Coping with Institutional Logics: Returnee Entrepreneurs in Vietnam – BUI CAM VAN

MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY ---------------- BUI CAM VAN COPING WITH INSTITUTIONAL LOGICS: A STUDY OF RETURNEE ENTREPRENEURS IN VIETNAM PHD DISSERTATION IN BUSINESS ADMINISTRATION HANOI - 2024 MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY ---------------- BUI CAM VAN COPING WITH INSTITUTIONAL LOGICS: A STUDY OF RETURNEE ENTREPRENEURS IN VIETNAM Specialization: Business Administration (E-PhD) Specialization code: 9340101 PHD DISSERTATION Supervisor: Assoc. NGUYEN THANH HIEU HANOI - 2024 i DECLARATION I have read and understood the University policy on plagiarism. I declare that this dissertation is my own work and has been composed by myself. All sources used are properly cited and acknowledged.

PhD Candidate ii TABLE OF CONTENTS DECLARATION. i TABLE OF CONTENTS. ii LIST OF ABBREVIATIONS .v LIST OF TABLES. vi LIST OF FIGURES .1 CHAPTER 1: LITERATURE REVIEW.

Advantages and disadvantages of returnee entrepreneurs. Roles of returnee entrepreneurs for home country. Research on returnee entrepreneurs. Theories on research for returnee entrepreneurs.

Social capital theory. Cognition and motivation theories. Limitations of these theories in returnee entrepreneurs’ research. Types of logics.

Relationship of logics. Institutional change behaviors. Actors to change institutions. Types of institutional change behaviors.

Institutional logics of returnee entrepreneurs. Institutional change behaviors of returnee entrepreneurs .43 SUMMARY OF CHAPTER 1 .44 CHAPTER 2: RESEARCH CONTEXT AND OVERALL RESEARCH DESIGN. Vietnam as a research context. Social economic background of Vietnam.

Returnee entrepreneurs in Vietnam. IT industry in Vietnam. Mixed-method research design. Definitions and types of mixed-method research.

Reason for choosing mixed-method design. Mixed-method design .56 SUMMARY OF CHAPTER 2 .59 CHAPTER 3: STUDY 1 - INSTITUTIONAL LOGICS AND COPING STRATEGIES OF RETURNEE ENTREPRENEURS. Qualitative data collection and analysis. Data collection and the sample.

Rigour and quality of the research. Logics that returnee entrepreneurs have to face when doing business in home countries. Returnee entrepreneurs’ responses when these logics interplay in their business practices. Institutional change behaviors of returnee entrepreneurs .82 SUMMARY OF CHAPTER 3 .90 CHAPTER 4: STUDY 2 - THE RELATIONSHIP BETWEEN LOGICS AND INSTITUTIONAL CHANGE BEHAVIORS.

Hypothesis development and Research Model. Quantitative data collection and analysis. Data collection and the sample. Measure reliability and validity.

Common Method Bias. 111 SUMMARY OF CHAPTER 4. 115 CHAPTER 5: DISCUSSIONS AND IMPLICATIONS. Logics guide returnee entrepreneurs’s behaviors.

Returnee entrepreneurs’ responses to multiple logics. Institutional change behaviors of returnee entrepreneurs. The relationship between logics and institutional change behaviors. Contribution to institutional literature.

Contribution to returnee entrepreneurs’ literature. Implications for returnee entrepreneurs. Implications for government officials of returnee entrepreneurs in home country. Limitations and venues for further study .124 SUMMARY OF CHAPTER 5 .127 LIST OF WORKS RELATED TO THE DISSERTATION THAT THE PHD CANDIDATE HAS PUBLISHED .152 v LIST OF ABBREVIATIONS EFA Exploratory factor analysis FDI Foreign Direct Investment FTA Free Trade Agreement GDP Gross Domestic Product HTML HyperText Markup Language ICB Institutional change behaviors ICBF Institutional change behaviors towards formal institutions ICBI Institutional change behaviors towards informal institutions ICEF International Consultants for Education and Fairs IL Innovation logic IT Information technology KBV Knowledge Based View KMO Kaiser-Meyer-Olkin MNCs Multinational corporations MOFA Ministry of Foreign Affairs MOLISA The Ministry of Labor, Invalids and Social Affairs NIC National Innovation Center OECD Organization for Economic Cooperation and Development OLS Ordinary least squares PE Perceived Effectiveness PEF Perceived Effectiveness towards ICBF PEI Perceived Effectiveness towards ICBI R&D Research and Development RBV Resource Based View REs Returnee entrepreneurs TPP Trans-Pacific Partnership USD United State Dollar VCCI Vietnam Chamber of Commerce and Industry WTO World Trade Organization vi LIST OF TABLES Table 1.

Research stream in REs’ literature. Annual entry-exit trends of Vietnamese citizens, 2012-2016 .1: Descriptions of REs’ Businesses. Characteristics of the Two Logics. Incompatible Demands Prescribed by the Two Logics.

Types of institutional change behaviors. Measurement items for Innovation logic. Measurement items for Perceived Effectiveness. Measurement items for Institutional Change Behaviors.

Reliability analysis results. Kaiser-Meyer-Olkin Measure of Sampling Adequacy for independent variables. Total Variance Explained for independent variables. Kaiser-Meyer-Olkin Measure of Sampling Adequacy for dependent variables.

Total Variance Explained for dependent variables. Rotated Component Matrix for independent variables. Rotated Component Matrix for dependent variables. Correlations among variables.

Descriptive Statistics of scores for measurement items. Descriptive statistics of summated scores for variables. Regression results with institutional change behaviors toward formal institutions as dependent variable. Regression results with institutional change behaviors toward informal institutions as dependent variable.

112 vii LIST OF FIGURES Figure 1: Structure of the dissertation. Mixed-Method designs. The research design for this study.1: Four configurations of logics among returnee entrepreneurs .2: A two-by-two matrix of REs responses to institutional complexity and their impacts on institutional change. The synergistic impact between innovation logic and perceived effectiveness toward formal institutions.

Practical perspective Returnee entrepreneurs (hereby refer as REs) are individuals who have migrated from home countries to another country (called host countries) for various reasons, such as education, work, or seeking better opportunities, and later decide to return to their home country to start their own businesses or engage in entrepreneurial activities (Drori, Honig, & Wright, 2009). When in host countries, these REs subject to distinct demands from institutional logics of these countries about “how to interpret organizational reality, what constitutes appropriate behaviour, and how to succeed” (Greenwood, Raynard, Kodeih, Micelotta, & Lounsbury, 2011; Thornton, 2004). These demands are usually different from demands of logics in home countries. When the prescriptions and proscriptions of different logics are incompatible, or at least appear to be so, they inevitably create institutional complexity and generate challenges and tensions for the entrepreneurs (Greenwood, Díaz, Li, & Lorente, 2010).

Hence, investigating on how they can cope with multiple institutional logics is valuable for REs and their ventures. In additions, returnee entrepreneurs have often gained valuable knowledge, skills, and experiences from their time abroad (Filatotchev, Liu, Lu, & Wright, 2011; X. Liu, Lu, Filatotchev, Buck, & Wright, 2010; X. Liu, Wright, Filatotchev, Dai, & Lu, 2010).

They have been exposed to different business practices, technologies, and institutional frameworks in their host countries. By leveraging their global experiences, returnee entrepreneurs can contribute to the evolution and improvement of local institutions, fostering a more dynamic and progressive business environment (Gruenhagen, Davidsson, & Sawang, 2020). Therefore, conducting research on returnee entrepreneurs and exploring their interaction with local institutions are essential to identify specific strategies that facilitate the successful adaptation of their ventures in their home countries as well as institutional development. By studying the logics, returnee entrepreneurs’ coping responses and their influence on institutions, researchers can uncover valuable insights into the factors that enable returnee entrepreneurs to navigate local contexts effectively.

Understanding these dynamics not only benefits individual returnee entrepreneurs but also contributes to the broader enhancement of local institutions. It enables 2 policymakers, support organizations, and stakeholders to develop targeted initiatives and create an enabling environment that leverages the unique strengths and contributions of returnee entrepreneurs, fostering their positive impact on local institutions and the overall entrepreneurial ecosystem. This research thus addresses studying REs in the information technology (IT) industry in Vietnam. In fact, Vietnam as a developing country is an ideal context for the study as the country has attracted a great deal of returnees each year (Ho, Seet, Jones, & Hoang, 2018; L.

Tran, Bui, Tan, & Rahimi, 2022). Additionally, IT provides an excelling context to research for the interplay of returnee entrepreneurs and institutions. There has been a significant numbers of Vietnamese individuals returning from overseas to embark on startup ventures in the IT industry SarDesai (2005), making a significant impact on the information technology industry (Kenney, Breznitz, & Murphree, 2013). Moreover, information technology (IT) is an entrepreneurial industry which is relatively new in Vietnam.

IT innovations are, for the most part, complex initiatives that involve various stakeholders and usually carried new institutional logics (Rajão & Hayes, 2009; Si, Hall, Suddaby, Ahlstrom, & Wei, 2022), making it an appropriate context to study the interplay of various logics. Theoretical perspective The interplay between returnee entrepreneurship and the institutional environment has gained increasing attention in recent years (W. Liu, Xia, Jiangyong, & Lin, 2019), yet remains limited in some areas. First, the existing literature recognizes that REs face difficulties when navigating multiple institutions and adhering to multiple logics, or institutional complexity.

However, there remains a dearth of research that specifically investigates this unique situation. Returnee entrepreneurs and their ventures in home countries offer such an interesting and unique context to investigate on this issue. Here, REs are migrants who return to their home countries to start up a new business after having gathered business experience and/or education in another, usually more developed, country (Drori et al. They have experienced at least two different institutional environments at home and host country, each is characterized dominantly by a different institutional logic which shapes and constrains their behaviours differently (Safari, Bicudo de Castro, & Steccolini, 2020).

Consequently, returnee entrepreneurs face the challenge of reconciling the diverse prescriptions stemming from these different logics. To date, there is a notable gap in research concerning the identification of the various logics at play 3 and the incompatible demands imposed by these logics on returnee entrepreneurs conducting businesses in their home countries. Additionally, limited attention has been given to understanding how returnee entrepreneurs cope in this complex situation (Gruenhagen et al. It is within this gap that the present study aims to contribute by examining the logics that returnee entrepreneurs encounter and their responses to this unique institutional complexity.

Building on earlier research that demonstrated the important role of institutions in influencing behavior, claiming that people and organizations typically behave in a fairly predictable manner (J. Meyer & Rowan, 1977; Powell & DiMaggio, 2012), scholars also acknowledged that institutions are dynamic and have the capacity to change (Scott, Ruef, Mendel, & Caronna, 2000). A thorough explanation of how people might act differently and alter the institutions that are constraining them, however, is lacking from the body of current scholarship (Holm, 1995; Seo & Creed, 2002). REs offer an unique context to address this issues by confronting with multiple logics, and by that, having capacity to act as agents of change within institutions (Gruenhagen et al.

Despite claims regarding the potential of returnee entrepreneurs as agents of change for local institutions, there is currently a lack of research that specifically examines in-depth exploration of the specific behaviors that returnee entrepreneurs engage in to affect institutional change, as well as the influence of their logics on these change behaviors (Gruenhagen et al. Research objectives and research questions The main purpose of this dissertation is to identify coping strategies of REs when facing multiple logics in doing business in home countries and to explore their possibility to change local institutions in the situation. Findings of this research would contribute to the body of literature regarding returnee entrepreneurship and institution, understanding how institutional logics guide returnee entrepreneurs’ behaviors and what they can do to change local institutions. In details, the dissertation aims at achieving the following research objectives: - Identifying different logics and their demands that guide returnee entrepreneurs’ behaviors in home country - Discovering REs’ responses when these logics interplay in their business practices in home countries - Identifying institutional change behaviors of returnee entrepreneurs in home countries 4 - Investigating the relations of logics and institutional change behaviors In order to achieve these aboved mentioned objectives, the dissertation aims at answetring four main research questions: RQ1: What are logics guiding returnee entrepreneurs’ behaviors in home country? RQ2: How do REs response when these logics interplay in their business practices in home countries? RQ3: What can returnee entrepreneurs do to change institutions in home countries? RQ4: What is the relationship between logics and institutional change behaviors of returnee entrepreneurs? 3.