Relational Capital, Supply Chain Integration And Firm Performance In The Vietnamese Coffee Industry

Relational Capital, Supply Chain Integration and Firm Performance in the Vietnamese Coffee Industry Hoang Lam Cuong MA UEH, BA UEH A thesis submitted in fulfilment of the requirement

Relational Capital, Supply Chain Integration and Firm Performance in the Vietnamese

Coffee Industry

Hoang Lam Cuong

MA (UEH), BA (UEH)

A thesis submitted in fulfilment of the requirements for the degree of

Doctor of Philosophy in Management

Faculty of Business and Law The University of Newcastle Australia

June 2019

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Statement of Originality

I hereby certify that the work embodied in the thesis is my own work, conducted under normal supervision The thesis contains no material which has been accepted, or is being examined, for the award of any other degree or diploma in any university or other tertiary institution and, to the best of my knowledge and belief, contains no material previously published or written by another person, except where due reference has been made I give consent to the final version of my thesis being made available worldwide when deposited in the University’s Digital Repository, subject to the provisions of the Copyright Act 1968 and any approved embargo

Signed: On: 28/06/2019

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Abstract

The objective of this thesis is to examine the impact of relational capital

sub-dimensions of trust, commitment and dependence on supply chain integration (SCI) and firm performance in the Vietnamese coffee industry Supply chains (SCs), a network of activities between a firm and its suppliers, are becoming increasingly complex in the ever-changing and unpredictable global marketplace Understanding the dynamics of the

relationship between firms and suppliers is therefore critical for improving firm

performance Following the global financial crisis (GFC), policymakers and businesses are interested in discerning how trust, commitment and dependence influences SCI and firm performance, and this has generated intense scrutiny in policy discourse and academia This

is important within the context of agricultural SCs, which have received very little

empirical investigation due to complex agricultural practices and the lack of a

comprehensive data set This study aims to bridge this knowledge gap by empirically investigating the linkage between relational capital dimensions of trust, commitment and dependence on SCI and SCI on firm performance Further, with the view that SCI’s

contribution to firm performance is influenced by the external environment in which the supply chain is embedded, the study explores the nature and moderating effect of

environmental uncertainty (supply uncertainty and government policy uncertainty) on the SCI – firm performance nexus, based on the agricultural SC in the Vietnamese coffee industry

A structural equation model (SEM) and multi-group analysis were implemented to analyse survey data of 349 growers and roasters of coffee in Vietnam SPSS 20 and AMOS

20 software packages were used to conduct a range of statistical analyses, comprising

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exploratory factor analysis (EFA), confirmatory factor analysis (CFA) and SEM Multi-group analysis was used to test for moderating effects of environmental uncertainty on the SCI – firm performance nexus SEM was conducted to compare between groups to discover whether environmental uncertainty may moderate the relationships between the constructs under study

The empirical results reveal three main findings First, the SEM results show that trust, commitment and dependence are positively associated with SCI Second, the results show that SCI is positively associated with firm performance, both in terms of cost

performance and service performance The empirical results based on multi-group analysis and use of control variables also show that company characteristics such as firm type, firm size and firm age do not affect relationships in the research concept framework Third, while supply uncertainty has an adverse effect on the SCI – firm performance nexus,

government policies uncertainty has no statistically significant effect on this

The empirical findings have important implications from a theoretical, empirical and policy perspective In terms of theoretical contributions, first, this thesis offers strong empirical evidence to support the view that relational capital enhances SCI The next

finding is that the most important relational capital influencing SCI is trust, followed by commitment and dependence, in that order This finding is investigated in a developing country context, Vietnam, for which no previous research has been recorded in the

literature This contributes to verifying theory in different contexts Second, the results report that SCI enables firm performance in the context of growing controversy about this

in the literature Third, the empirical results of the thesis support the theoretical view that the SCI – firm performance nexus is influenced by environmental uncertainty However,

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the findings of mixed support for the proposed model reveal that the SCI – firm

performance nexus is affected depending on the type of environmental uncertainty in which

it is embedded – supply uncertainty has a negative impact on this nexus, but there is no evidence of this for government policy uncertainty This contributes to perspectives on the moderating effects of the environment in SCI research From a managerial perspective, the thesis contributes to the understanding of SCI First, the results highlight the need for improving relational capital of trading partners in the coffee industry in Vietnam Second, the results lead to a policy implication that to effectively develop the Vietnamese coffee industry, SCI should be strongly promoted Successful SCI is a solid foundation for the development of Vietnam’s coffee industry In terms of policy implications, based on the results of the study on the negative impacts of supply uncertainty on the SCI – firm

performance nexus, from a public policy perspective, it is necessary to develop policies to stabilise coffee supply, such as policies to encourage the development of coffee growing, policies to raise farmers’ knowledge about science, technology and the economy, and policies to increase credit for farmers This will ensure a stable supply of coffee, allowing SCI to bring higher efficiency for the coffee industry