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    http://jmk.sagepub.com/ Journal o f Macro marketing

    http://jmk.sagepub.com/content/early/2011/12/05/0276146711424159The online version of this article can be found at:

    DOI: 10.1177/0276146711424159published online 7 December 2011Journal of Macromarketing Audhesh K. Paswan and Trang P. Tran

    Vietnam and Entrepreneurial Private Enterprises: A Macromarketing Perspective

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    Vietnam and Entrepreneurial PrivateEnterprises: A Macromarketing Perspective

    Audhesh K. Paswan1

    and Trang P. Tran1

    AbstractThis study focuses on the phenomenon of entrepreneurial private enterprises and their macromarketing implications inVietnama vibrant economy transitioning from a centrally planned economy to the current system of socialist-oriented marketeconomy. Relying on the writings on entrepreneurship and associated theoretical frameworks (including the complex adaptivesystem [CAS] perspective), especially in emerging economies, this study develops a framework for capturing the macromarketingimplications of entrepreneurial private enterprises. Further, this study suggests that entrepreneurial private enterprises playa crucial role in the economic well-being (a key aspect of quality of life) of citizens in Vietnam; and the growth in entrepreneurialprivate enterprises is influenced by nonroutine actions by key stakeholders such as the government; and associated with theavailability of skilled human resources.

    KeywordsEntrepreneurial private enterprise, economic well being, quality of life, Vietnam

    IntroductionVietnam, as we know it now, was formed as the SocialistRepublic of Vietnam in 1976 after a tumultuous history filled with foreign occupations, first by China until the middle of thetenth century, then by France starting in 1858, followed byJapan during World War II and France again until 1954, a

    protracted war with United States ending in 1975, and a war with neighboring Cambodia (197889). For the next ten years,Vietnam remained a closed socialist economy, virtually iso-lated from the western world, saddled with the US embargo,and heavily dependent on the Union of Soviet Socialist Repub-lics (USSR; former Soviet Union). Finally, after a decade of isolation, economic devastation and poor agriculture leadingto starvation conditions and social unrest, in 1986, Vietnaminitiated the Doi Moi (meaning renovation) reforms, leadingto the current system of socialist-oriented market economy.The reforms have resulted in a phenomenal growth of privateenterprises and helped normalize diplomatic relationshipwith the United States, Japan, and other Western and EastAsian countries (Bekefi 2006; Dana 1994; Neupert, Baughn,and Dao 2006; Nguyen 2009; Nguyen et al. 2009a, 2009b).This dynamic interplay among politics, public policy, society,market systems, and entrepreneurship makes Vietnam an idealstudy environment for macromarketers (Dixon 2002; Hunt1981; Mittelstaedt, Kilbourne, and Mittelstaedt 2006; Shapiro,Tadajewski, and Shultz 2009). It is not surprising that Vietnamhas been the focus of study in several macromarketing papers aswell as in recent annual macromarketing conferences (e.g., Nguyen 2009;Shultz 1997). While the aforementionedresearch

    certainly has added to our understanding of Vietnam, macro-marketing implications of entrepreneurial enterprisesoften privately owned small- and medium-sized enterprises (Ronna sand Ramamurthy 2001)have not been a primary focus amongscholars. Ardrey, Pecotich, and Shultz (2006), who studied female entrepreneurship in Vietnam, Cambodia, and Laos, pro-vide one exception. This gap in the literature provides theimpetus for this study.

    Recent investigations with a focus on Vietnam from a macro-marketing perspective (not counting numerous studies with his-tory and military focus) could be grouped into three broad clusters. One group of studies has focused on the political and economic aspect of Vietnam and has tried to examine the prosand cons of policy changes in the country and their implications(e.g., Shultz and Ardrey 1997; Shultz and Pecotich 1997; Shultz,Speece, and Pecotich 2000). A second group has focused on thequality of life and its antecedents in Vietnam (e.g., Shultz 1997).A third group has focused on small and medium enterprises(SMEs 1 ) and entrepreneurial ventures in Vietnam (e.g., Benzing,Chu, andCallanan2005;Neupert, Baughn, andDao2006;Nguyen2009; Nguyen et al. 2009a, 2009b).

    1 Department of Marketing and Logistics, University of North Texas, Denton,TX, USA

    Corresponding Author:Audhesh K. Paswan, Department of Marketing and Logistics,College of Business,University of North Texas,1155 Union Circle #311160, Denton, TX 76203,USAEmail: [email protected]

    Journal of Macromarketing000(00) 1-13 The Author(s) 2011Reprints and permission:sagepub.com/journalsPermissions.navDOI: 10.1177/0276146711424159http://jmk.sagepub.com

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    While these studies have enhanced the knowledge aboutVietnam and the relationships between policy changes and market systems, they merely provide an initial peek into thisdynamic transitional economy. Even the studies with a focuson SMEs in Vietnam have only started to scratch the surfaceof the complex and intricate linkage between private entrepre-neurial enterprises and macromarketing implications. Part of the problem could be that detailed data about private entre- preneurial enterprises and their macromarketing implicationsin the Vietnamese context are not easily accessible. Another problem could be the lack of a clear conceptual framework for entrepreneurship, especially when viewed within the context of emerging or transitional economies (S irec and Mocnik 2010).There is also some confusion about terms such as entrepren-eurship, private enterprises, and SMEs. While, most use theseterms synonymously, others suggest subtle differences. For example, Zhu, Hitt, and Tihanyi (2006) suggest that SMEs inemerging markets could be either incumbent or entrepreneurialSMEs and differentiate between these two types of SMEs.

    Further, Kearney, Hisrich, and Roche (2009) argue that entre- preneurship is not an exclusive characteristic of the privatesector, it could also be found in the public sector. Notwith-standing this debate, the authors rely on specific writings inthe area of entrepreneurship (e.g., Hills 1994; Knight 1921;Leibenstein 1968; Schumpeter 1934 and 1942; Shane and Venkataraman 2000; and Venkataraman 1998). Our positiontherefore is that most SMEs would be owned by entrepreneurs,whereas not all entrepreneurs would own SMEs (some mayown large enterprises); however, both SMEs and entrepren-eurial ventures will be privately owned. Thus the authorsfocus on private sector entrepreneurship, and not on the publicsector entrepreneurship, and examine the growth of privately

    owned entrepreneurial enterprises and its macromarketingimplications.

    Extant literature reveals life quality to be a fundamentaloutcome of the macromarketing ethos (Layton 2009; Peterson2006; Peterson and Malhotra 2006; Shultz 1997). In turn, thedomain of life quality has been found to include a host of dimensions such as poverty, cost of living, economy, infra-structure, freedom, culture, environment, crime rate, employ-ment, and health, to name a few (Anand and Ravallion 1993;Dasgupta and Weale 1992; Howell and Howell 2008; Layton2009; Peterson 2006; Peterson and Malhotra 2006; Slottje1991; Weede 1993). In this study, the authors focus on twodimensions to capture the quality of lifeper capita incomeand employment attributed to entrepreneurial enterprises. Our decision to focus on these two measures is based on literaturethat suggests welfare includes the objectively measurableresources that enable an individual to meet basic human needs(Bognar 2005; Costanza et al. 2008). Some of these resourcesinclude income and assets, education, and objective healthstatus. Insights about them are available through archival data(Inglehart et al. 2008; Shackman, Liu, and Wang 2005). Theauthors rely on the archival data from the General StatisticsOffice of Vietnam (2010) and use the classification nonstateenterprises to capture the growth of entrepreneurial private

    enterprises. Further, the authors use the gross domestic product(GDP) per capita and employment due to private enterprisesas indicators of quality of life; and education data to capturethe human capital associated with growth of private enter- prises. In addition, the authors rely on existing literature thathas focused on the growth of private enterprises in Vietnam,to find support for the proposed framework.

    From a theoretical perspectiverelying on the complexadaptive systems (CAS) framework, literature on entrepreneur-ship, and evidence from the existing literature on Vietnam aswell as macroeconomic data from the General Statistics Officeof Vietnamthis study offers a framework capturing themacromarketing implications of entrepreneurial private enter- prises in Vietnam. The authors hope that this framework offersguidelines for future research with Vietnam as a focus. From amanagerial and public policy perspective, this study may beuseful as a blueprint for grassroots development in emergingand transitional economies, especially the growth of entrepre-neurial private enterprises and their implications for quality

    of lifea key macromarketing outcome. This perspective of entrepreneurship is consistent with the scope of macromarket-ingmarketing systems and their impact and consequences onsociety, and vice versa (Dixon 2002, 737; Hunt 1981, 7). In thisstudy, the authors posit that entrepreneurship is a critical ele-ment of the marketing system in Vietnam, which is influenced by and in turn influences various dimensions of Vietnamesesociety.

    The authors next present a review of literature on SMEs inemerging economies, including Vietnam (although Vietnamhas been categorized as a transitional economy). This isfollowed by a discussion of the theoretical foundation for understanding the entrepreneurial changes in transitional econo-

    mies. Finally, the authors presentevidences from the Vietnameseeconomy pertaining to the growth of private enterprises (entre- preneurial) and their macromarketing implications.

    Entrepreneurial Enterprises MacromarketingThe notion of entrepreneurship and entrepreneurial enterpriseshas attracted a lot of attention from very diverse constituents,such as researchers, politicians, practitioners, media, and society. Despite the generally acknowledged importance of entrepreneurship in regional development and the develop-ment of emerging and transitional economies, literature onentrepreneurship is still at an early stage, especially in termsof a theoretical framework, its domain and its nomologicalnetwork. In terms of definition and domain, there is still littleagreement (cf. Kaufmann and Dant 1998 for a literaturereview). However, some key common themes emerge. Someof them include profit seeking as goal and innovation (Hills1994; Schumpeter 1934); risk taking, leadership, motivation,and ability to resolve crises (Leibenstein 1968); creativedestruction (Schumpeter 1942), risk taking (Knight 1921);and creation of new enterprise (Low and MacMillan 1988;Gartner 1985).

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    With regard to its antecedents, several theoretical frameworkshave been used to explain the emergence of entrepreneurialenterprises in emerging economies. One stream of literaturehas focused on understanding who the entrepreneur is and what he/she does (Shane and Venkataraman 2000; S irec and Mocnik 2010; Venkataraman 1997). Others have used thenotion of changes in supply of talent with entrepreneurialcharacteristics or changes in the environmental conditionsleading to a demand for entrepreneurial ventures (Thornton1999). More recently, Arikan (2010) borrows from literatureon complex system perspective (Arthur, Durlauf, and Lane1997; Foster 2005) and conceptualizes economies as CAS,which then is used to explain the evolution of entrepreneurs.The CAS consists of multiple interdependent subsystems and actors. The outcome of this adaptive system is determined by the complex interaction among the subsystems and actors,and characterized by feedback mechanism and nonlinearity.Together, this complex and nonlinear adaptive system createsa synergistic environment for entrepreneurial growth. The

    extent and speed of entrepreneurial transformation are thenhypothesized to depend on four factors:

    1. presence of nonroutine action triggers by pioneering actorsfrom different subsystems;

    2. presence of actors who engage in network-building activ-ities that facilitate the creation of ties between pioneeringactors from different subsystems;

    3. presence of idiosyncratic success stories that reinforceearly nonroutine actions; and

    4. effective dissemination of information about idiosyncraticsuccess stories come together in time and space to initiateand sustain a positive feedback loop (Arikan 2010, p 165).

    The CAS perspective offers an improvement on the supply demand perspective as well as personality and activities per-spective of entrepreneurship, that is, it offers a more dynamic perspective to the emergence of entrepreneurship than other extant perspectives that are somewhat static (Arikan 2010).Several researchers have contributed to the elements of CASwithout actually using CAS. They have identified key actorsand subsystems aiding the emergence of entrepreneurship.Silva (2010) suggests that countries with higher-quality humancapital opt for more risky projects and have higher productiv-ity. The positive effect of human capital on nonlinear economicgrowth is also reinforced by others such as Growiec (2010) and Kottaridia and Stengos (2010). Walder and Nguyen (2008)study the pattern of economic development in China and Vietnam and state that the scale of economic enterprises and the allocation of property rights shape the social structure and influence income distribution (p. 251). Kooijman-van Dijk and Clancy (2010) study the impact of infrastructure (energysupply) on the growth of private enterprises, jobs, and well- being of society at large, and found a positive relationship. Infact, they argue that the effect of better infrastructure is non-linear. Similarly, several authors have highlighted the impor-tance of institutions and institutional reforms on economic

    performance of firms. They suggest that provincial competi-tiveness (through better institutions that provide better marketinformation, secure ownership, and human resource training)is a significant predictor of cross-province differences in firm performance. Carman and Dominguez (2001) highlight theimportance of policies such as economic liberalization inredefining the competitive structure of the marketplace and provide an impetus for strategic organizational change.

    With regard to the outcome of entrepreneurship, the criticalrole of entrepreneurship in the development of economies isacknowledged in the literature (Arikan 2010; Bateman 2000;Jones and Tilley 2003; Shane and Venkataraman 2000). Entre- preneurial enterprises have also been suggested as one of thekey drivers of nation development (Kazem and Van der Heij-den 2006; Hallberg 2000) and a stepping stone for robust mar-keting activity (Bekefi 2006). Others echo the crucial role of entrepreneurs in the development of emerging economies and prosperity (e.g., Cecora 2000; Matthews, Qin, and Franklin1996; Oostendorp, Trung, and Tung 2009; Dana 1994; Ronna s

    and Ramamurthy 2001). Cecora (2000) also identifies somedifferences between entrepreneurs and corporate executives,for example, local and regional ties of entrepreneurs, highdegree of identification with the product or service quality of the firm, and the kind and amount of personal risk. Onifade and Abiola (2010) associate entrepreneurship with several macro-marketing outcomes including quality of life/standard of living,employment for self and others, talent development, experi-ence and training, healthy competition, boosting of self-pride,increase in goods and services, reduction in crime and vices,tax payment, closer interaction among stakeholders, and flex-ible business operations.

    Similar sentiments are expressed by Okpara and Kabongo

    (2009). In their study of Malaysia, Thailand, and Philippines,Habaradas (2009) suggest that SMEs are seen as a means of reducing poverty, and broadening and deepening the industrialstructure. Jones and Tilley (2003) suggest that SMEs are instru-mental in economic growth, job creation, innovation and promotion of enterprises. Jones, Snelgrove, and Muckosy(2006) highlight the importance of small businesses in national prosperity and suggest that inclusion of women further enhances this process. Carter (2011) argues that entrepreneurialreward includes not only financial reward but also variouselements that make up a broader concept of economic well- being. Hills (1994, 16) defines entrepreneurship as The pro-cess that takes place in different environments and settings thatcauses changes in the economic system through innovation brought about by individuals who generate or respond to eco-nomic opportunities that create value for both these individualsand society.

    Relying on the entrepreneurship literature, the authorssurmise that entrepreneurship and growth of entrepreneurialenterprises need appropriate conditions and some push fromkey players (e.g., Arikan 2010; Amit, Glosten, and Muller 1993; Gartner 1985; Layton 2009; Low and MacMillan 1988;Schumpeter 1934; Thornton 1999). While literature revealsseveral determinants for the emergence and growth of

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    entrepreneurship, these could be grouped into the followingsubsystems Legal, political and regulatory environment (e.g., ownership of property); Resources (e.g., economic, intel-lectual and human capital); Infrastructure (e.g., transportation,communication and information); and Market opportunities(e.g., market conditions). These conditions then encourage theentrepreneurs to take risk, innovate, and create new enterprisethat are entrepreneurial in nature. Further, the authors proposethat the emergence and growth of entrepreneurial enterpriseswill lead to enhanced quality of life (e.g., enhanced economicwell-being through higher income and employment) for theentrepreneurs as well as the members of the society at large.Finally, the enhanced quality of life will influence the deter-minants through a feedback loop, which accelerates or decele-rates the growth of entrepreneurial ventures, depending uponthe desirability of the outcome (i.e., quality of life). Arikan(2010) argues that this feedback loop results in a constant stateof dynamic disorganization and subsequent self-organization.A similar interactive relationship between marketing systems,economic growth and quality of life has also been hypothesized by Layton (2009). This proposed framework is presented inFigure 1. The authors next discuss each of these subsystemswithin the context of Vietnam.

    Evidence from VietnamMuch has been written about the growth of entrepreneurialventures (although the researchers have used a variety of termssuch as entrepreneurial enterprises, private enterprises, SMEssynonymously), its antecedents, and some of its outcomes.Although a lot of these writings are conceptual, rely on experi-ential knowledge base (perhaps due to lack of reliable and detailed data), and are extremely rich in description, they donot provide a framework to explain the emergence and growth

    of an entrepreneurial economy in Vietnam (which is transition-ing from a centrally planned economy). Thus, the authors willuse the findings from this rich literature base as evidence tosupport the proposed framework. In addition, the authors willuse the archival temporal data available from the GeneralStatistics Office of Vietnam (2010). The General StatisticsOffice (GSO) defines private enterprise as nonstate owned enterprises (NSOE; as against state owned and foreign invest-ment owned). The authors use this definition to capture thegrowth of entrepreneurial private enterprises and try to get asense of associative relationships between the growth of private enterprises and some of its purported antecedents and outcomes. Given the gaps in reliable data, the authors focuson the period between 2000 and 2009 and examine the emer-gence of private enterprises (often SMEs 2 and entrepreneurial)and explore their macromarketing implications. The authorsnext present supporting evidencefirst the emergence of and growth of entrepreneurial ventures followed by the determi-nants and next the outcome of such growth in entrepreneurship.

    Growth of Private EnterprisesThe archival data from GSO about the number of units for thethree types of enterprises, including entrepreneurial enterprises[defined as nonstate owned enterprises (NSOE) by GSO] are presented in Table 1 and Figure 2.

    The evidence clearly indicates that the privately owned units have been growing at a rate faster than both the stateowned enterprises and foreign owned or foreign direct invest-ment (FDI) enterprises. In terms of share of all enterprises inVietnam, the NSOE have grown from 83 percent in 2000 to96 percent in 2009 (in comparison, the state-owned enterpriseshave declined from 14 percent to close to 1 percent; and theFDI enterprises have remained consistent at around 3.62.6

    Growth of Entrepreneurial

    Enterprises

    Quality of Life for Members of Society

    Legal, Political and Regulatoryenvironment

    Resources e.g., Economic and Human Capital

    Infrastructure e.g., Transportation,Communication

    Market Conditions

    Entrepreneurswith UniversalCharacteristics

    Figure 1. Entrepreneurial enterprisesmacromarketing implications.

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    T a

    b l e 1

    . N u m

    b e r o

    f E n t e r p r i s e s ;

    N u m

    b e r o

    f E m p l o y e e s

    ( 1 , 0 0 0 ) b y O w n e r s h

    i p ;

    A n n u a

    l A v e r a g e

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    f E n t e r p r

    i s e

    b y O w n e r s

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    d p e r C

    a p i t a

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    2 0 0 0

    2 0 0 1

    2 0 0 2

    2 0 0 3

    2 0 0 4

    2 0 0 5

    2 0 0 6

    2 0 0 7

    2 0 0 8

    2 0 0 9

    G r o w t h R a t e

    ( % )

    N u m

    b e r o

    f E n t e r p r i s e s

    T o t a l

    4 2 , 2

    8 8

    5 1 , 6

    8 0

    6 2 , 9

    0 8

    7 2 , 0 1 2

    9 1 , 7

    5 6

    1 1 2 , 9 5 0

    1 3 1 , 3 1 8

    1 5 5 , 7 7 1

    2 0 5

    , 6 8 8

    2 4 8 , 8 4 7

    4 8 8 . 4 6

    S t a t e - o w n e d e n t e r p r i s e

    5 , 7 5 9

    5 , 3 5 5

    5 , 3 6 3

    4 , 8 4 5

    4 , 5 9 7

    4 , 0 8 6

    3 , 7

    0 6

    3 , 4 9 4

    3 , 2

    8 6

    3 , 3 6 9

    4 1

    . 5 0

    N o n s t a t e e n t e r p r i s e

    3 5 , 0

    0 4

    4 4 , 3

    1 4

    5 5 , 2

    3 7

    6 4 , 5

    2 6

    8 4 , 0

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    1 0 5 , 1 6 7

    1 2 3 , 3 9 2

    1 4 7 , 3 1 6

    1 9 6

    , 7 7 6

    2 3 8 , 9 3 2

    5 8 2 . 5 8

    F o r e

    i g n

    i n v e s t m e n t e n t e r p r i s e

    1 , 5 2 5

    2 , 0 1 1

    2 , 3 0 8

    2 , 6 4 1

    3 , 1 5 6

    3 , 6 9 7

    4 , 2

    2 0

    4 , 9 6 1

    5 , 6 2 6

    6 , 5 4 6

    3 2 9 . 2 5

    N u m

    b e r o

    f e m p l o y e e s

    T o t a l

    3 , 5 3 6 , 9 9 8

    3 , 9 3 3 , 2 2 6

    4 , 6 5 7 , 8 0 3

    5 , 1 7 5 , 0 9 2

    5 , 7 7 0 , 6 7 1

    6 , 2 3 7 , 3 9 6

    6 , 7 1 5

    , 1 6 6

    7 , 3 8 2 , 1 6 0

    8 , 1 5 4 , 9 0 0

    8 , 9 2 7 , 9 0 0

    1 5 2 . 4 1

    S t a t e - o w n e d e n t e r p r i s e

    2 , 0 8 8 , 5 3 1

    2 , 1 1 4 , 3 2 4

    2 , 2 5 9 , 8 5 8

    2 , 2 6 4 , 9 4 2

    2 , 2 5 0 , 3 7 2

    2 , 0 3 7 , 6 6 0

    1 , 8 9 9

    , 9 3 7

    1 , 7 6 3 , 1 1 7

    1 , 6 3 4 , 5 0 0

    1 , 7 4 1 , 8 0 0

    1 6

    . 6 0

    N o n s t a t e e n t e r p r i s e

    1 , 0 4 0 , 9 0 2

    1 , 3 2 9 , 6 1 5

    1 , 7 0 6 , 8 5 7

    2 , 0 4 9 , 8 9 1

    2 , 4 7 5 , 4 4 8

    2 , 9 7 9 , 1 2 0

    3 , 3 6 9

    , 8 5 5

    3 , 9 3 3 , 1 8 2

    4 , 6 9 0 , 9 0 0

    5 , 2 6 6 , 5 0 0

    4 0 5 . 9 6

    F o r e

    i g n

    i n v e s t m e n t e n t e r p r i s e

    4 0 7

    , 5 6 5

    4 8 9 , 2 8 7

    6 9 1

    , 0 8 8

    8 6 0 , 2 5 9

    1 , 0 4 4 , 8 5 1

    1 , 2 2 0 , 6 1 6

    1 , 4 4 5

    , 3 7 4

    1 , 6 8 5 , 8 6 1

    1 , 8 2 9 , 5 0 0

    1 , 9 1 9 , 6 0 0

    3 7 0 . 9 9

    A n n u a

    l c a p i t a l o

    f e n t e r p r i s e s

    b y o w

    n e r s

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    ( b i l l i o n

    V N D )

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    9 9 8 , 4 2 3

    1 , 1 8 6 , 0 1 4

    1 , 3 5 2 , 0 7 6

    1 , 5 6 7 , 1 7 9

    1 , 9 6 6 , 5 1 2

    2 , 4 3 0 , 7 2 7

    3 , 0 3 5

    , 4 1 6

    4 , 1 5 7 , 9 0 2

    5 , 7 2 8 , 1 0 0

    7 , 7 8 0 , 2 0 0

    6 7 9 . 2 5

    S t a t e - o w n e d e n t e r p r i s e

    6 7 0

    , 2 3 4

    7 8 1 , 7 0 5

    8 5 8

    , 5 6 0

    9 3 2 , 9 4 2

    1 , 1 2 8 , 8 3 1

    1 , 3 3 3 , 9 3 5

    1 , 5 7 5

    , 9 5 9

    1 , 9 5 6 , 8 4 9

    2 , 3 3 9 , 2 0 0

    3 , 0 0 9 , 2 0 0

    3 4 8 . 9 8

    N o n s t a t e e n t e r p r i s e

    9 8 , 3

    4 8

    1 4 2 , 2 0 2

    2 0 2 , 3 9 6

    2 8 9 , 6 2 5

    4 2 2 , 8 9 2

    6 0 7 , 2 7 1

    8 5 4 , 8 4 8

    1 , 4 4 2 , 3 1 9

    2 , 3 9 5 , 2 0 0

    3 , 5 4 9 , 2 0 0

    3 5 0 8

    . 8 2

    F o r e

    i g n

    i n v e s t m e n t e n t e r p r i s e

    2 2 9

    , 8 4 1

    2 6 2 , 1 0 7

    2 9 1

    , 1 2 0

    3 4 4 , 6 1 1

    4 1 4

    , 7 8 9

    4 8 9 , 5 2 1

    6 0 4 , 6 0 9

    7 5 8 , 7 3 4

    9 9 3 , 8 0 0

    1 , 2 2 1 , 8 0 0

    4 3 1 . 5 8

    E d u c a t

    i o n s e c t o r

    N u m

    b e r o

    f U n i v e r s

    i t i e s

    ( 1 0 )

    1 7 . 8

    1 9 . 1

    2 0 . 2

    2 1 . 4

    2 3

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    percent). Other researchers have also noticed this growth of

    private enterprises (e.g., Ardrey, Pecotich, and Shultz 2006;Maruyama and Trung 2010; Nam, Sonube, and Otsuka 2010; Nguyen et al. 2009a and b; Nguyen and Ramachandran 2006;and Oostendorp, Trung, and Tung 2009). These trends provideclear indication that the Vietnamesemarketplace is changingdra-matically andis shiftingtoward privateenterprises as an engine of growth at the grassroots level. It seems that the Doi Moi policychanges and subsequent associated events are having desired effects. The logical next question is whether these changes inthe Vietnamese marketplace are having the desired effect on thequality of life in the Vietnamese society?

    Quality of Life Associates of PrivateEnterprisesBased on the extant literature on measures to capture quality of life (Bognar 2005; Costanza et al. 2008; Farid and Lazarus2008; Inglehart et al. 2008; Shackman, Liu, and Wang 2005),the authors focus on two objective measures of resources thatenable an individual to meet basic human needsper capitaGDP and employment. The archival data for the per capitaGDP and the employees by type of ownership for Vietnam are presented in Table 1 and Figure 3. The plots in Figures 2 and 3(and the corresponding numbers in Table 1) indicate that thegrowth in the per capita GDP mirrors the increase in number of enterprises owned by nonstate entities. The exception to thissteady growth is seen in the last two years (200709), where the per capita GDP seems to have declined, possibly due to theglobal financial crisis.

    However, when we look at the employment figures, we see asteady increase in labor employed by the nonstate enterprisesnot just in numbers (growth rate of over 400 percent, whichis higher than the other two types of enterprises), but also interms of percentage of total employees (increased from about29 percent to almost 59 percent). In comparison, the percentageof labor employed by state enterprises has declined from59 percent to 20 percent; and the percentage of labor employed

    by FDI enterprises is around 21 percent in 2009. Interestingly,

    the labor force employed by the FDI enterprises also declined during 200709 period (23 percent to 21 percent), possibly dueto the global financial crisis. The authors also conducted a posthoc analysis using bivariate correlation between per capitaGDP and number of labor employed by state, non-state, and foreign investment enterprises (due to small data points theauthors only looked at the direction of the correlations and notthe absolute magnitude of the correlation) and found the asso-ciations to be positive.

    Further, Ricky (2011) asserts that the NSOEs contributiontoward GDP surpassed the contribution by the state-owned enterprises in 2005 and the gap has been steadily increasing.Thus, growth in private enterprises seems to be associated

    with increase in employment, ensuring that people have jobsand they can take care of their own and their familys qualityof life needs. Regarding the financial ability to take care of quality of life related needs, the trends in Figures 2 and 3 sug-gest that while growth in the private sector seems to have a positive association with buying power, buying power is alsoaffected by the events around the worldthat is, global finan-cial crisis.

    Other researchers have similarly found that the emergenceand growth of private sector enterprises have a positive effecton the well-being of not just the entrepreneur and his or her family but also enhance the well-being of others in their com-munities (Ardrey, Pecotich, and Shultz 2006; Oostendorp,

    Trung, and Tung 2009; Walder and Nguyen 2008). Oosten-dorp, Trung, and Tung (2009) moreover found that household private enterprises increased the income of the household withthe business and reduced the between-household inequality. Insummary, there seems to be a positive association between thegrowth of entrepreneurial privately owned enterprises and well-being, in terms of employment and income, for entrepre-neurs and their households and their broader communities. Theauthors next examine evidence supporting the factors that pro-vide the impetus for the growth of entrepreneurial nonstateenterprises.

    Figure 2. Per capita GDP; enterprises by ownership as percentage of total.

    Figure 3. Per capita GDP; employees by ownership as percentage of total.

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    Antecedents to Growth of PrivateEnterprisesThis evidence (based on data from GSO and extant literature)clearly indicates that the privately owned enterprises have beengrowing in terms of not just sheer numbers and share of econ-omy but also in terms of their impact on the well-being(employment and income) of the citizens of Vietnam. Arikan(2010) suggests that the growth of entrepreneurship is deter-mined by the presence of non-routine action triggers by pio-neering actors from different subsystems, and the presence of actors who engage in network-building activities that facilitatethe creation of ties between pioneering actors from differentsubsystems (p. 165). Table 2 presents the chronologicalsequence of events in recent history to help bring into focussome of the nonroutine actions by key players in the contextof Vietnam. The information in Table 2 (from BBC News2011; Quang-Tuan Luong (2000); U.S. Department of State2010), when combined with the economic numbersfor exam- ple, number of units and employees, and average capital per enterprise (presented in Table 1 and Figures 2, 4, and 5) for thethree types of enterprises, including entrepreneurial enterprises

    should help in understanding the reasons behind the growth of entrepreneurial enterprises.

    Legal, Political, and Regulatory FactorsA look at the historical account of Vietnam indicates one of the reasons for Doi Moi is poor economic conditions faced by the Vietnamese population during 197686 (Dana 1994; Neupert, Baughn, and Dao 2006). While the authors focus onthe economic data for the years 200009, it is not too difficultto visualize that there will be time lags between the causes(nonroutine actions by key actors) and effect (growth of privateenterprises and changes in per capita GDP). Thus the authors seethe effects of Doi Moi , initiated in 1986 by the Vietnamese Gov-ernment, followed by a series of nonroutine actions by other actors such as the US lifting the embargo; visits by JacquesChirac, Bill Clinton,andVladimir Putin;membershipsin Associ-ation of South-East Asian Nations (ASEAN), Asia-Pacific Eco-nomic Cooperation forum (APEC), World Bank, InternationalMonetary Fund (IMF), Asian Development Bank (ADB), and World Trade Organization (WTO); and a visit by Vietnamese

    Table 2. VietnamNonroutine Actions by Key Actors

    Time Political, Economic, and Cultural Events

    1930 Ho Chi Minh found the Indochinese Communist Party (ICP)1940 Invasion of Indochina by Japan1945 Ho Chi Minh announces Vietnams independence1946 France goes to war against Vietnam

    1954 French defeat at Dien-Bien-Phu1955 Geneva agreements. Separation of North and South Vietnam at the 17th Parallel1964-1975 American war1976 Socialist Republic of Vietnam is officially proclaimed1977 Join United Nations1979 Vietnam ousts the Khmer Rouge regime of Pol Pot in Cambodia. In response, Chinese troops cross Vietnams northern border.

    They are pushed back by Vietnamese forces1986 DoiMoi or broad economic reforms1987 Vietnam opens to tourists1989 Vietnam removes troops from Cambodia1994 End of American embargo1990s Membership into World Bank, IMF, and ADB1995 Membership of Association of South-East Asian Nations (ASEAN)1997 Official visit of French president Jacques Chirac during the 7th Francophone summit1998 Membership of Asia-Pacific Economic Cooperation forum (APEC)2000 Official visit of President Bill Clinton2001 Official visit of Russian President Vladimir Putin2001 Host ASEAN summit2001 Bilateral Trade Agreement (BTA) between the United States and Vietnam2002 First visit of a Vietnamese head of state (President Tran DucLuong) to France2004 Vietnam organizes the 5th EuropeAsia summit at Hanoi2006 Host APEC2007 Elected to the United Nations Security Council2007 Membership of WTO2007 USVietnam Trade and Investment Framework Agreement (TIFA)2009 Trans-Pacific Partnership (TPP) as an associate member

    Note: Years in boldface are the focal years in this study.Source: BBC News (2011); Quang-Tuan Luong (2001); and US Department of State (2010).

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    president Tran Duc Luong to France, to continue through to our focal period. These nonroutine actions (by other actors outsideVietnam) cumulatively signal an acceptance of the new Vietnam by the rest of the world.

    This period was also marked by a significant growth in the NSOE and foreign investment, and a decline in the state-owned enterprises (as a percentage of total numbers). It seems to indi-cate a deliberate pattern, which could be driven by policychanges and changes in infrastructure. Thus, it is not inconcei-vable to see an associative relationship, albeit with a time lag, between these sequences of events (Table 2) capturing achange in the political environment, economic policy, and eveninternational network, and the growth of entrepreneurial pri-

    vate enterprisesthat is, the reduction in the number of state-owned enterprises and the corresponding growth in NSOE (Table 1 and Figure 2).

    Resource Availability The importance of economic resources in the growth of privateentrepreneurialventureshas beenamply acknowledged in the lit-erature (Ardrey, Pecotich, and Shultz. 2006). In the case of Viet-nam, the growth of nonstate enterprises seems to parallel thegrowth in the average capital for thenonstate enterprises (seeFig-ures 2 and 4). The numbers in Table 1 and Figure 4 indicate thatthe average capital per enterprise (as a percentage of total) has been increasing at a phenomenal rate for the NSOE (in compari-son, this percentage has been declining for both state-owned and foreign-owned enterprises). Even though the state-owned enterprises still possess a large chunk of the total capital, thereseems to be a deliberate shift in the overall composition of thethree key players with NSOE gaining ground at a rate higher than both state owned and foreign owned (FDI) firms. The deliberatenature of the growth in capital per enterprises forNSOE (in com- parison to the state and FDI owned enterprises) seems to bodewell for the decisions taken by the key actors and the sequenceof events presented in Table 2.

    Researchers have also acknowledged the role of another supply side factorthe education sectorwhich suppliesskilled human resource in any economy, including Vietnam(Au, Altman, and Roussel 2008; Blundell et al. 1999; Gnyawaliand Fogel 1994; Jorgenson and Fraumeni 1992; Nam, Sonobe,and Otsuka 2010; ONeill 1995). The plot in Figure 5 (and Fig-ure 2) indicates that the growth in number of private enterprisesdoes mirror the growth in the education sector. In fact, thisupward trend is also in synch with the increase in labor forceemployed by entrepreneurial private sector. One interestingobservation is the decline in the number of University studentsduring 200607. One possible explanation is that during theseyears, the number of Vietnamese students going abroad for

    education increased. In the United States alone, the number of Vietnamese students increased by 10 percent per year duringthese years (Open Doors 2010). Australia was another very popular destination. While some labeled this trend as braindrain, this could also be seen as an indication of success in gov-ernment policies and steps taken by the Vietnamese Govern-ment to make Vietnam a more open environment, a keydriver for growth of private enterprises.

    Infrastructure and Market ConditionsIn a recent study, Tran, Grafton, and Kompas (2009) argue thatmarket information, land tenure, and labor training institutionshave a positive effect on firm performance. Further, Nguyenet al. (2009a, 2009b) highlight the critical role of governmentin encouraging the growth of entrepreneurial private venturesthrough creation of favorable market conditions and resourceinfrastructure. They also stress the importance of infrastructureand supportive policies for the development of entrepreneurialenvironment and ultimately the entrepreneurial firms.Kooijman-van Dijk and Clancy (2010) highlight theimportance of electricity in smooth functioning and performanceof small enterprises in rural areas. Phong and Yoshi (2009) iden-tify several determinants of performance of new private ventures

    Figure 4. Per capita GDP; percentage of annual average capital byownership. Figure 5. Per capita GDP and education sector.

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    in Vietnam, for example, exporting, geographic location, finan-cial resources, and ownership structure. Benzing, Chu, and Call-anan (2005) find that the business problems encountered consistof excessive competition, unreliable employees, and difficulty ingetting short and long-term capital. Nam, Sonobe, and Otsuka(2010) suggest that easy access to export markets and adoptionof a vertically integrated channel system enhance private enter- prise performance. Nguyen and Ramachandran (2006) stress theimportance of financial institutions. Ardrey, Pecotich, and Shultz(2006) highlight the roleof social networking, infrastructure, and market conditions in the growth and success of women entrepre-neurs. Maruyama and Trung (2010) alsoacknowledge the role of infrastructure (transportation) and presence of favorable marketconditions for the emergence and growth of the informal food bazaar in urban Hanoi. A similar conclusion was reached by Nguyen et al. (2009a, 2009b) in their study of SMEs in Viet-naminfrastructure and market conditions are important for theemergence and growth of SMEs.

    Finally, Arikan (2010) argues that the feedback and nonli-

    nearity in CASs blur cause-effect relationships and make pre-dictions and control extremely difficult (p. 167). Recentresearch indicates that the citizens of Vietnam and the privateentrepreneurs seem to be satisfied with the progress made by Doi Moi policies (e.g., Nguyen 2009; Benzing, Chu, and Callanan 2005). Thus, it is not inconceivable to link the growthin private enterprises to policy changes, such as Doi Moi and other nonroutine actions by key actors of a CAS in the formof Vietnam as well as outside Vietnam, and argue that as peoplefeel more satisfied with the outcomes from growth of privateenterprises, they are likely to provide positive feedback to sucha movement. After all, Doi Moi was in response to poor condi-tions created by centrally planned economic policies and its

    results.

    SummaryThe objective of this study is to investigate the growth of entre- preneurial private enterprises and their macromarketing implica-tions in Vietnama vibrant economy transitioning from acentrally planned economy to the current system of socialist-oriented market economy. The authors use the theoretical frame-work of CAS (cf. Arikan 2010) to integrate different aspects of growth of private enterprises in Vietnam, that is, its antecedents(e.g., actions and events within various subsystems by key stake-holders) and consequences (e.g., quality of life for citizens of Vietnam). The extant literature and archival data from GSO of Vietnam suggest that entrepreneurship does play a critical rolewithin the Vietnamese marketplace, and it has important macro-marketing implications. The evidence suggests an associativerelationship between entrepreneurial private enterprises (i.e.,nonstate enterprises) and various macromarketing subsystemssuch as legal, political, and regulatory environment, infrastruc-ture, resources availability, and market structure. Entrepreneur-ship is also found to be associated with quality of life inVietnam, captured by the per capita income and employment.Finally, the authors suggest that this sense of well-being (or lack

    of) based on quality of life provides feedback to the macro sub-system. In summary:

    1. Growth in entrepreneurial enterprises (captured by thegrowth in non-state enterprises) seems to parallel keyevents in various subsystems of the macromarketing envi-ronment (education sector, capital market, legal, regula-tory, public policy, and international relations) in Vietnam.

    2. Growth in entrepreneurial enterprises seems to parallel theeconomic well-being of the citizens at large (captured bythe per capita GDP and employment in nonstate enter- prises) in Vietnam.

    3. Enhancement of quality of life is likely to affectmacromarketing, thus further enhancing the growth of entrepreneurship.

    The results of this study have implications for the key actors(e.g., government policy makers, foreign governments, interna-tional trade and regulatory bodies, public at large and other sta-

    keholders) in Vietnam. Their decisions and the sequence of events that follow must be carefully managed to encourage thegrowth of entrepreneurship (e.g., Arikan 2010). For this, policymakers must pay attention to the relevant subsystems (e.g.,education sector, financial institutions, market conditions, and infrastructure). Further, the findings about the positive associ-ation between growth of entrepreneurial private (nonstate)enterprises and the economic well-being of the Vietnamese cit-izens makes intuitive sense and corroborates existing literature(cf. Ardrey, Pecotich, and Shultz 2006; Oostendorp, Trung, and Tung 2009; Walder and Nguyen 2008). From a theoretical per-spective, the findings of this study reinforce the notion thatentrepreneurship is a socioeconomic phenomenon and is intri-

    cately and dynamically linked with other institutions and phe-nomena in the marketplace. Hence, entrepreneurship should beviewed from a more holistic macromarketing perspective and not just from somewhat narrowly defined economic or organi-zational perspectives.

    From a macromarketing perspective, growth of entrepre-neurship and private sector enterprises should be perceived asa driver of the improvement of economic well-being of citi-zens. It generates wealth and employment at the grassrootslevel and has a substantial impact on societal systems (Okparaand Kabongo 2009; Habaradas 2009; Jones and Tilley 2003).Policy makers in Vietnam and other emerging and transitionaleconomies should look at policies that would provide favorableconditions for the emergence and growth of private enterprises(Bhasin and Venkataramany 2010; Ronna s and Ramamurthy2001). Policy makers should also look at alternate modes of private enterprises such as franchising (Alon 2004; Bhasinand Venkataramany 2010) or public sector entrepreneurship(Kearney, Hisrich, and Roche 2009). The authors believe thatthe findings of this study help with the argument that people atthe lower end of the income bracket or citizens of poorer econo-mies also have a right to the quality of life that the rich enjoy, butoften are left out because of their lack of purchasing ability, and this may be particularly true in emerging and transitional

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    economies (cf. Hammond and Prahalad 2004). Policies thatencourage the growth of entrepreneurial ventures could be a pos-sible solution.

    This study is not without limitations. First, it relies primarilyon archival data with a window of only ten years, and evidenceand conclusions from existing studies with a focus on entrepre-neurship in Vietnam. Future studies should look at a longer time horizon to get a better picture of the complex and non-linear relationships between the nonroutine actions of keyactors in Vietnam and perhaps in other emerging economies,and the resultant outcomes such as emergence and growth of private enterprises and entrepreneurship, and eventually qual-ity of life. Future research should also look at other elementsof CAS within an emerging and/or transitional economy suchas Vietnam to better understand the relationships between thedrivers and outcomes of entrepreneurship. However, this would entail a long-term historical look at one CAS and perhaps eth-nographic study. In addition, in this study, the authors focus ononly two aspects of quality of life: per capita income and

    employment. While existing literature on emerging economieshas highlighted the relationship between economic well-beingand quality of life (Farid and Lazarus 2008; Hammond and Prahalad 2004; Shultz 1997), some argue that as income or purchasing power increases, subjective quality of life decreases(Kapur 2005; Max-Neef 1995). Hence, future studies should look at other aspects of quality of life and investigate their relationship with growth in entrepreneurship. Finally, theauthors would urge researchers to collect primary data to drawconclusions about the relationships among some of theelementsof CAS such as legal, political, and regulatory dimensions,sources availability, market conditions, infrastructure, theemergence and growth of entrepreneurship, and quality of life.

    The authors hope that their conceptual framework provides animpetus for further investigation in the critical area of entrepre-neurship in emerging and transitional economies, to facilitate better understanding of the role of private enterprises, entrepre-neurship, and SMEs in enhancing the well-being of individuals,families, communities, and Vietnam and other nations.

    AcknowledgmentsThe authors would like to thank the special edition editor Clifford Shultz and the three anonymous reviewers for their insightfulcomments.

    Declaration of Conflicting Interests

    The author(s) declared no potential conflicts of interest with respectto the research, authorship, and/or publication of this article.

    FundingThe author(s) received no financial support for the research, author-ship, and/or publication of this article.

    Notes1. Small- and medium-scale enterprises (SMEs) are a very

    heterogeneous group. They include a wide variety of firms-village handicraft markets, small machine shops, restaurants, and

    computer software firms that possess a wide range of sophistica-tion and skills, and operate in wide range of markets and socialenvironment. SMEs usually operate in the formal sector of theeconomy, employ mainly wage-earning workers, and participatemore fully in organized markets. The operational definition of SMEs varies by country and is usually based on the number of employees or the value of assets. The lower limit for small-scaleenterprises is usually set at 5 to 10 workers and the upper limitat 50 to 100 workers. The upper limit for medium-scale enter- prises is usually set between 100 and 250 employees (Hallberg2000).

    2. In the case of Vietnam, small- and medium-sized enterpriseshave been defined as any registered independent businessestablishments with registered capital not exceeding 10 billionVND (about US $600,000) or annual average number of permanent workers not exceeding 300 (with minor variationsacross industry sectors such as agriculture, forestry, and fishery;industry and construction, and Trade and service; Ricky 2011).

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    Bios

    Audhesh K. Paswan (PhD, University of Mississippi) is on thefaculty of the Department of Marketing & Logistics, University of North Texas. His research interests include franchising, channels, NPD, macromarketing, service marketing, cross-cultural and globalmarketing. His work has appeared in the Journal of the Marketing, Decision Science Journal, Journal of Retailing, Journal of Interna-tional Marketing, European Journal of Marketing, Journal of Busi-ness Research, Journal of Public Policy and Marketing, Industrial Marketing Management, and Journal of Services Marketing amongothers.

    Trang P. Tran (PhD candidate, Department of Marketing & Logis-tics, College of Business, University of North Texas, USA) received his bachelors degree in economics from Hanoi Agricultural Univer-sity, Vietnam and an MBA in International Industrial Managementfrom Esslingen University of Applied Sciences, Germany. Hisresearch interests include B2B Marketing, Marketing Strategy, Con-

    sumer Behavior, and International Marketing. His research hasappeared in the National FORUM of Multicultural Issues Journal and several national conferences.

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