Strengthening the state's capacity and accountability 4.2.2 Orientation to 2030 (1) Promote the attraction of FDI according to the general planning of the sectors, focusing on the fields of high technology, environment-friendly and low energy consumption, the development and use of clean and renewable energy (2) Developing FDI in a sustainable manner with a focus on quality and efficiency of socio-economic development, ensuring national defense and security, and strengthening links with domestic enterprises (3) Ensuring food safety as a way to take responsibility for consumers' interests and health, Synchronous implementing the law provisions on food 27 safety, focusing on the inspection and examination, and promoting the application of advanced measures in food safety management, strengthening information and communication to create a profound change in the awareness of producers, consumers and the whole society on hygiene and food safety (4) Reducing the intensity of greenhouse gas emissions and promoting the use of clean and renewable energy; Greening production; Greening Lifestyles and promoting sustainable consumption 4.3 Several crucial solutions to improve CSR implementation of FDI enterprises in Vietnam 4.3.1 Group of macro solutions 4.3.1.1 Develop a comprehensive legal system and policies on social responsibility of FDI enterprises 4.3.1.2 Issue and implement policies to support businesses and encourage businesses in implementing CSR 4.3.1.3 Clearly specify responsibilities and strengthen coordination among authorities 4.3.1.4 Strengthen enterprise training on CSR 4.3.1.5 Strengthen communication about CSR 4.3.2 Group of micro solutions 4.3.2.1 Further raise and change FDI enterprises' awareness of CSR 4.3.2.2 Develop and follow an internal code of conduct 4.3.2.3 Develop a CSR implementation strategy 4.3.2.4 Include CSR in your business strategy 4.3.2.5 Enhance CSR performance for stakeholders to improve corporate reputation 4.4 Limitations and suggestions for future researches CONCLUSION FDI capital plays an important role in promoting Vietnam's economic growth Despite receiving a lot of incentives, the presence of FDI enterprises is associated with consequences for the environment and society In the context of sustainable development, businesses around the globe are interested in CSR implementation As a group of enterprises with certain advantages, when conducting international business activities, FDI enterprises need to focus on implementing CSR and consider it one of the important factors affecting longterm development Therefore, the PhD student chooses the topic "Corporate Social Responsibility of FDI enterprises in Vietnam, given issues and solutions" with the desire to recognize and evaluate the implementation of CSR of FDI enterprises, from which propose some solutions to improve the CSR implementation of this group in the coming time 28 From the results and evaluations of the Thesis, a number of conclusions can be drawn and new contributions as follows: The Thesis synthesizes and presentes an overview of the research situation of both domestically and internationally studies on CSR in general and CSR of FDI enterprises in particular On that basis, the PhD student draws research gaps in terms of both content and research methods The Thesis presentes the theoretical basis of CSR, CSR of FDI enterprises, factors affecting the implementation of CSR of FDI enterprises, the theoretical basis of the model to measure the implementation of CSR of FDI enterprises The Thesis analyzes the current situation of CSR implementation of FDI enterprises in Vietnam for stakeholders, corresponding to typical CSR contents associated with each stakeholders (in both approaches: state and enterprise) At the same time, the Thesis also analyzes the implementation of CSR for stakeholders including the Government, employees, customers and the community in order to improve the corporate reputation using DEA method, reliability test, exploratory factor analysis, multiple regression model based on the results of 208 questionnaires to analyze and evaluate the CSR implementation of FDI enterprises in Vietnam On that basis, the PhD student draws the results, the remaining problems and the reasons for the shortcomings in the implementation of CSR of FDI enterprises in Vietnam Data have a clear conductor origin On the basis of analysis and assessment of CSR implementation of FDI enterprises in Vietnam and goals and orientations of CSR implementation of FDI enterprises in the coming time, the Thesis proposes a system of high feasibility to improve CSR implementation of FDI enterprises in Vietnam The research results will be useful for researchers in building a theoretical framework on the subject of CSR, businesses and the Government in policy making and promoting CSR implementation in Vietnam The Thesis analyzes both the breadth and depth of the main contents related to CSR activities of FDI enterprises However, due to the rapid and complicated changes of the world and regional situation together with the changes of the country situation, CSR activities are constantly changing CSR research contents are required to be regularly updated to keep pace with the development of reality and the demand of innovation Due to the limited time as well as knowledge, the Thesis certainly still has many shortcomings The PhD student always welcomes comments, suggestions and discussion from the readers ... SITUATION OF CORPORATE SOCIAL RESPONSIBILITY IMPLEMENTATION OF FDI ENTERPRISES IN VIETNAM, GIVEN ISSUES 3.1 General information about FDI enterprises in Vietnam 3.1.1 Characteristics of FDI enterprises. .. about corporate social responsibility of FDI enterprises - Chapter Current situation of implementing corporate social responsibility of FDI enterprises in Vietnam - Chapter Solutions to improve corporate. .. study of "Corporate social responsibility of FDI enterprises in Vietnam, given issues and solutions" is necessary to analyze the CSR implementation of FDI enterprises and propose some solutions
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