Research factors affecting the applicability of environmental management accounting (EMA) in Vietnam: automobile industry enterprises case :M.A thesis - Major: Accounting

MINISTRY OF INDUSTRY AND TRADE

INDUSTRIAL UNIVERSITY OF HO CHI MINH CITY

NGUYEN THI PHUONG

RESEARCH FACTORS AFFECTING THE

APPLICABILITY OF ENVIRONMENTAL

MANAGEMENT ACCOUNTING (EMA) IN

VIETNAM: AUTOMOBILE INDUSTRY

ENTERPRISES CASE

Major: Accounting

Code: 60.34.03.01

M.A THESIS

HO CHI MINH CITY, 2022

This M.A thesis was completed at Industrial University of Ho Chi Minh City.

Science supervisor: Ph.D. Tran Ngoc Hung .................................................................

This M.A thesis was presented at Council assess of Master Thesis at University

Industrial of Ho Chi Minh City Jun 02, 2021.

The Council assess of Master Thesis include:

1. Assoc.Phrof.Ph.D Tran Quoc Thinh - Chairman

2. Ph.D Le Vu Ngoc Thanh - Reviewer No. 1

3. Ph.D Dang Anh Tuan - Reviewer No. 2

4. Ph.D Ngo Nhat Phuong Diem - Commissioner

5. Ph.D Nguyen Ngoc Khanh Dung - Secretary

CHAIRMAN DEAN FACULTY OF

ACCOUNTING AND AUDITING

MINISTRY OF INDUSTRY AND TRADE

INDUSTRIAL UNIVERSITY OF

HO CHI MINH CITY

SOCIALIST REPUBLIC OF VIET NAM

Independence - Freedom – Happiness

THE DUTY OF THE MASTER THESIS

Full name: Nguyen Thi Phuong ID: 17001051

Date of Birth: July 20, 1987 Address: Hop Ly, Ly Nhan, Ha Nam

Major: Accounting Code: 60.34.03.01

I. Title name:

Research factors affecting the applicability of environmental management

accounting (EMA) in Viet Nam: Automobile industry enterprises case.

DUTY AND CONTENT:

Determine the factors that impact on the possibility of environmental management

accounting application in Vietnamese automobile industry enterprises.

Measure the level of each factor.

Based on the research results, the author suggests solutions to enhance the

possibility of environmental management accounting applications in Vietnamese

automobile industry enterprises for improving their performance.

II. DATE OF DUTY: The decision No.1874/QĐ-ĐHCN, October 14, 2019.

III. DATE OF COMPLETION: …………………………………..

IV. SCIENCE SUPERVISOR: Ph.D. Tran Ngoc Hung

Ho Chi Minh City, May 21, 2021

SUPERVISOR

(Signature, Full name)

HEAD OF DEPARTMENT

(Signature, Full name)

DEAN FACULTY OF ACCOUNTING AND AUDITING

(Signature, Full name)

i

ACKNOWLEDGMENTS

First of all, I would like to express my sincere appreciation and gratitude to school

administrators and all lectures of the Industrial University of Ho Chi Minh City,

especially my PhD. Tran Ngoc Hung - my direct lecturer and supervisor for my

thesis. I would like also to take this opportunity to thank all CEO, CFO, Chief

accountants and Staff of Accounting Department at case study companies for

providing me the necessary information and completing questionnaires for this

thesis

Many thanks to my classmates and colleagues for their silent support throughout the

course.

Finally, I would like to thank my family for giving me the energy and

encouragement in the whole process of this postgraduate research.

.

ii

ABSTRACT

Purpose: The purpose of this study is to detect and measure the impact of factors on

the applicability of environmental management accounting in Vietnam: automobile

industry enterprises case.

Design/ methodology: This research was conducted using a mixed research design

approach of qualitative research methods and quantitative research methods. Survey

questionnaires were collected from 352 subjects of industry automobile enterprises

at the big city and industrial zones in Vietnam. By using Descriptive Statistical

Method, Regression Analysis SPSS 26.0 software

Findings: The research results show that there are 7 factors affecting the ability to

apply environmental management accounting in Vietnamese automobile industry

enterprises, including: Coercive pressure; Normative pressure; Mimetic pressure;

Business environmental uncertainty; Environmental Strategy; Benefits when

applying environmental management accounting; Task complexity.

Implications: This study systematized the theoretical basis, providing an overview

of environmental management accounting. Research results are also the basis

necessary and useful references for other relevant scientific researches to

environmental management accounting. At the same time, the author proposes

solutions to contribute to improving the applicability of environmental management

accounting in Vietnam: automotive industry enterprises case.

iii

DECLARATION

I certify that:

Except where due acknowledgement has been made, the work is that of the author

alone;

The work has not been submitted previously, in whole or in part, to qualify for any

other academic award;

The content of the thesis is the result of work which has been carried out since the

official commencement date of the approved research program; and

Any editorial work, paid or unpaid, carried out by a third party is acknowledged.

I assure you this is my own research. The research results and conclusions in the

thesis are honest, not copied from any sources and any form. References to sources

(if any) have been cited and the source of references is properly regulated.

M.A CANDIDATE

( Signature, Full name)

Nguyen Thi Phuong

iv

TABLE OF CONTENTS

TABLE OF CONTENTS.......................................................................................... iv

LIST OF FIGURES................................................................................................. viii

LIST OF TABLES .................................................................................................... ix

LIST OF ACRONYMS............................................................................................. xi

INTRODUCTION.......................................................................................................1

CHAPTER 1 LITERATURE REVIEW ................................................................7

1.1 Oversea key researches..................................................................................7

1.1.1 The overall research related to the diffusion of EMA and the need for

adopting EMA.....................................................................................................7

1.1.2 Research about the roles of EMA application in enterprises..................9

1.1.3 Research on factors impacting the EMA application in enterprises.....10

1.2 Key research in Viet Nam ...........................................................................13

1.2.1 The overall research related to the general perspectives of EMA and

current EMA application in Vietnam................................................................13

1.2.2 Researches about the role of EMA application in Vietnamese

enterprises .........................................................................................................14

1.2.3 Research on factors impacting the EMA application in enterprise ......14

1.3 Gap research and the aims of study.............................................................15

1.3.1 Determining the gap research ...............................................................15

1.3.2 The aims of study..................................................................................16

CHAPTER 2 THEORETICAL FOUNDATIONS...............................................18

2.1 Overview of Environmental management accounting ................................18

2.1.1 The Development of Environmental Management Accounting...........18

2.1.2 Definition and Categorization of Environmental Accounting..............21

2.1.3 Definition of Environmental Management Accounting .......................24

2.1.4 Types of Information Includes under Environmental Management

Accounting ........................................................................................................27

2.1.5 Benefits of Environmental Management Accounting Application ......29

2.1.6 Content of Environmental management accounting ............................31

2.2 Some characteristics of the automobile industry enterprises. .....................40

2.2.1 Some characteristics of automobile industry enterprises. ....................40

2.2.2 Advantages and disadvantages when applying EMA at automobile

industry enterprises in Vietnam. .......................................................................42

v

2.3 Factors affecting the ability to apply EMA in enterprises...........................43

2.4 Background Theory .....................................................................................46

2.4.1 Institutional theory................................................................................47

2.4.2 Contingency theory...............................................................................50

CHAPTER 3 RESEARCH METHODOLOGY...................................................53

3.1 Research design ...........................................................................................53

3.2 Research framework ....................................................................................54

3.3 Research procedure......................................................................................55

3.4 Determination of influencing factors and research model. .........................57

3.4.1 Determination of influencing factors....................................................57

3.4.2 Research model.....................................................................................58

3.5 Qualitative research method ........................................................................59

3.5.1 Qualitative method design ....................................................................59

3.5.2 Results of expert discussions................................................................61

3.5.3 Build of scale and encode data .............................................................65

3.5.4 Research hypothesis design ..................................................................69

3.6 Quantitative research ...................................................................................70

3.6.1 Building the questionnaires ..................................................................70

3.6.2 Sampling investigation method ............................................................71

3.6.3 Analysis method of the research data ...................................................72

3.6.4 Regression model..................................................................................76

CHAPTER 4 RESEARCH RESULTS AND DISCUSSION ..............................79

4.1 Sample descriptive statistics........................................................................79

4.2 Research data...............................................................................................81

4.3 Evaluate the scale ........................................................................................82

4.3.1 Evaluate the reliability of the scale.......................................................82

4.3.2 Evaluate the scale value........................................................................85

4.4 Multivariate regression analysis..................................................................92

4.4.1 Overall regression model......................................................................92

4.4.2 Verifying the suitability of the model...................................................92

4.4.3 Regression weight test ..........................................................................93

4.4.4 Check the multi-collinearity phenomenon............................................94

4.4.5 Check for residual autocorrelation........................................................94

vi

4.4.6 Verify the normal distribution of the residue .......................................95

4.4.7 The test assumes the variance of the error (remainder) remains

constant. ............................................................................................................96

4.4.8 Test research hypotheses ......................................................................97

4.4.9 Check the difference in degrees of accountants at the business. ..........98

4.4.10 Check for differences about the degree.............................................99

4.4.11 Check out the difference in the type of business ownership...........101

4.5 Discussion..................................................................................................103

CHAPTER 5 CONCLUSION AND RECOMMENDATION...........................108

5.1 Conclusion .................................................................................................108

5.2 Recommendations .....................................................................................110

5.2.1 Coercive pressure................................................................................110

5.2.2 Normative pressure .............................................................................111

5.2.3 Benefits of EMA.................................................................................111

5.2.4 Task complexity..................................................................................111

5.2.5 Mimetic pressure.................................................................................112

5.2.6 Business environmental uncertainty ...................................................112

5.2.7 Environmental strategy.......................................................................112

5.3 Limitations and Possible future research...................................................113

5.3.1 Limitations of the thesis......................................................................113

5.3.2 Possible future research ......................................................................113

LIST OF RESEARCH RELATED TO THE AUTHOR’S THESIS ......................116

REFERENCES........................................................................................................117

APPENDIX No.1: SUMMARY OF FACTORS AFFECTING THE

ENVIRONMENTAL ACCOUNTING APPLICABILITY....................................126

APPENDIX No.2 : LIST OF EXPERTS INTERVIEWED AND THE QUESTION

INTERVIEWED .....................................................................................................130

APPENDIX No.3: SUMMARY OF THE FACTORS AFTER INTERVIEWING

EXPERTS ...............................................................................................................133

APPENDIX No.4: SURVEY QUESTIONNAIRES ..............................................135

APPENDIX No.5 CRONBACH'S ALPHA RELIABILITY TEST RESULTS.....140

APPENDIX No.6: EFA FACTORS ANALYSIS RESULTS ................................144

APPENDIX NO.7: RESULTS OF CORRELATION MATRIX TEST;

RELEVANCE OF MODEL; VARIANCE ANOVA; REGRESSION

COEFFICIENTS .....................................................................................................156

vii

APPENDIX No.8: STANDARD DISTRIBUTION RESULTS OF RESIDUALS

.................................................................................................................................158

APPENDIX No.9: LIST OF SURVEY PARTICIPANTS .....................................160

CURRICULUM VITAE .........................................................................................176

viii

LIST OF FIGURES

Figure 2. 1 EMA at the core of sustainable development.........................................24

Figure 3. 1 Research framework ...............................................................................55

Figure 3. 2 Research procedures...............................................................................56

Figure 3. 3 Research model.......................................................................................58

Figure 4. 1 Histogram graph of normalized remainder.............................................95

Figure 4. 2 P-P Plot plot of normalized remainder ...................................................96

Figure 4. 3 Scatter plot between predicted value and regression residue .................96

ix

LIST OF TABLES

Table 4. 1 Research sample information...................................................................79

Table 4. 2 Analytical results Cronbach's Alpha shows the scale of the independent

variables. ...................................................................................................................83

Table 4. 3 Analysis results Cronbach's Alpha for the scale of the dependent variable

...................................................................................................................................84

Table 4. 4 Test KMO and Bartlett for scales of independent variables....................85

Table 4. 5 Table of variance extracted for the scale of the independent variables...86

Table 4. 6 Rotation factor matrix ..............................................................................86

Table 4. 7 KMO and Bartlett testing for scale of independent variables (2nd time)

...................................................................................................................................88

Table 4. 8 Table of variance extracted for the scale of independent variables (2nd

time). .........................................................................................................................88

Table 4. 9 Matrix of rotational factors (2nd time). ...................................................89

Table 4. 10 KMO and Bartlett tests for dependent variable scale. ...........................91

Table 4. 11 Table of variance extracted for the scale of the dependent variable......91

Table 4. 12 The dependent variable factor matrix ....................................................92

Table 4. 13 Summary of regression model ...............................................................93

Table 4. 14 ANOVA table .......................................................................................93

Table 4. 15 Regression weighting table ....................................................................94

Table 4. 16 Test there are differences in the degree of applicability of EMA in

automobile industry enterprises between 2 groups from intermediate / college above

and from university above.........................................................................................98

Table 4. 17 Table comparing the mean of the applicability of EMA in the

automobile industry enterprises between 2 groups of intermediate / college above

and university or higher. ...........................................................................................99

Table 4. 18 Verifying the differences in the degree of applicability EMA in the

automobile industry enterprises among 4 groups of Degrees College, University,

Master, and PhD doctor.............................................................................................99

x

Table 4. 19 The Anova test with differences in the effects on the applicability of

EMA in the automotive industry enterprises of 4 groups of Degrees: College,

University, Master, and PhD doctor........................................................................100

Table 4. 20 Table comparing mean values about differences the effects in the

applicability of EMA in the automotive industry enterprises of 4 groups of Degrees:

College, University, Master, and PhD doctor .........................................................100

Table 4. 21 Examining the differences in the applicability of EMA in the

automobile industry enterprises of 6 groups of State-owned enterprises, 100%

foreign-invested enterprises, Joint-ventures, and Companies Limited Liability,

Shares with State Capital, Limited Company, Shares without State Capital, Other

type ..........................................................................................................................101

Table 4. 22 Test of Anova with differences in the applicability level of EMA in the

automobile industry enterprises of 6 groups of State owned enterprises, 100%

foreign invested enterprises, and joint venture enterprises Limited Liability

Company, State Capitalized Joint Stock Company, Company Limited, Joint Stock

Company without State Capital, Other type. ..........................................................101

Table 4. 23 Table comparing average values about the applicability of EMA in the

automobile industry enterprises of 6 groups of State owned enterprises, 100%

foreign invested enterprises, and joint venture enterprises Limited Liability

Company, State Capitalized Joint Stock Company, Company Limited, Joint Stock

Company without State Capital, Other type. ..........................................................102

xi

LIST OF ACRONYMS

AAA American Accounting Association

EA Environment accounting

EFA Exploratory factor analysis

EMA Environmental Management Accounting

EMS Environmental management System

IFAC International Federation of Accountants

MFA Material Flow Accounting

LCA Life Cycle Analysis

UNDSD United Nations Division for Sustainable Development

USEPA US Environmental Protection Agency

1

INTRODUCTION

1. Rationales of the research

Nowadays, environmental issues have been concerned seriously world-wide, as the

increasing number of significant environmental threats to the future of humanity.

These include, but not limited to, not only natural disasters such as hurricanes,

tsunami, global warming but also human-made disasters including oil spills, plastic

solid waste, the over-consumption of non-renewable resources, global air pollution

(Jones, 2010). These incidents have given hostage to fortune, and therefore led to

calling for organizations around the world to consider its environmental

performance seriously (Lee, 2011). So adopting cleaner and safer, more friendly

environmental practices have become more and more aware by the public, with the

help of increased media coverage (Burritt et al., 2003). Environmental management

accounting (EMA), as part of Environmental Accounting, may assist management

to address environmental impacts of organization activities, particularly by

providing related environmental information for making decisions. Even though

EMA has still no definite boundary or denomination, it has emerged as an interface

between management accounting and environmental management (Bennett et al.,

2003). Many recent studies on EMA from different perspectives reflect the

importance of accounting when pursuing environmental management strategies

(Schaltegger et al., 2013). There was numerous research on the environmental

management systems and these first ones have been done in the developed

economies (Hsiao et al., 2014). However, EMA’s studies in developing countries

are scant, and according to the work of (Xiaomei, 2004; Jalaludin et al., 2010) in

China and Malaysia show that the majority of enterprise in developing countries

were considered that they were still far behind advanced countries in terms of

understanding and applying EMA techniques and methods.

Air pollution can imperil human health and welfare of plants and animals, resulting

from emissions from industrial sources, power and heat generation, waste disposal,