Tóm tắt Luận án The impact of risk factors to production and businesss performance in Vietnam

1 CHAPTER 1: INTRODUCTION 1.1 Research rationale: Vietnam is the second largest coffee producer with an average volume about 1.3 million tons coffee per year. Its areas under crop for producing coffee is approximately 641.7 thousand hectares. Most of them are used for export in the form of raw materials. Vietnam exported about 1.906 million tons of coffee, with the volume sale of $ 3, 5569 billion in 2014. Although coffee industry is highly effective, it also faces with a lot of risks from the uncertainty factors. In addition, coffee producers and sellers lack of competence in risk management. Thus, it is essential to do a research in the field of risk management in coffee industry. The research “The impact of risk factors to production and businesss performance in Vietnam” is carried out to satisfy this demand. 1.2 Research objectives: This research is designed to achieve three objectives. Firstly, it tries to identify the risk factors, influencing the production and trading of coffee, discover the gap in risk management theory from literature review, and suggest conceptual framework. Secondly, the influence of risk factors, measured by appropriate scales, on producing and trading coffee is identified. Thirdly, risk management solutions are built/suggested to reduce the impacts of risk factors on coffee industry. Fourthly, it aims to provide some complementary knowledge in risk theories. 1.3 Research questions: The research aims to address four questions. Firstly, what do risk factors influence producing and tradingcoffee in Vietnam? And what do theoretical gaps, related to risks, address in this research. Secondly, what are relationships between risk factors and production and business performance in the context of Vietnam? Thirdly, what are risk management solutions appropriate for coffee producing and selling in Vietnam? Fourthly, How do the research findings contribute to the risk management theories? 1.4 Research methodology: Qualitative and quantitative approach are combined in doing this research. 1.5 Research object and scope: 1.5.1 Research object: Risk factors influencing coffee production and business performance in Vietnam. . 1.5.2 Scope of research: Measurement scales and conceptual framework, which present the relationships between risk factors and coffee production and business performance in the period from 2010 to 2015, are built based on the literature review of previous related research and field survey. . 1.6 Research contributions: (1) Building new measurement scales for risk factors, influenced to production and business performance. (2) Assessing all types of risks associated to coffee producing and selling process in detail, thorough, and comprehensive. (3) highlighting the two faces of risk, which are chance of losses and gains (4); Adding the new theoretical perspective to risk and risk management theories 2 CHAPTER 2: LITERATURE REVIEW AND CONCEPTUAL FRAMEWORK 2.1 Risk 2.1.1 Traditional approach (negative approach): (1) Hoàng Phê (1995) said that “Risk is bad, not good, and sudden occurrence”; (2) Nguyễn Lân (1998) considered “Risk is unlucky occurrence”; (3) Oxford dictionary defines “the possibility of something bad happening at some time in the future; a situation that could be dangerous or have a bad result”; (4) Hồ Diệu (2002) described “Risk is measured by asset losses or less actual profit than expected profit” 2.1.2 Hedging approach: (1) Frank Knight (1921, page 233): “Risk is measured uncertainty”; (2) Allan Herbert Willett (1951, page 6): “Risk is exposure to uncertainty related to unexpected occurrences”; (3) C. Arthur William et al. (1964): “Risk is potential deviation in outcomes. When risk occurs, people are not able to predict exactly outcome. The existence of risk causes uncertainty. Risk occurs when any people’s action leads to unpredictable gain or losss possibility; (4) David Apgar (2006): “Risk is any uncertainty outcome which affects actual results and make them different from expected results”. 2.1.3 Other definitions: (1) Vân, Đ.T.H et al., (2013, tp. 32): “Risk is measured uncertainty, when managed well, people can get opportunities; on contrary, when managed bad losses will occur”; (2) Aswath Damodaran (2010, p. 86 t1): “Risk refers to likelihood to get actual investment rate of return which is different from expected investment rate of return. Thus, risk refers to not only bad outcome, when actual is lower than expected investment rate of return, but also good outcome, when actual is higher than expected investment rate of return. In reality, we can say that risk is associated a change of gains when it bring good outcome and a change of losses if it accompanies to bad outcome. We should consider both of them when assessing risk”. (3) Ngô Quang Huân. N.Q et al (1998, page 8): “Risk is potential variation in outcomes, the lager number of type of outcomes and the greater variation among them, the greater level of risk. Risk is objective concept and measured”. 2.1.4 Suggested concept in this research: Risk is occurrence at a given probability and makes variations in outcome of occurrence, and makes a difference from expected or predicted results. Otherwise, risk existence may cause unpredicted losses. Duplicity of risk concept involves a chance of losses and gains. After all, risk is an objective phenomenon, happened out of people’s intention, but it is identified, measured, and controlled. Furthermore, human being may be able to transform from a chance of losses to a chance of gains. 2.2 Losses: Tuấn, A.N. (2006, page 21) defined losses as “damage and lost in term of asset, opportunities, physical and mental human well-being, people’s health, and career development are caused by risks”. 2.3 The relationship between potential variations in production and business performance and risks 3 2.3.1 The concept of variation in production performance: It refers to changes in actual production performance in comparison to expected production performance. These changes are invisible and caused by risk factors. 2.3.2 The concept of variation in business performance. Variations in business performance refer to difference between actual and expected business performance, caused by risk factors. 2.4 Risk management: It is defined as “scientific, continuous, comprehensive, and systematic approach process to risks. This process is used to identify, control, prevent, reduce damage, losses, and negative effects of risks, and make them to be opportunities” (Vân, D.T.H, et al., 2013, page 66) The suggested definition of risk management in this research is “Risk management is scientific, continuous, comprehensive, and systematic approach process to risks in order to identify, control, prevent, reduce damage, losses, and negative effects of risks based on predicted probability of risk occurrence, and make disadvantage to be advantage risk. 2.5 Literature review related to research Table 2.1: Previous researches in foreign countries No Previous researches RISK FACTORS PRODCUCTION BUSINESS 01 WB (2004) Market price, working capital, weather, pest, production imbalance. Market price, international financial market, working capital, business pattern, psychological and behavior businessman. 02 UNCTAD/WT O (2002) Market price, business pattern, international coffee roasted suppliers, international speculators, market information, working capital, and society. 03 Quoc Luong and Loren W. Tauer (2004) Market price, psychology and behavior of producers. 04 ICO (2014) World coffee trade 1963- 2013. Market price, production imbalance , society Market price, business pattern, international speculators, international coffee roasted suppliers, international finance markets, and society. 05 Thinh Hoang Si Market price 4 & Huong Nguyen Thi (2015) No Previous researches RISK FACTORS PRODCUCTION BUSINESS 06 WB (2015 Weather, pest. Working capital, political mechanism. Market price, international payment currencies, foreign exchange rate, working capital. 07 Bunn, Christian (M.Sc.) (2015) Weather. Table 2.2: Previous researches in Vietnam No Previous Researches RISK FACTORS PRODUCTION BUSINESS 01 Geography and National Resource Center, Vietnam Institute of Science and Technology (1987) Thời tiết. 02 Nghị, N.S at al., (1996) Pest and production process 03 Gia, T.B and Cường, H.T (2005) Market price, working capital, production process, technology, political institutions, society, psychology and behavior of producers... International Finance Markets, producers’ psychology and behavior 5 No Previous Researches RISK FACTORS PRODUCTION BUSINESS 04 Chi, T.Q. T (2007). Market price, political institutions, society, working capital, production imbalance. Market price, international payment currencies and exchange rate, political institutions, society, working capital, international finance markets, psychology and behavior of businessmen... 05 Tran, N.T.N (2011) Market price 6 2.6 Conceptual framework and hypotheses: The impact of risk factors to production and business performance in Vietnam 2.6.1 Conceptual framework and hypotheses: The impact of risk factors to production and business performance in Vietnam 2.6.1.1 Conceptual framework and hypotheses: The impact of risk factors to production performance in Vietnam IMPACT TO PRODUCTION PERFORMANC-E TTSX BDKQSX RISK’S IMPACT TO RODUCTION AND BUSINESS PERFORMANCE RISKS’ MPACT TO PRODUCTIO N PERFORMA- -NCE RISK’S IMPACT TO BUSINESS PERFORM- ANCE FACTOR DETERMINANTS OF PRODUCTION PERFORMANCE HVNSX GTT KTSX CN SDB VSX MCDSX THT FACTOR DETERMINANTS OF BUSINESS PERFORMANCE GTT KTKD TTTT VKD NRX QDCQT HVNKD TTTC DTTTG IMPACT TO BUSINESS PERFORMAN-CE TTKD BDKQKD 7 2-1 Conceptual framework: The impact of risk factors on production and business performance. (Source: Văn, L.B) - Potential deviation model in production performance is determined by following multiregression: BDKQSX = β1 + β2GTT + β3KTSX+ β4CN+ β5THT+ β6SDB + β7VSX + β8MCDSX + β9TCCTSX+ β10XHSX+ β11HVNSX + u + Dependent variable is: “Potential deviation in production performance” and denotes as BDKQSX + Independent variables include “Market price” (GTT); “Production process” (KTSX); “Production technology” (CN); “Weather” (THT); “Pest” (SDB); “Working capital” (VSX); “Production imbalance” (MCDSX); “The impact of political institutions on production” (TCCTSX); “Social impact on production” (XHSX); “Producers’ psychology and behavior” (HVNSX). - Loss model in production is defined as follows: TTSX = γ1 + γ2GTT' + γ3KTSX'+ γ4CN'+ γ5THT'+ γ6SDB'+ γ7VSX'+ γ8MCDSX'+ γ9TCCTSX'+ γ10XHSX'+ γ11HVNSX' + u' + Dependent variable is: “Loss in production” and denotes as TTSX. + Independent variables are defined as “Market price” (GTT'); “Production process” (KTSX'); “Production Technology” (CN'); “Weather” (THT'); “Pest” (SDB'); “Working capital” (VSX'); “Production imbalance” (MCDSX'); “The impact of political institutions on production” (TCCTSX'); “Social impact on production” (XHSX'); “Producers’ psychology and behavior” (HVNSX'). - Hypotheses: There are nine hypotheses, ranged from HSX1 đến HSX9, in potential deviation model of production performance. Loss model in production has nine hypotheses, ranged from H'SX1 đến H'SX9. 2.6.1.2 Conceptual framework used to examine the impact of risk factors on business performance and derive hypotheses: - Potential deviation model in business performance is as follows: BDKQKD = β'1+ β'2GTT+ β'3KTKD+ β'4TTTT+ β'5TTTC+ β'6VKD+ β'7DTTTG+ β'8QDCQT+ β'9NRX+ β'10TCCTSX+ β'11XHSX ++ β'12HVNKD+ u + Dependent variable is "Potential deviation in business performance”, denoted as BDKQKD. + Independent variables include "Market price” (GTT); "Business process” (KTKD); "Market information” (TTTT); "International finance markets” " (TTTC); "Working capital” (VKD); "International payment currencies and foreign exchange rate” (DTTTG); "Speculate Funds” (QDCQT); "International roasted coffee-nut producers” (NRX), “The impact of political institutions on production” (TCCTKD); “Social impact on production” (XHKD); " Producers’ psychology and behavior " (HVNKD). 8 - Loss model in business performance is defined as follows: TTKD = γ'1 + γ '2GTT' + γ'3KTKD'+ γ'4TTTT' + γ'5TTTC'+ γ'6VKD'+ γ'7DTTTG' + γ'8QDCQT' + γ'9NRX' + γ'10TCCTSX'+ γ'11XHSX' + γ'12HVNKD' + u' + Dependent variable is: "Loss in business performance” and denoted as TTKD + Independent variables are "Market price” (GTT'); "Business process” (KTKD'); "Market information” (TTTT'); "International finance markets” (TTTC'); "Working capital” (VKD'); "International payment currencies and foreign exchange rate” (DTTTG'); "Speculate Funds” (QDCQT'); " International roasted coffee-nut producers” (NRX'); “The impact of political institutions on production” (TCCTKD'); “Social impact on production “(XHKD'); " Producers’ psychology and behavior” (HVNKD'). - Hypotheses: Potential deviation model in business performance has ten hypotheses, ranged from HKD1 đến HKD10; and loss model in business performance includes also ten hypotheses, ranged from H'KD1 đến H'KD10. CHAPTER 3: RESEARCH METHODOLOGY 3.1 Delphi method. Information is collected from experts through the following process: (1) determining the research’s objectives; (2) selecting relevant experts (3) designing questions and sending them to experts; (4) summarizing the experts ‘response and writing the executive report; (5) sending executive report to experts to get comments; (6) Receiving the new revising comments from experts; (7) doing the third step until making a consensus agreement. 3.2 Scale validity assessment. Assess the scale validity for each latent variable by calculating cronbach alpha. The acceptable level of cronbach’s alpha ranges from 0.6 to 0.9. 3.3 Assess and revise measurement scale by EFA. Carrying out exploratory factor analysis and testing necessary requirement of EFA satisfy two criteria: KMO 50%; and Sig 5%. 3.4 Correlation analysis. Testing collinearity relationship among independent variables: identify a statistically significant high correlation coefficient at the level of 5%.. 3.5 Multi regression analysis: Carry out multiregression analysis between dependent variable and independent variables, discovered from EFA. 3.6 Sample design 3.6.1 Sampling method: Stratification sampling is used to satisfy a presentativeness of respondents in term of area, size, and type of business. 3.6.2 Sample size.: According to Hoelter (1983), a minimum sample size is 200 respondents. The sampling process is this research is as follows: 9 3.6.1.1 Sample size requirement in building measurement scale (Delphi method). Sample size in production sector: n =10; sample size in business sector: n = 10; 3.6.1.2 Sample size in preliminary research - Sample size in preliminary research is determined by qualitative approach as follows:: (1) Production sector: n = 50 (Group discussion: n = 10; Questionnaire survey: n = 40); (2) Business sector: n = 50 (Group discussion: n = 10; Questionnaire: n = 40). - Sample size in preliminary research is determined by quantitative approach is as follows: (1) Production sector: n = 100; (2) Business sector: n = 100. 3.6.1.3 Sample size in formal research (quantitative approach): Production sector: n = 200; Business sector: n = 200. CHƯƠNG 4: RESEARCH RESULTS AND DISCUSSIONS 4.1 Research results: 4.1.1 Measurement scale design and testing: 4.1.1.1 Measurement scale assessing by Delphi method: - Production sector: Questionnaires designed based on eleven definition of risk (mention in part 2.1) were sent to ten specialists. After 5 rounds discussions and responses, all of them make consensus agreement in defining production risk in terms of potential deviations in production performance and production losses. - Business sector: Questionnaires designed based on eleven definition of risk (mention in part 2.1) were sent to ten specialists. After 4 rounds of discussions and responses, all of them make consensus agreement in defining production risk in terms of potential deviations in business performance and business performance losses.. 4.1.1.2 Measurement scale assessment in preliminary research: - Preliminary research with qualitative approach: + Coffee production: (1) Potential deviations in production performance: rate of agreement for each risk factor is as follows: BDKQSX: 96%; GTT: 90%; THT: 80 %; SDB: 82%; KTSX: 76%; CN: 78 %; MCDSX: 72 %; VSX: 84 %; HVNSX: 70 %; TCCTSX: 32 %; XHSX: 36%. (2) Losses in production performance: rate of agreement for each risk factor is as follows: TTSX: 88%; GTT: 92%; THT: 82%; SDB: 80%; KTSX: 74%; CN: 70%; MCDSX: 68%; VSX: 84%; HVNSX: 68%; TCCTSX: 28%; XHSX: 30%. 10 + Coffee Business in Vietnam: (1) Deviation in business performance: agreement rate for each risk factor is as follows: BDKQKD: 92%; GTT: 98%; KTKD: 80%; QDCQT: 90%; NRX: 72%; TTTT: 84%; DTTTG: 74%; TTTC: 76%; VKD: 84%; HVNKD: 70%; TCCTKD: 36%; XHKD: 34%. (2) Losses in business performance: agreement rate for each risk factor is as follows: TTKD: 80%; GTT: 92%; KTKD: 76%; QDCQT: 90 %; NRX: 72%; TTTT: 88%; DTTTG: 74%; TTTC: 76%; VKD: 86%; HVNKD: 70%; TCCTKD: 26%; XHKD: 28% . - Preliminary research with quantitative approach: + Production sector * Potential deviation in production performance: ● Measurement scale reliability by cronbach’s alpha coefficient: Two of the total eleven variables, removed from the model after reliability analysis, are TCCTSX, and XHSX. ● Results from Exploratory factor analysis: (1) Independent factor: KMO coefficient is 0.734; P-value is 0.00; and total variance explained by the factor is 77.86%. Thus, data is fitted to the research model.. (2) Independent factor: Results from EFA for eight factor are as follows: KMO = 0,675; P-value = 0,00; Total variance explain by factor is 75.544%. Data is fitted to the research model. * Losses in production performance in preliminary research: ● Scale Reliability assessment by Cronbach's alpha: Two of the total eleven variables, removed from the research model after reliability analysis, are “TCCTSX” and “XHSX”. ●Results from exploratory factor analysis ( EFA) (1) Dependent factor: KMO coefficient is 0.734; p-value is less than critical value (0.00 in comparison to 0.05; and total variance explained by this factor is 81.697%. Data is fitted to the research model. (2) Independent factor: Results from EFA for 8 factors are as follows: KMO = 0.709; p-value = 0,00; and total variance explained =77.096%. Data is fitted to the model. * Potential deviation in business performance (Preliminary research): ● Scale reliability assessment by Cronbach's alpha: Two of the total eleven variables, removed from the research model after reliability analysis, are TCCTSX and XHSX. ● Results from Exploratory factor analysis in preliminary research: (1) Dependent factor: KMO = 0.45; p-value = 0.00; total variance explained by factors = 80.56%; data is fitted to the research model. (2) Independent factor: results from exploratory factor analysis for 9 factors are as follows: KMO 11 = 0.666; P-value (Sig) = 0.00; total variance explained by factors = 76.95%. Data is fiited? to research model. * Losses in business performance (preliminary research): ● Scale reliab