Small And Medium-sized Enterprises In Vietnam Research Articles

DIGITAL CAPABILITIES, FIRM PERFORMANCE, AND INNOVATION CAPABILITIES: A COMBINED APPROACH OF PLS-SEM AND ANN

This study, rooted in the dynamic capabilities view, examines the influence of digital capabilities on the performance and innovation capabilities of manufacturing small and medium-sized enterprises (SMEs) in an emerging market. Surveying 297 manufacturing SMEs in Vietnam, the research employed partial least squares-structural equation modelling (PLS-SEM) and artificial neural network (ANN) to test hypotheses. The results show a positive effect of digital capabilities on process and product innovation capabilities. Despite an insignificant direct impact of digital capabilities on firm performance, technological uncertainty moderates this relationship positively. Notably, process innovation capability has no direct impact on firm performance, while product innovation capability’s impact on it is negatively significant. The study explored the roles of digital culture and digital leadership, offering novel contributions to understanding a firm’s digital and innovation capabilities. It provides practical implications for managers aiming to enhance firm performance by leveraging digital capabilities for innovation.

Constructing a resilience measurement model for small and medium-sized enterprises in Vietnam: A PLS-SEM approach

Small and medium-sized enterprises (SMEs) constitute around 97% of the total number of businesses in Vietnam, which contributes to 60% of the national growth. In a dynamic and uncertain business environment, both domestically and internationally, the resilience of SMEs has become a topic of significant interest among researchers and practitioners. Resilience, however, is a multifaceted concept that depends on the specific context in which it is applied. Therefore, this study aims to construct a measurement model for assessing the resilience of SMEs in Vietnam. Drawing from a dataset collected from 500 SMEs and employing the PLS-SEM technique. the findings of this research indicate that the resilience index is a combination of reflective and formative models. Resilience at level three is a formative construct comprising four prioritized components: agility, anticipatory capability, flexibility, and adaptability. The reflective measurement model of agility, anticipation, flexibility, and adaptability confirms its reliability and validity. These findings form the basis for the effective allocation of resources to enhance resilience within SMEs. Understanding the nuanced aspects of resilience can benefit in developing targeted strategies to bolster SMEs against the challenges posed by an ever-changing business landscape.

Factors affecting access to finance for small and medium-sized agricultural enterprises in Vietnam

This study explores the financial accessibility challenges faced by small and medium-sized enterprises (SMEs) in Vietnam's agricultural sector, a critical component of the national economy. This study reveals the various obstacles that hinder small and medium enterprises (SMEs) from accessing financial assistance. It highlights the need to have a thorough comprehension of how factors such as financial infrastructure, government laws, risk management, market connections, and financial literacy impact SMEs' ability to access finance. The research suggests that enhancing financial literacy, along with developing a solid financial infrastructure and supportive government policies, is crucial for SMEs. It highlights the importance of tailored banking services, strategic government actions, effective risk management, and integration into market linkages to improve SMEs' financial inclusion. The findings advocate for a holistic approach to address these challenges, offering insights for policymakers, financial institutions, and stakeholders in the SME ecosystem. The study offers practical guidance for enhancing the economic resilience of agricultural SMEs in Vietnam and other developing economies. It proposes strategies to strengthen financial infrastructure, support policies, and promote financial literacy. This study contributes valuable insights to both academic research and practical applications.

Dynamic capabilities and digitalization as antecedents of innovation and sustainable performance: empirical evidence from Vietnamese SMEs

PurposeThis study aims to investigate the relationship between dynamic capabilities and sustainable business performance in Vietnamese small- and medium-sized enterprises (SMEs), focusing on the mediating role of digitalization strategies. Specifically, the authors seek to explore whether and how the three critical characteristics of dynamic capabilities (DCs) – sensing, seizing and transforming capabilities – are linked to business model innovation (BMI) or sustained performance and what dimensions contribute to their development and adoption in digitalization strategies.Design/methodology/approachThe authors analyse a sample of 596 Vietnamese SMEs using a validated measurement framework to explore the three clusters of DCs activities and their contributions to digitalization strategies, BMI and sustainable business performance across economic, social and environmental dimensions.FindingsThe study highlights the pivotal role of sensing, seizing and transforming capabilities in the adoption of digitalization strategies, BMI, as well as in promoting sustainable business performance. Firstly, sensing capability profoundly influences product digitalization strategy, whereas seizing capability has the greatest impact on process digitalization strategy. Secondly, sensing and transforming capabilities significantly contribute to BMI. Thirdly, both process and product digitalization strategies exert a significant positive influence on sustainable business performance, especially the environmental dimension. Finally, the study exhibits the indirect impacts of seizing and sensing capabilities on sustainable business performance through product and process digitization strategies.Originality/valueThis study extends recent research by investigating the DCs underlying a firm’s digitalization strategies and contribute to ongoing calls for further investigation in the DCs literature. This research design, which draws from a validated measurement framework, responds to recent calls to broaden the toolkit used in DCs research. The practical implications of this study can benefit SMEs in Vietnam and beyond as they seek to enhance their digitalization strategies and achieve sustainable competitive advantage.

Prestige over profit, corporate social responsibility boosts corporate sustainable performance: mediation roles of brand image and brand loyalty

PurposeThis study aims to investigate the influence of corporate social responsibility (CSR) on corporate sustainable performance (CSP) of small- and medium-sized enterprises (SMEs) by looking into the significance of mediating factors, namely, brand image (BI) and brand loyalty (BL), within the context of an emerging economy.Design/methodology/approachThe authors conduct an extensive literature study on the subjects of CSR, BI and BL to assess their influence on the sustainable performance of SMEs in an emerging market. The study adopts a quantitative methodology. A total of 438 answers were obtained from a sample size of 513. The data of the SMEs in Vietnam was analyzed using the smart partial least squares structural equation modeling software, specifically version 3.3.2.FindingsThe results of the authors demonstrate notable and favorable correlations between CSR and CSP, CSR and BI and CSR and BL. Importantly, the findings contribute to existing knowledge by looking into the mediating influence of BI and BL in the relationship between CSR and CSP.Originality/valueAccording to the authors’ understanding, a number of research have investigated the correlation between CSR and CSP within the realm of SMEs. Nevertheless, there is a scarcity of scholarly research examining the mediating function of BI and BL in this association. The study’s findings have important implications for entrepreneurs and senior management in effectively guiding their enterprises and improving their business strategies with an emphasis on sustainability in emerging markets. The outcome of this study has the potential to significantly contribute to SMEs in Vietnam as well as other emerging countries.

Joint effect of entrepreneurship and dynamic capabilities on firm performance: an empirical investigation among ICT-SMEs

PurposeWith the focus on the context of small and medium-sized enterprises (SMEs), this study aims to investigate the joint effects of entrepreneurial leadership, entrepreneurial orientation and dynamic capabilities and the mechanisms of how these factors influence firm performance.Design/methodology/approachA survey from 319 managers in information and communications technology SMEs in Vietnam was conducted, and structural equation modeling was adopted to analyze the collected data.FindingsThe results confirm that dynamic capabilities directly influence firm performance and serve as a mediator that connects entrepreneurial leadership and entrepreneurial orientation with firm performance. Additionally, entrepreneurial leadership was found to have a significant positive impact on entrepreneurial orientation.Originality/valueThis research augments the understanding of entrepreneurship and dynamic capabilities literature by examining the joint effects and mechanisms of how entrepreneurial leadership, entrepreneurial orientation and dynamic capabilities interact to enhance SMEs' performance. Furthermore, this study provides empirical evidence of the strategies that SMEs should pursue to attain favorable performance outcomes.

Linking organizational justice and knowledge sharing: An empirical investigation of SMEs in Vietnam

Purpose: The current study aims to investigate the mediating role of Perceived Organizational Support (POS) and Employee Satisfaction (ES) on the relationship between Organizational Justice (OJ) and Knowledge Sharing (KS) in Vietnamese Small and Medium-sized Enterprises (SMEs).
 Design/Methodology/Approach: The framework and hypotheses were examined using SEM on SPSS and AMOS software to analyse the data after receiving 489 valid responses from 73 SMEs in Vietnam.
 Findings: Findings confirmed that OJ positively affects POS, ES and KS. POS and ES played a partly mediator role in the relationship between OJ and KS. Moreover, the relationship between POS and KS is mediated by ES.
 Conclusion: OJ is a crucial and persistent concern for individuals especially within modern organizations. It is one of the key factors shaping the behavior of individual employees. Furthermore, KS behavior is a significant driver of organizational competitiveness and growth. It predicts higher organizational performance, innovation capabilities and fosters a sense of enjoyment and happiness in aiding others. However, most studies have only examined the direct relationship between OJ and KS. Consequently, the methods by which leaders affect people continue to be unclear and mostly hypothetical. Thus, it becomes essential to analyze the empirical impact of OJ on KS by considering the intermediate influence of Perceived Organizational Support (POS) and Employee Satisfaction (ES).
 Practical Implications: This study provides knowledge about the reality of POS and ES and their mediating role in the relationship between OJ and KS which contributes to enriching the library overall and Vietnamese in particular in this subject.
 Contribution to the Literature: The mediating effect of POS and ES between OJ and KS is one of the initial topics to be addressed in this study focusing on SMEs.

Digital organisational restructuring on business value creation in SMEs during the COVID-19 pandemic

ABSTRACT During the COVID-19 pandemic, many small and medium-sized enterprises (SMEs) have been challenged to survive and maintain their market share. Here we investigated vital factors that drive organisations toward digital organisational restructuring (DOR) and examined its impacts on new value creation in the era of COVID-19. We confirmed the theoretical model through a literature review and industrial interviews, further a structural equation modelling analysis of survey responses collected from SMEs in Vietnam. The findings reveal the components of the technology–organisation–environment (TOE) framework and the unified theory of acceptance and use of technology (UTAUT) model drive firms to restructure themselves to create new value digitally. This research shows that critical TOE drivers, DOR, and other constructs influence firms’ value creation. This study improves the understanding of value creation within firms. It extends the UTAUT model by integrating the TOE framework, emphasising DOR’s importance as a critical element of successful digital transformation. Its contribution lies in illustrating how digitalisation facilitates value creation through DOR while providing new forms of visibility management.

Innovation and export: evidence from manufacturing SMEs in a developing economy

PurposeInnovation allows firms to gain or maintain their competitive advantages in both domestic and international markets. However, the findings on the association between innovation and export vary depending on countries, samples, time, variables and methods used for empirical analysis. The purpose of this study is to examine the influence of different types of innovation on export in small- and medium-sized enterprises (SMEs) in a developing economy in the context of global integration.Design/methodology/approachFor empirical analysis, the authors use a sample of manufacturing SMEs in Vietnam in 2013 and 2015. Because the firms do not engage in innovation at random in the research sample, the authors use propensity score matching to account for self-selection bias. The authors also use different matching estimators to ensure robust results.FindingsInnovation activities are found to be positively associated with the probability of engaging in export activities. The effects are mainly contributed by the adoption of new technology or process.Practical implicationsThis research underscores the importance of public interventions and policies designed to promote innovation and export in the SMEs.Originality/valueTo the best of the authors’ knowledge, this research is one of the early attempts to examine the association between different types of innovation and export in SMEs in a developing economy.

Information technology capabilities and organizational ambidexterity facilitating organizational resilience and firm performance of SMEs

Small and medium-sized enterprises (SMEs) face significant challenges in today's rapidly changing business landscape. Due to limited resources and managerial capabilities, some of these businesses struggle to survive in the face of technological advances and economic recession. To address this issue, this research seeks to explore how SMEs can leverage information technology (IT) to overcome crises, capitalize on innovative opportunities, adapt to shifting market conditions, and drive new competitive initiatives. This study uses partial least squares structural equation modeling (PLS-SEM) to analyze the data collected from 247 SMEs in Vietnam. The results show that IT capabilities play a crucial role in stimulating organizational ambidexterity, resilience, and SME performance. In addition, the study emphasizes the potential impact of government support in enhancing organizational resilience. These findings provide empirical evidence supporting the Resource base theory with dynamic capabilities view and offer guidance to SMEs on allocating resources effectively and taking advantage of government support. The study also provides theoretical contributions and managerial implications to enhance business performance and achieve sustainable development.

On the revision of detecting learning-by-exporting: empirical evidence from the small- and medium-sized enterprises in Vietnam

This study aims to identify the role of exports in improving the productivity of small- and medium-sized enterprises (SMEs) in Vietnam. We exploit the firm-level panel dataset from the Vietnam SME Survey between 2009 and 2014. This remarkable period occurred two years after Vietnam’s accession to the World Trade Organization. Hence, for the first time, the learning-by-exporting hypothesis was tested for a case study of SMEs in developing countries in the context of international trade integration, such as Vietnam. By applying the propensity score matching method, our results are as follows. First, we find strong evidence that SMEs in Vietnam could improve their productivity when exporting during the studied period. Second, exports have a significant impact on the productivity of SMEs in non-municipal areas of Vietnam. Based on these findings, policy recommendations are suggested for stimulating the productivity of SMEs in developing countries. In particular, SMEs in non-municipal provinces might need more favorable policies to boost export activities.

Factors influencing the decision to outsource logistics services of SMEs in Vietnam

This study examines the factors influencing the decision to outsource logistics services of small- and medium-sized enterprises (SMEs). The Cronbach’s Alpha test, exploratory factor analysis, confirmatory factor analysis, and structural equation modeling were employed to analyze data collected from 204 Vietnamese SMEs in the export of agricultural products, seafood, and textile industries. The results show that the motivation to reduce costs and the characteristics of service providers have the most significant impact on these enterprises’ decisions to outsource logistics services. Moreover, outsourcing strategy also affects logistics outsourcing decisions. Based on the results, this study provides recommendations for logistics service providers to attract customers and advise SMEs on the decision-making process to outsource or operate logistics activities themselves.

Innovation and SMEs performance: evidence from Vietnam

Purpose The purpose of this paper is to examine the effect of innovation on the performance of small and medium-sized enterprises (SMEs) in Vietnam. Design/methodology/approach The paper uses data from the surveys on SMEs in Vietnam conducted by the Development Economics Research Group at the University of Copenhagen, the United Nations University’s World Institute for Development Economics Research, Central Institute for Economic Management and Institute of Labor Science and Social Affairs, and applies least squared regressions and 2SLS regressions to examine the effect of innovation on the performance of SMEs. Findings The authors find that SMEs with innovation tend to perform better than SMEs without innovation. The authors further show that the positive effect of innovation on firm performance mainly comes from the effect of improvement of existing products, an important type of innovation in SMEs. This result is persistent when the authors use propensity matching score and 2SLS regression with instrumental variable approaches. Overall, the results show the important role of innovation in enhancing the firm performance of SMEs, which sheds light on the literature on the controversial relation between innovation and SMEs performance in the world. Research limitations/implications The major limitation of the paper is the lack of data. Although the database used in the paper is widely used to analyze SMEs in Vietnam, it covers about 2,500 firms in only nine provinces/cities in Vietnam. Practical implications Policymakers should enact relevant policies to support SMEs with innovation activities, thereby increasing firm performance and their competitiveness. For instance, encouragement policies or financial incentives (tax reduction or subsidies) for innovative firms should be implemented and/or fostered. Originality/value To the best of the authors’ knowledge, this is the first paper to examine the effect of different types of innovation on the performance of SMEs in Vietnam.

The effects of management characteristics on the adoption of International Financial Reporting Standards for small and medium-sized enterprises.

This study aims to examine the effects of management characteristics, including perceptiveness, support, and willingness on the adoption of International Financial Reporting Standards (IFRS) for small and medium-sized enterprises (SMEs) in Vietnam. The research collects secondary data via a questionnaire from 218 responses by senior managers and financial directors of SMEs in Vietnam during the period from January 2022 to June 2022. The model’s scales are established and tested by Cronbach’s alpha, exploratory factor analysis (EFA), and confirmatory factor analysis (CFA). Then, structural equation modeling (SEM) is used to test research hypotheses. The research results confirm that the readiness to apply IFRS in SMEs in Vietnam depends greatly on the perceptiveness and support of managers of researched firms, consistent with previous studies (Moqbel et al., 2013). Upon the analysis results, the research has proposed instructive recommendations to encourage SMEs to accelerate the preparation of firms’ financial statements complying with IFRS. By doing these, firms will increase their competitive advantages and promote international integration. The study also contributes to the literature as a lesson to countries in adopting full IFRS.

The impact of COVID-19 on financing decisions of SMEs in Vietnam

The coronavirus disease (COVID-19) pandemic has had a massive impact on the economy around the world. To shed light on how COVID-19 is affecting the bank loan financing decisions of small and medium-sized enterprises (SMEs) in Vietnam, we conducted a survey with the participation of representatives come from 92 SMEs in Ho Chi Minh City, Vietnam in the period from March to April 2020. Employing logistic regression, we find that the risk perception of COVID-19 is a significant factor that helps predict SMEs’ bank loan financing decisions. This study not only contributes to management literature regarding firm’s financing decisions but also assists policymakers in introducing policies related to SMEs.

The Impact of Corporate Social Responsibility, Green Supply Chain Management on The Performance of Small and Medium Enterprises in Vietnam: A Systematic Literature Review and Directions for Future Research

The topics of green supply chain management (GSCM) and corporate social responsibility (CSR) have attracted many research works as the sustainable economic model is growing. Most of the previous research on CSR and GSCM has focused on large enterprises and corporations. However, there are very few studies in Vietnam written about CSR and GSCM applications and their impact on firm performance, especially in small and medium-sized enterprises (SMEs). Therefore, this study was carried out to analyze the impact of CSR on firm performance of SMEs in Vietnam with the intermediaries of GSCM. The study was conducted using qualitative research methods, from previously related studies and based on the theory of CSR, GSCM, firm performance, and stakeholder theory. On that basis, the study points to research gaps that could be carried out in the future. Keywords: Corporate social responsibility, Green supply chain management, Firm performance, SMEs.

Impact of Organisational Factors on the Circular Economy Practices and Sustainable Performance of Small and Medium-sized Enterprises in Vietnam

Internal organisational factors have been identified as barriers to adopt circular economy (CE) practices in prior research. However, empirical evidence is limited to support this claim. Additionally, their impact on sustainable business performance, especially for the emerging economies and within the small and medium sized enterprises (SMEs) have not been studied adequately. This research bridges these knowledge gaps drawing on from CE, human resource management, innovation and sustainability literature to develop and validate a theoretical model that examines the relationships between organisational factors (leadership, innovation, culture, and skills) and their impact on adopting CE practices to enhance sustainable performance of SMEs. A survey was conducted among 205 SMEs’ employees in Vietnam, and responses were analysed using employing Structural Equation Modelling. Our findings reveal that organisational leadership will facilitate developing the culture and innovation capability to adopt CE practices through a ‘hub and spoke’ strategy for enhancing sustainable performance among the SMEs in Vietnam. In this vein, we recommend creating knowledge sharing strategies, collaborative and cooperative CE working groups within and between SMEs, and information systems capabilities to build sustainable business organisations.

SME financing role in developing business environment and economic growth: empirical evidences from technical SMEs in Vietnam.

Distinguishing the significance of business environments for technical small and medium-sized enterprises (SMEs), this study examines the connection between business environments, GDP growth, and SMEs’ financing choices in Vietnam. The study considered the agency theory as a theoretical base to explain how information asymmetry between SMEs and lenders influences SMEs’ financing choices and encompasses the effects on business environment and GDP growth of Vietnam. For this binary logistic regression, text is applied. Global Entrepreneurship Monitor and World Bank data were analyzed. The findings of the study are robust and showed that SME financing (e.g., formal and informal) under the financial infrastructure and tax regulation may enhance formal credit choice and reduce informal credit choice. This enhances the depth in the business environment of technical SMEs and found significant effects on GDP growth. For the first time, this research examines the impact of information asymmetry and agency theory on restaurant financing choices. The research has significance for industry practitioners and governments interested in SMEs’ financial viability. On the recent topicality, study also presents policy implications for key stakeholders.

The lasting effect of formalization on credit access: Evidence from Vietnamese private SMEs

This study adds to the literature by evaluating for the first time not only the short-term but also the long-term effects of formalization on loan access for small and medium-sized enterprises (SMEs) in Vietnam between 2005 and 2015. We find that businesses that formalize their status have a better chance of obtaining a formal loan, but the benefits of formalization are only apparent in the short term and not in the long run (five, seven or more years). Also, our study indicates that promoting formalization and loan availability for private SMEs in Vietnam requires encouraging the adoption of accurate financial records, accounting books, and anti-corruption measures.

Corporate social responsibility and SMEs' performance: mediating role of corporate image, corporate reputation and customer loyalty

PurposeThe purpose of the paper is to evaluate the essential role of corporate social responsibility (CSR) on SMEs' performance by exploring the mediating role of corporate image (CI), corporate reputation (CR) and customer loyalty (CL) between CSR and firm performance (FP) in the context of an emerging country.Design/methodology/approachBased on an extended literature review on CSR, CI, CR and CL studies, the authors evaluate the impact of these four constructs on SMEs' performance in an emerging market. The paper follows a quantitative approach. The study sample was composed of 482 responses covering top executives, managers and experts. The Smart PLS SEM version 3.3.2 was used to analyse the data of the small- and medium-sized enterprises (SMEs) of Vietnam in the year 2020–2021.FindingsThe authors' findings reveal significant and positive relationships amongst CSR, FP, CSR and CI, CSR and CR, CSR and CL, and most importantly, the findings add value to the current knowledge by exploring the mediating effect of CI, CR and CL between CSR and FP.Research limitations/implicationsThe study was conducted in Vietnam. As a result, the findings of the study might not be applicable for other countries, if the economic and environmental settings are different from that of Vietnam. Therefore, future research should consider for other countries, other regions. Second, due to the purpose and priority of the study, CI, CR, and CL was employed as mediators amongst the relationship between CSR and FP. Thus, future research should consider other mediators or moderators in such a relationship to see how CSR generates outcomes in the new associations.Practical implicationsThe study regarding the role of CSR in enhancing the performance of SMEs can motivate firm's chief executive officers (CEOs) to be proactive in getting involved and practising CSR in a consistent manner. Second, the above discussion draws a very important implication for the executive level, the management level of the enterprise, which enterprises should balance the interests of business, customers, other stakeholders, the environment and society in order to optimise CSR outcomes for improving competitiveness and developing sustainably. This implication is particularly important to the survival and development of SMEs in a challenging emerging economy.Social implicationsThe study widens the literature regarding relationship between CSR and SMEs' performance. Besides, the study supports stakeholder theory that explains why CSR positively affects firm's performance. The significant mediating roles of CI, CR and CL were positively confirmed in the study. Although previous studies determined that such roles are strategic source of competitive advantages of enterprises, however, how CSR involved in enhancing the roles has not been deeply explored and integrated. Third, the findings of the study support the resource-based view (RBV) and resource-based perspective that explains why firm should engage in CSR activities, and CI, CR and CL can enhance firm's performance by providing strategic source of competitive advantages that facilitate business to improve its performance in sustainable direction.Originality/valueTo the best of the authors' knowledge, the current literature on CSR and FP shows that, to date, there has been little empirical research on the mediating mechanism of CI, CR and CL in the link between CSR and FP for SMEs. The findings of the study may have great implications for entrepreneurs and top management with respect to the strategic perspectives to drive the businesses and to improve firm's performance in a sustainable direction in the context of emerging markets. In addition, the finding might be of great interest to – and motivate – SMEs' managers to engage with CSR actions where such businesses were or are situated during and after the coronavirus disease-2019 (COVID-19) pandemic. By that understanding, the Government might allow for innovative and groundbreaking policies or the reformation of old policies to leverage businesses to promote their strengths towards sustainable development in the new economic settings. The findings of the study may be a significant contribution to SMEs in Vietnam and in other emerging economies.