Impacts of Environmental Certificate and Pollution Abatement Equipment on SMEs’ Performance: An Empirical Case in Vietnam

Jung-Fa Tsai,Duy-Van Nguyen,Ming-Hua Lin,Phi-Hung Nguyen,Hsu-Hao Lin,Anh-Tuan Ngo

doi:10.3390/su13179705

Abstract

Increasing global warming and intensity of disasters recently have made improving environmentally-conscious enterprises pivotal, as well as consumer demand for green products and the achievement of green strategies in some enterprises. This study explores the impact of environmental certificates and the cost of pollution abatement equipment on firm performance for small and medium-sized enterprises (SMEs). In this research, the linear regression method examines the effect of environmental-related certificates and technology on SMEs’ performance using Stata version 14.0 software. The training dataset comprises 3504 manufacturing SMEs in Vietnam during 2011–2015. The results highlight the positively considerable impacts of environmental-related certificates and the cost of pollution abatement equipment on SMEs’ performance. More importantly, the findings also highlight the excessive availability of pollution abatement equipment and whether it adversely impacts enterprises’ performance. The equipment cost positively impacts firm performance while, at an extreme value, the result shows a negative correlation. Furthermore, this study enriches the current literature on corporate social responsibility (CSR) and suggests SMEs approach and embrace more environmental-related certificates and technology to increase productivity.

Highlights

Vietnam has emerged as the fastest-growing industrial economy in the ASEAN region during the last three decades
We evaluate the effect of environmental-related certificates and the cost of pollution abatement equipment to consider how these factors may affect firm performance
Most firms do not consider the investment in pollution abatement equipment which accounted for only a little more than 4% of total firms

Summary

Introduction

Vietnam has emerged as the fastest-growing industrial economy in the ASEAN region during the last three decades. Labor forces migrated rapidly from agriculture to manufacturing, resulting in substantial pay gains. Small and medium-sized enterprises (SMEs) are considered a critical research matter since they have functioned as a pivotal part of the sustainable growth of economies worldwide. It is undeniable that to contribute to economic growth, they have offered huge advantages like reducing poverty, generating employment opportunities, yielding innovations, diversifying, and increased competition. This study concentrates on SMEs in the manufacturing area, and the classification of SMEs will bear a striking resemblance with Vietnam’s Enterprise Law definition.

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