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Why do micro-businesses hesitate to “grow up”?

Le Quang Hieu (Hong Duc University, Thanh Hoa City, Vietnam)
Vu Hong Van (University of Finance - Marketing, Ho Chi Minh City, Vietnam)
Nguyen Khanh Doanh (Thai Nguyen University, Thai Nguyen City, Vietnam)

Asia-Pacific Journal of Business Administration

ISSN: 1757-4323

Article publication date: 7 June 2021

Issue publication date: 15 July 2021

13571

Abstract

Purpose

This study analyzes the factors that affect the decisions of micro-businesses to switch to enterprises in Thanh Hoa, Vietnam.

Design/methodology/approach

In order to explain the behavior of micro-businesses in switching to enterprises, the authors designed a questionnaire and collected survey data from 404 micro-businesses. The generalized structural equation modeling was applied to analyze the structured model with the dichotomous dependent variable.

Findings

First, the behavior of micro-businesses to switch was indirectly affected by needs and directly affected by attitudes, perceived behavioral control, subjective norm and institutional quality. Second, the subjective norms exerted the most influence on the behavior of the micro-businesses in switching. This finding implies that (1) the behavior of the micro-businesses depended on the assessments, perceptions and views of their friends, relatives and colleagues, and (2) the behavior to switch stems mainly from the desire to improve the businesses' position in society. Finally, both formal and informal institutions play an essential role in the behavior of the micro-businesses to switch to enterprises.

Originality/value

There have been no previous studies that have applied structured models to test the behavior of micro-businesses to switch to enterprises. Furthermore, previous studies had mainly addressed the psychological factors or needs of micro-businesses. In this study, apart from the above factors, the authors discuss the impact of institutions on the behavior of micro-businesses to switch.

Keywords

Citation

Hieu, L.Q., Van, V.H. and Doanh, N.K. (2021), "Why do micro-businesses hesitate to “grow up”?", Asia-Pacific Journal of Business Administration, Vol. 13 No. 3, pp. 409-432. https://doi.org/10.1108/APJBA-02-2021-0049

Publisher

:

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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