Asia Pacific Management Review 27 (2022) 303e311

H O S T E D BY Contents lists available at ScienceDirect

Asia Pacific Management Review

journal homepage: www.elsevier.com/locate/apmrv

Factors of application of activity-based costing method: Evidence from a

transitional country
Uyen Tu Tran a, Hien Thi Tran b, *
a
Foreign Trade University, 91 Chua Lang, Dong Da Dist, Ha Noi, Viet Nam
b
Vietnam National University Hanoi, VNU University of Economics and Business, 144 Xuan Thuy St., Cau Giay Dist., Hanoi, Viet Nam

a r t i c l e i n f o a b s t r a c t

Article history: This study examines the factors in the application of the activity-based costing (ABC) method in firms in
Received 6 March 2021 a transitional country. The study adopts a quantitative approach by developing a Logit regression model.
Received in revised form The study tests the model in a sample of 71 publicly-listed Vietnamese pharmaceutical companies in
15 October 2021
2017 when Resolution Number 10, issued by the Central Political Party of Vietnam, took place. The
Accepted 4 January 2022
Available online 14 March 2022
primary data was collected from a company survey. The study finds that indirect cost proportion,
competition pressure in price and quality, and product diversification significantly affect a firm's decision
of whether to implement the ABC method. In Vietnam, most of the pharmaceutical companies are state-
Keywords:
Competition
owned. Consequently, the use of a research context whereby the market economy is combined with state
Cost structure regulation to test the hypothesized factors is of value. Our findings have implications for managerial
Management accounting practice and public policy.
Product diversification © 2022 The Authors. Published by Elsevier B.V. on behalf of College of Management, National Cheng Kung
University. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/
licenses/by-nc-nd/4.0/).

1. Introduction traditional costing methods (Cooper, 1988; Rundora et al., 2013);

The Activity-Based Costing (ABC) system was first demonstrated
by Johnson and Kaplan (1987) as a new, advanced method for
calculating production costs. The ABC system can be defined as a
system to measure the cost and effectiveness of activities, products,
and services on the basis of resources used to create the product or
service. The ABC systems estimate the costs of resources used or
spent in a given process, consisting of a set of activities, to produce
products or services. In this system, it is assumed that resources are
consumed by the activities needed to produce the products or
services (Almeida & Cunha, 2017). In the first phase, the resources
are allocated to the activities, and in the second phase the activities
are allocated to the products. This allocation is made in both cases
through cost drivers.
To date, a number of research works on the activity-based
costing (ABC) method in many countries have focused on the
following main issues: firstly, the comparison between the ABC and
* Corresponding author.
E-mail addresses: uyentt@ftu.edu.vn (U. Tu Tran), hientt.hsb@vnu.edu.vn (H. Thi
Tran).
Peer review under responsibility of College of Management, National Cheng
Kung University.
secondly, the application rate of the ABC method in one sector or a
single country (Roztocki & Schultz, 2003; Van Nguyen & Brooks,
1997); thirdly, the benefits and difficulties of the ABC approach
(Cotton et al., 2003; Lou & Wang, 1998); fourthly, the factors that
affect the application of this method (Kaiser, 2019; Rundora et al.,
2013); and fifthly, ABC studies for decision models in a particular
case (Duran & Afonso, 2019; Kim et al., 2011; Tsai & Jhong, 2019).
The previous studies indicate that the ABC approach is an
effective way to estimate the costs of production (Vetchagool et al.,
2020) while considering environmental issues (Tsai, Lan & Huang,
2019) and that it can calculate costs more accurately than tradi-
tional costing methods (Cooper, 1988; Kim & Kim, 2011; Mortaji
et al., 2013; Rundora et al., 2013). To estimate costs precisely,
companies have been urged to consider an effective approach to
improving operational performance. As the ABC method can
directly calculate the various costs of labor and resources instead of
using a single factor as the basis of allocation, this accounting
approach has been adopted by various industries, such as aviation
(Tsai et al., 2012), metal manufacturing (Tsai et al., 2019), con-
struction (Fang & Ng, 2011; Tsai et al., 2014), and footwear (Tsai &
Jhong, 2019). Even though ABC is widely known and has been
successfully applied and is also the topic for various research papers
in many countries, there is a lack of in-depth studies of this

https://doi.org/10.1016/j.apmrv.2022.01.002
1029-3132/© 2022 The Authors. Published by Elsevier B.V. on behalf of College of Management, National Cheng Kung University. This is an open access article under the CC
BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
U. Tu Tran and H. Thi Tran
accounting method using the research context of a transitional
economy and in a specific industry significantly regulated by the
government.
Vietnam is a densely populated country in South East Asia. Since
1975, this country has had only one political party, the Communist
Party of Vietnam. On June 3, 2017, the Communist Party of Vietnam,
the ruling party of the nation, issued Resolution Number 10 stating
“development of the private economy into the important momentum
of the nation's market economy with socialism orientation”.1 This is
the first time in Vietnam's history that the ruling communist party
has promulgated an official and crucial document recognizing the
economic role of the private sector as “the important momentum of
the nation's market economy with socialism orientation”. This mile-
stone, which strongly affects the national product market, has
driven the pharmaceutical industry in Vietnam to make a strategic
change towards privatization.
As of Dec 2017, 93.3% of the pharmaceutical companies in
Vietnam are state-owned enterprises (SOEs) that made 98.6% of
total sales of the industry.2 The largest pharmaceutical companies
in Vietnam were state-owned. In the Vietnam Report ranking of the
top 10 most nationally prestigious pharmaceutical companies,3 9
out of 10 are SOEs. Among the 15 top-ranked pharmaceutical
companies listed in the two stock exchanges in Vietnam, 14 have
government shareholding. The pharmaceutical product market in
Vietnam is led by SOEs, which is different from developed
economies.
The Vietnamese pharmaceutical industry has, in recent years,
experienced both internal and external competitive pressures. This
industry was in the past considered a stable sector in Vietnam,
always maintaining high profitability given the periods of global
crisis caused by developed countries. Financial statements of listed
companies showed that the ratio of profitability to the owner's
equity of big local companies was always over 30% and the average
of the industry reached a peak of 25% from 2010 to 2013 regardless
of global economic recessions.4 Only after 2014 did difficulties
appear in this industry. From then on, the growth targets such as
return on equity (ROE) dropped to 19.6%5 from 21.4%, while earn-
ings per share declined approximately one-third in early 2018.6 In
the hope of improving this situation, not only do local enterprises
have to change strategic products from low-profit generic to high-
value targeted drugs, they also have to focus on management ac-
counting to cut down spending while improving operational
efficiency.
The ABC method produces more accurate costing of products by
essentially converting broad indirect costs into direct costs of
production (Brewer et al., 2017). It determines the costs of the
various sources of indirect costs and allocates these expenses to the
specific activities that use them. The ABC method provides man-
agement with valuable information that can be used to improve the
efficiency of processes and increase product profit margins. This
accounting method seems suitable for the pharmaceutical industry,
which has many indirect costs, diverse products, complex
1
http://vneconomy.vn/nghi-quyet-so-10-ve-kinh-te-tu-nhan-co-tac-dong-lon-
the-nao-20190502093722211.htm. Retrieved on Feb 5 2020.
2 sources in innovation, creativeness, reputation, knowledge, talent,
https://www.yellowpages.com.vn/srch/vietnam/pharmaceutical_products-
wholesalers_and_manufacturers.html. Retrieved in Dec 2017.
3
https://vietnamreport.net.vn/Top-10-Cong-ty-Duoc-uy-tin-nam-2019-8949-
1006.html. Retrieved on Dec 16 2019.
4
https://www.slideshare.net/GMPcVietnam/phan-tich-bao-cao-nganh-duoc-
2015. Retrieved on Dec 16 2019.
5
https://www.slideshare.net/GMPcVietnam/phan-tich-bao-cao-nganh-duoc-
2015. Retrieved on Jan 11 2021.
6
https://www.bvsc.com.vn/NewsDetail.aspx?NewsID¼604782. Retrieved on Jan
11 2021.
304
Asia Pacific Management Review 27 (2022) 303e311
production processes and is a highly competitive industry. How-
ever, as the Vietnamese state-owned pharmaceutical companies
were subsidized by the government in the past, these pharma-
ceutical companies did not need adopting a cost accounting
method such as ABC to improve their cost efficiency and compet-
itiveness. Therefore, the application of ABC was very rare in Viet-
nam before 2017.
The contribution of this study is the use of the environment of a
government-led industry in a transitional economy that follows the
ideology of a market mechanism and socialism as the context for
research to have an insight into a very important industry that has
the mission of improving the quality of life of citizens. This paper
uses the 2017 data of pharmaceutical companies in Vietnam as a
case study. This study is of further importance given the COVID-19
pandemic announced by the World Health Organization on March
11, 2020, which is a test for the role of government in market
intervention towards the goal of protecting public health. This
research offers solutions to local enterprises in transitional coun-
tries for better cost management, to enhance business efficiency.
Underpinned by the theory of the resource-based view (RBV)
(Barney, 1991; Wernerfelt, 1984, 1995), this study develops the
hypotheses and a Logit regression model to test the hypothesized
impacts. The data for testing the hypotheses were collected from a
company survey using the Likert scale to measure the variables. The
study finds three significant factors influencing the application of
ABC in the sampled pharmaceutical companies: enterprise cost
structure, competition strategy in price and quantity, and diversi-
fication of products. The paper contributes to the theory by sup-
porting the RBV perspective in transitional economies through the
use of a unique dataset. For this, the paper pushes forward the
application of the RBV theory to answer how resources and capa-
bilities affect company behavior and outcomes in a transitional
economy regulated by the government.
The rest of the paper is organized as follows. The literature re-
view and hypotheses development section present the theoretical
framework, the relevant prior studies, and the hypotheses. Next are
the research methodology followed by the results and the discus-
sion, followed by the conclusion, implication, and limitations of the
paper.
2. Theoretical framework and hypotheses development
2.1. Theoretical framework
Today the world presents new and challenging strategic issues
for organizations on which the theory of resource-based view of
firms (Wernerfelt, 1984, 1995) can shed light. From the initial pio-
neering research in the mid-1980s through to the present, the
study of resources - tangible vs. intangible assets and capabilities -
has produced a large body of theoretical and empirical work
(Dierickx & Cool, 1989; Priem & Butler, 2001). It involves the re-
sources and capabilities of organizations and managers (Amit &
Schoemaker, 1993). Under the RBV theory, a firm's internal envi-
ronment is the deciding factor in the firm's success in competition
(Peteraf, 1993). RBV attaches the key importance to a firm's re-
and change management (Prahalad & Hamel, 2006; Teece et al.,
1997). These resources have competitive advantages when they
are of value, rare, and irreplaceable.
This study uses RBV as the theoretical lens to examine the fac-
tors driving firms' adoption of the ABC method. In the light of RBV,
resources are the key to a firm's superior performance; the value,
rare, and irreplaceable resource enables the firm to gain and sustain
competitive advantage (Barney, 1991).
U. Tu Tran and H. Thi Tran
2.2. Hypotheses development
The ABC system allocates both manufacturing and non-
manufacturing costs to the product. This approach identifies and
allocates all non-manufacturing costs such as commission, trans-
portation costs, and maintenance costs for specific goods (Mishra &
Vaysman, 2001). The ABC method uses many cost allocation ob-
jects, depending on the number of activities in the production
process. Thus, from the aspect of an enterprise's administration, the
system is evaluated as a tool for an insight into activities, providing
particular information about the structure of production costs and
supporting marketing campaigns (Lou & Wang, 2013).
The ABC system has been used for decades in developed coun-
tries because of the efficient and effective recording of direct costs
vs. indirect costs of the resources in the firms, thereby gaining
firms' competitive advantages. Previous studies explain how
organizational factors influence firms’ adoption of the ABC method
in the context of a developed country. Anderson (1995) lists six
factors affecting the adoption of the ABC method in the context of
the US automobile industry; they are the total number of em-
ployees, cost information, business type, product diversification,
the importance of cost information, indirect cost proportion of the
total cost. Using the survey data of British management accoun-
tants in the manufacturing industry, Brierley (2015) denotes five
factors, including competition, product customization, the per-
centage share of non-manufacturing overhead costs, financial ac-
counting requirements, and operating unit size.
In the ABC system, resources are consumed by activities and
these are consumed by the products and services. The distribution
of resources by activities and the subsequent allocation to the
products is done through cost drivers (Almeida & Cunha, 2017).
With the resource-based view in mind, the next sections will
explain the factors that affect the application of the ABC method
and develop hypotheses accordingly.
2.2.1. Cost structure
In innovative firms, the direct cost of a product, which is directly
calculated in the production costs of the product, tends to decrease
in comparison with the indirect cost of the product. As the indirect
costs tend to increase, it is more complicated to allocate the indirect
costs accurately to the production costs. Nowadays, non-
production costs increasingly account for a large proportion of
the total costs of enterprises, so allocating non-production costs
into the computation of cost of sales will provide the complete and
comprehensive cost of sales information. This helps managers
make more accurate decisions.
To address this complication, firms need a costing method to
calculate costs more precisely. Previous studies show that com-
panies with a high indirect cost ratio are more likely to apply the
ABC system (Almeida & Cunha, 2017; Maelah & Ibrahim, 2007) as it
helps control costs better than traditional accounting methods
(Salawu & Ayoola, 2012). In contrast, companies with small indirect
cost ratios of total cost were less interested in the ABC system
(Brierley, 2015; Clarke, 1992). As such, the following hypothesis is
developed:
H1. Companies with a higher indirect cost ratio are more likely to
apply the ABC system.
2.2.2. Product diversification
Products can be diversified in a variety of forms, sizes,
complexity, material, and process. In Cooper and Kaplan (1988)
view, as product diversification becomes more important, tradi-
tional methods of fixed cost accounting have more limitations,
which might run the risk of inaccurate and simple allocation of
305
Asia Pacific Management Review 27 (2022) 303e311
production costs such as direct labor costs (Cooper, 1988). The ABC
method is proposed to overcome these limitations by offering a
more accurate cost allocation.
Bjørnenak (1997) divides the total production of the companies
in his study into 4 groups: Group 1: 1 to 10 products; Group 2:
11e100 products, Group 3: 101e1000 products, Group 4: more than
1000 products. The result of the study showed that companies with
large production are more likely to apply ABC. Specifically, the
companies in Group 4 that adopt the ABC method accounts for 34%,
compared to only 15% of Group 1. Likewise, and Salawu and Ayoola
(2012) also suggest that firms with a wide product range tend to
apply the ABC method rather than traditional methods. Almeida
and Cunha (2017) cite the case of a Portuguese manufacturing
firm to emphasize that a method of estimating the costs of the
various products produced in the same company in a rigorous and
precise way has turned into a strategic objective. When a company
has a wider range of products, they are in more need of calculating
the cost price of each of the products more accurately. Therefore,
they are in more demand of an accounting method useful for cost
calculation, leading to the following hypothesis:
H2. Production companies that have more product diversification
have a greater tendency to apply the ABC system.
2.2.3. Competition capability
Given the increasing market competition, productive functions
should be considered as an important strategic issue for the crea-
tion of a competitive advantage. As the competitive pressures
among businesses are intense, even a slight reduction in costs and
price could help firms exert an increasing presence in the
marketplace. Hence, before making final pricing decisions, corpo-
rations have to identify the activities which add high value with low
expense, and the activities which are costlier but less value-adding.
This complicated process requires the techniques of the ABC
method rather than traditional costing because the ABC method is
more useful in respect of precise price calculation. Precise price
calculation allows firms to gain more competitiveness in terms of
pricing strategy. Recognizing the importance of price competition
strategy, Chen et al. (2019) look into the price competition of pri-
vate service providers in an economic system that has public vs.
private service providers. Almeida and Cunha (2017) claimed that
today's business environment is characterized by severe global
competition, not only in terms of price but also in quality. This
could be because buyers prefer to share if information asymmetry
about quality is high (Alibeiki & Gümüş, 2020). As such, the
following hypothesis is proposed:
H3. Companies under high pressure of competition are more
likely to apply the ABC system.
2.2.4. Importance of cost information
According to Brierley (2015), Cooper and Kaplan (1988), and
Cooper (1988), the corporate's decision of whether to apply the ABC
method is influenced by the importance of cost information and
automation level. The need for accurate cost data for strategic de-
cisions and cost reduction may affect the adoption of ABC. Al-Omiri
and Drury (2007) suggest the factors affecting the usefulness of cost
information include the firm's use of cost data in pricing decisions,
cost reduction efforts, and the need for special cost studies. Cost
accounting information systems such as ABC have been designed to
provide information useful for the management of the company,
that is to assist them in the exercise of functions of planning,
control, and decision making where management needs accurate,
fast and reliable cost information. In a market mechanism, cost
information is needed to perform the following tasks: design
products and services that meet the expectations of customers;
U. Tu Tran and H. Thi Tran
give a signal for quality, efficiency, and speed improvement; con-
siderations for product decisions, negotiating on price, product
characteristics, quality, distribution, and customer service; devel-
oping effective and efficient service and distribution processes for
target markets and customers. When cost information becomes
more important, there is more demand for a costing method that
calculates the costs more precisely than traditional methods. This
assumption supports the firms' application of ABC because of the
importance of cost information. To test if this assumption works in
the context of a government-led rather than market-led industry in
a transitional country, the following hypothesis has been
developed:
H4. Companies that recognize the importance of cost information
are likely to apply the ABC system.
The above four hypotheses will be tested in the context of the
pharmaceutical industry in Vietnam, a transitional country with
the market regulated by the state. Most of the pharmaceutical
companies in the country are state-owned. As of Dec 2017, 93.3% of
the pharmaceutical companies in Vietnam are state-owned enter-
prises that made 98.6% of total sales of the industry3.
3. Research methods
3.1. Data collection
3.1.1. Survey and questionnaire
A questionnaire related to the hypothesized factors was devel-
oped. After receiving management accounting expert advice on the
content of the questionnaire, the revised questionnaire has 30
questions.
In the final survey instrument, the survey questions are divided
into three main groups. Questions 1 to 11 are included in the first
group to find general information about the companies, such as the
business sector, the number of employees, the number of products,
the production process, the cost structure, the competitive strategy
of pharmaceutical enterprises, and the importance of cost infor-
mation. The importance level is measured with a Likert scale.
The second group (questions 12 to 27) is designed to investigate
the cost accounting at the firms that do not apply the ABC method,
and the constraints that impede the application of ABC in these
firms.
The third group (questions 28 to 30) investigates the firms
applying ABC on the level of success, the difficulties of applying
ABC, the coordination needed among departments in a company
for applying the ABC method.
The main survey was conducted between October 2017 and
December 2017 using the final survey instrument. In this survey,
the questionnaire was sent through letters to the chief accountants
of a group of 187 pharmaceutical companies in Vietnam. These
companies’ addresses were provided by the Vietnamese Pharma-
ceutical Company Association.
The number of responses received was 71 out of 187 local
pharmaceutical firms, accounting for a 41% response rate. Of the 71
responses in the sample, there were 15 unsuitable or incomplete
questionnaires. After omitting the invalid questionnaires, the final
dataset consisted of 56 companies.
3.1.2. Dataset
Among the 56 firms left in the final dataset, in Oct 2017, 12 were
applying the ABC method, 11 were pilot applications and only one,
Ha Tay Pharmaceutical Joint Stock Company, applied the ABC
method in some aspects only. 17 companies are listed on the stock
exchange in Vietnam (13 are manufacturing firms and 4 are trading
firms). 47 out of the 56 firms are shareholding companies that have
306
Asia Pacific Management Review 27 (2022) 303e311
more than 51% of the capital owned by the government. Three of
the 56 firms are shareholding companies with less than 50% of the
capital owned by the government. Only 6 firms are 100% private
capital.
3.2. Model
Grounded in the previous studies (Ahmadzadeh et al., 2011), a
model of five independent variables including indirect cost pro-
portion of the total cost, product diversification, competition
capability, the importance of cost information, and size were
employed to explain the probability of a firm applying the ABC
method.
To investigate the relationship between the independent vari-
ables and the dependent variable, i.e., the probability of a firm
applying the ABC method, binary logistic regression was applied for
estimation (Spicer, 2004).
Ln ½Prob ðY ¼ 1Þ = ð1  Prob ðY ¼ 1Þ ¼ b0
þb1COSTSTRUCTURE þ b2DIVERSITY þ b3COMPETION
þb4SIZE þ b5INFORMATION þ ε
In which
ABCAPPLICATION: Dependent variable, being assigned the value
of 1 for the firm that applies ABC and 0 for the firms that do not
apply ABC.
The explanatory variables:
COSTSTRUCTURE: Cost structure was expressed as a percentage
of general operation cost over total costs. For production enter-
prises, it is the general operation cost over the cost of goods sold.
For commercial enterprises, it is the total cost of sales and man-
agement over the total cost including the cost of goods sold. As the
indirect expense rate of companies in our sample oscillates from
10% to 35%, COSTSTRUCTURE was classified into three levels: The
low rate (10%e20%), the medium rate (21%e30%), and the high rate
(31%e35%). The scale was adopted from Bjørnenak (1997).
DIVERSITY: Diversity of products was divided into three groups
The measurement was adopted from Almeida and Cunha (2017) the
less diversity group in which each firm has 10e50 products, the
diversity group in which each firm has 51e149 products, and the
more diverse group in which each firm has more than 150 products.
COMPETITION: Competition of enterprises was evaluated con-
cerning the marketing strategy of the pharmaceutical companies in
this study. The measurement was adopted from Chen et al. (2019).
For measurement of COMPETITION, either quality or price compe-
tition (COMPETITIONPRICE or COMPETITIONQUALITY) was alterna-
tively used in the regression. The less important level was encoded
as 1, the important level encoded as 2, very important level enco-
ded as 3.
INFORMATION: the importance level of cost information for
businesses. This study used the measurement method as adopted
from Brierley (2015). The businesses with the less important level
of cost information were encoded as 1; the importance level
encoded as 2; the high importance level as 3.
Control variable:
SIZE: Al-Omiri and Drury (2007) state that size was an important
factor influencing the adoption of more complex administration
systems and noted a positive relationship between company size
and the adoption of ABC systems. A possible reason for this is that
larger organizations have relatively greater access to resources to
experiment with the introduction of more sophisticated accounting
systems. Therefore, firm size is controlled in the model.
Company size was measured by the number of employees
divided into 3 levels. Following this, we designated a small-size
U. Tu Tran and H. Thi Tran Asia Pacific Management Review 27 (2022) 303e311

firm as having fewer than 200 employees. A medium-size firm has

COMPETITION was classified into three levels: The less important level was encoded as 1, the important level encoded as 2, very important level encoded as 3 (Brierley, 2015). COMPETITION includes COMPETITIONPRICE and

INFORMATION was classified into three levels adopted from Brierley (2015): The businesses with the less important level of cost information were encoded as 1; the importance level encoded as 2; the high importance level as 3.
DIVERSITY was classified into three levels: Following Almeida and Cunha (2017), the less diversity group in which each firm has 10e50 products, the diversity group in which each firm has 51e149 products, and the more diverse
200e500 employees and a large-size firm has over 500

important

100.00%
84.62%

35.29%
employees.

Important Very

11

13
2

100.00%
74.29%

25.71%
3.3. Estimation method

26

35
INFORMATION

9
Firstly, the multicollinearity problem was checked by exam-

diversified important

100.00%
87.00%

12.50%
ining the correlation coefficients of each pair of the predictors and

Less
their Variance Inflation Factor (VIF). All of the VIFs are smaller

8
than 4, which is much smaller than the thread hold of 10, sug-
gesting that multicollinearity is not a problem with our dataset

100.00%
61.11%

38.89%

COSTSTRUCTURE was classified into three levels: The low rate (10%e20%), the medium rate (21%e30%), and the high rate (31%e35%). The scale was adopted from Bjornenak (1997).
(Mansfield & Helms, 1982).

Diversified Very

11

18
Secondly, the potential endogeneity of the key predictors,

7
COSTSTRUCTURE, DIVERSITY, COMPETITION, INFORMATION was

100.00%
86.96%

13.04%
alternatively examined. A variable is endogenous when it is
correlated with the error term of a model (Wooldridge, 2013).

20

23
3
Thus, an investigation to see if COSTSTRUCTURE [DIVERSITY]

important diversified
DIVERSITY
[COMPETITION] [INFORMATION] is endogenous with the error term

100.00%
86.67%

13.33%
was conducted. The residual was drawn from the pooled OLS

Less

13

15
estimation using ABCAPPLICATION as the dependent variable.

2
Then, the correlation between COSTSTRUCTURE [DIVERSITY]

100.00%
[COMPETITION] [INFORMATION] and the residual was examined

Important Very

0.68

0.32
using the OLS estimation. The results show no significant corre-

17

25
8
lation between COSTSRUCTURE [DIVERSITY] [COMPETITION] [IN-

COMPETITIONQUALITY

100.00%
FORMATION] and the residual (p > 0.05).
Thirdly, the Pearson correlation test was conducted.

0.9

0.1
18

20
2
Fourthly, the logistic regressions were run for baseline models

important important
(Model 1 and Model 2).

100.00%
0.8182
Finally, the OLS regressions were run with the same specifi-

0.111
Less

11
cations for robustness check (Model 3 and Model 4).

100.00%
0.6667

0.3333
Important Very

14

21
4. Results 7

100.00%
COMPETITIONPRICE

0.8519

0.1481

4.1. Descriptive statistics

23

27
4

Out of 56 companies in the dataset, 23 are of small size (less

important

100.00%

than 200 employees), 21 medium size (200e500 employees), and

0.875

0.125

12 large size (over 500 employees). 66.67% of the large firms have
Less

applied ABC while only 4.35% of the small companies apply ABC.
14.29% of the medium companies have been applying ABC.
A visual inspection of the correlation coefficients would indi-
indirect costs
High rate of

cate concerns for multicollinearity. Therefore, we used the test for

100.00%

VIF to measure how much the variance of the coefficients is

50.00%

50.00%

inflated by multicollinearity. The VIF for SIZE is 3.84, COSTSTRUC-

10
5

TURE 1.63, COMPETITIONQUALITY 2.29, COMPETITIONPRICE 1.66,

DIVERSITY 3.08, INFORMATION 2.08 respectively, the mean VIF
group in which each firm has more than 150 products.

2.43, which are generally well below the rule-of-thumb value of 4.

Medium rate of
indirect costs

This demonstrates that the assumption of no perfect multi-

collinearity is not seriously violated.
100.00%
78.26%

21.74%

The survey result is displayed in Table 1 and visualized in Fig. 1.

18

23

We have the initial evaluations of the trend in the application of

5

the ABC method of the companies in our sample. Possibly, the

COSTSTRUCTURE

higher the general production expense rate is, the higher the ABC
indirect costs
Low rate of

application probability is. The firms having multiple products tend

100.00%

to use ABC more than the others. The firms considering price
91.30%

8.70%

competition very important tend to apply ABC much more than

COMPETITIONQUALITY.
21

23
2

companies for which price competition is less important. The

applied ABC
Cross tabulation.

enterprises considering quality competition as more important

Have applied
companies

tend to apply ABC more than enterprises that consider quality

Have not
Group of

competition less important. The initial impression is that when

ABC
Table 1

Total

the importance of cost information increased, the proportion of

Note.

enterprises applying ABC probably increased.

307
U. Tu Tran and H. Thi Tran Asia Pacific Management Review 27 (2022) 303e311

Fig. 1. Number of companies applying ABC vs. not applying ABC comparison.

4.2. Inferential statistics the decision-making process of the companies in respect of

adopting the ABC method (b ¼ 0.129; p ¼ 0.061 in Model
The study conducts binary logistic regressions for baseline 1; ¼ 2.224; p ¼ 0,020 in Model 2). Thus H1 is supported. Product
models (Model 1 and Model 2) and OLS estimation for checking the diversification (DIVERSITY) also has a significant and positive
robustness of the results (Model 3 and Model 4). The magnitude of impact on the decision-making process for adoption of ABC method
the Pseudo R2 for logistic regressions and the R2 for OLS regressions in these firms (b ¼ 0,010; p ¼ 0,003 in Model 1; b ¼ 3.610; p ¼ 0.098
demonstrates that the models fit the data well. Table 2 shows the in Model 2). Thus, H2 is confirmed.
regression results based on price competition (Model 1 and Model Quality and price are significant factors in marketing. Therefore,
3) and quality competition (Model 2 and Model 4). this study focuses on analyzing how price competition and quality
As can be seen, in the baseline results, the indirect cost pro- competition affect the probability of the application of ABC. For
portion (COSTSTRUCTURE) has significant and positive impacts on competition, quality competition strategy (COMPETITIONQUALITY)
is likely to influence the decision of application of the ABC method
Table 2 (while b ¼ 1.605; p ¼ 0.863 in Model 1, b ¼ 3.131; p ¼ 0.056 in
Regression results. Model 2); the same trend seen in the use of price competition
Variable Baseline models Models for strategy (COMPETITIONPRICE). These results confirm H3.
Robustness check However, there is no significant evidence of the link between
Model 1 Model 2 Model 3 Model 4 cost information and the application of ABC in the studied com-
panies. Consequently, H4 is not accepted.
Logit Logit OLS OLS
The Cox and Snell Pseudo R2 is 0.729 and 0.815 in Model 1 and
COSTSTRUCTURE 0.129a 2.224b 0.188c 0.190c
Model 2 respectively. Thus we can interpret this as approximately
(0.061) (0.020) (0.000) (0.001)
DIVERSITY 0.010c 3.610a 0.245b 0.287b 73%e82% probability of the event of ABC application is explained by
(0.003) (0.098) (0.028) (0.026) the logistic model (Cox & Snell, 1989).
COMPETITIONQUALITY 3.131a 0.145c
(0.056) (0.004)
COMPETITIONPRICE 1.605 0.140c 5. Discussion
(0.863) (0.010)
INFORMATION 0.671 2.058 (0.197) (0.652)
(0.611) (0.227) The survey data, descriptive and inferential statistics of this
study result in the four important points of discussion. First, the
SIZE 0.003b 2.245 0.014 0.064 level of ABC application in the pharmaceutical enterprises in
(0.002) (0.143) (0.864) (0.465) Vietnamese pharmaceutical companies in the survey, that is, the
_cons 11.624a 32.692 1.963c 1.723c
(6.891) (0.027) (0.000) (0.000)
rate of ABC application: 12 out of 56 firms in the year 2017 or 21.4%
N 56 56 56 56 of the observations, is low. Among the companies that applied ABC
Cox and Snell Pseudo R2 0.729 0.815 to calculate products’ price, two-thirds were testing this method,
R2 0.755 0.762 only one-third applied it methodically. This rate is much lower than
Note: p-values in parentheses. in other countries. Survey data from the 1990s to 2005 of Cohen
Model 1 and Model 2 are the baseline results of Logit regressions. et al. (2005) indicates an increase in ABC adoption in developed
Model 1 and Model 3 use price competition as the independent variable; Model 2 countries. Accordingly, the scope of ABC applications in US com-
and Model 4 uses quality competition as the independent variable.
a
p < 0.1.
panies increased significantly in just eight years, from 1995 to 2003,
b
p < 0.05. rising from 25% to 52%. For companies in the UK, this ratio increased
c
p < 0.01. from 6% in 1991 to 23% in 2001. In Ireland, the rate of adoption of
308
U. Tu Tran and H. Thi Tran
ABC increased from 12% in 1999 to 27.9% in 2004, while the per-
centage of manufacturing firms in a survey in Australia has risen
sharply from 12% in 1997 to 56% in 1998. The survey from 2000 to
2005 shows that the rate of ABC adoption in Greece increased from
12.7% to 40.9%.
Second, the companies have applied the method of calculating
the ABC price for each product based on the data collected monthly.
Meanwhile, if companies fully utilized the ABC method, they could
calculate the price of each production batch. Although it is more
complex and time-consuming to collect information and input
data, the information collected is accurate, complete, and timely,
which shows a more detailed picture of business cost management.
Third, the businesses in the study have not maximized the
benefits of the ABC method. In the literature, the real benefits that
businesses gained when applying the ABC are enormous. The
previous studies indicate that the ABC approach is an effective way
to estimate the costs of production while considering environ-
mental issues (Tsai et al., 2019) and that it can calculate costs more
accurately than traditional costing methods (Cooper, 1988; Kim &
Kim, 2011; Mortaji et al., 2013; Rundora et al., 2013). Extensive
use of ABC for cost analysis, cost strategy, and cost evaluation
directly improves operational performance and financial perfor-
mance through improving operational performance (Vetchagool
et al., 2020). However, when applying ABC, the companies in the
survey only used it for a few purposes, mostly fixing a price on
products, estimating budget, and cutting down costs. The cost in-
formation which is needed for the ABC application could be used
for other managerial purposes such as building a system of
assessing and rewarding, making decisions on investing, restruc-
turing, coming up with ideas about quality. Unfortunately, the cost
information did not seem to be used at its best by the studied firms.
Pharmaceutical firms can use the ABC method to assess activ-
ities based on costs. This assessment allows to eliminate/reduce the
number of activities that bring little value, maximizing the number
of activities that bring much value, assisting employees in focusing
on the value of their work. Therefore, companies can benefit from
ABC and take the opportunities that it brings, which include cutting
down costs and improving the effectiveness of the business pro-
cess, having employees understand how their work is satisfying the
customers and know which activities are unnecessary, increasing
focus and cost control so that firms can identify which activities
need high or low cost and which costs can be controlled or reduced.
The ABC system will develop its potentials when firms fully un-
derstand how to utilize the cost information supplied by the system
for their managerial activities.
Fourth, regarding the hypotheses testing results, the first hy-
pothesis that companies with a higher indirect cost ratio are more
likely to apply the ABC system is accepted. This conclusion co-
incides with the conclusions of Ahmadzadeh et al. (2011), Booth &
Giacobbe (1997), and Clarke (1992) who show that firms with a
small percentage of total indirect costs are less interested in ABC
method use. H2 that production companies that have more product
diversification have a greater tendency to apply the ABC system is
supported. This conclusion matches that of and Bjornenak (1997).
The study accepts H3 that companies under high pressure of
competition are more likely to apply the ABC system. This accep-
tance is in alignment with Van Nguyen and Brooks (1997). How-
ever, the empirical result does not support H4 that companies that
recognize the importance of cost information are likely to apply the
ABC system. This means the importance of cost information is not
statistically related to the application of ABC for the studied firms.
This empirical result is inconsistent with Cooper (1988) and Al-
Omiri and Drury (2007).
We discuss in depth the result of testing H4. There is no sig-
nificant evidence of the link between cost information importance
309
Asia Pacific Management Review 27 (2022) 303e311
and the application of ABC in the studied companies. This indicates
important points of discussion. Perhaps it is because the study
sample includes pharmaceutical companies in an emerging country
that is transitioning from state subsidy to a market mechanism. In
Vietnamese pharmaceutical companies, state ownership was
dominant. Pharmaceutical enterprises were inherently dependent
on state resources, production, and distribution according to gov-
ernment plans. The pharmaceutical market in Vietnam is state-
driven, with the government controlling prices, so cost informa-
tion becomes not the most important to help determine the market
price of pharmaceuticals. Before 2017, cost management in the
pharmaceutical companies depended heavily on the external re-
sources provided by the Vietnamese government. As a conse-
quence, the firms were not required to compute accurate cost
information to the extent that the indirect costs could be allocated
to each product, although this computation would have allowed the
enterprises to decide the production cost of each unit of the
finished product to increase their competitiveness in the market.
Even if the pharmaceutical companies in Vietnam attached
importance to cost information for more effective management, the
ABC accounting method, with its strength in allocating indirect
costs to each product, would not always help many companies.
Vietnamese pharmaceutical company's leaders were not always
ready to replace the traditional accounting method to change to the
new accounting method, not to mention that the ABC method has
the disadvantage of consuming a lot of time and cost. The cost of
tracking activities would be higher due to the need for more ac-
countants who should be qualified in the ABC application. The
majority of Vietnamese pharmaceutical companies were small and
medium enterprises, so they were unable to do so easily. Moreover,
the ABC method required the cooperation of many departments in
a company, the support of the business leaders as well as the em-
ployees. In some cases, it is difficult to find the source of the costs
(i.e., the specific activities that the actual cost incurred). Further-
more, this method is not mandatory for Vietnamese firms because
financial statements have not been required to apply the ABC ac-
counting method.
Our research results support the RBV theory (Wernerfelt, 1984,
1995) in a unique way. Due to the large dependence on state re-
sources, the competitive decisions of Vietnamese pharmaceutical
companies were dominated by the main resource supplier, i.e., the
Vietnamese government. In the long run, when transforming to
privatization, resources to help businesses compete must come
from internal resources of the company, must be rare, irreplaceable,
and impossible to imitate, as suggested in the RBV theory. Things
should change after the application of Resolution Number 10 that
recognizes the important momentum of the private sector, levelling
the playing ground for competition between the government vs.
private sector in the pharmaceutical industry in Vietnam. When the
government promulgates policies for businesses to become finan-
cially independent, i.e., reducing the dependence of pharmaceutical
enterprises on government resources, the enterprises have to find a
way to build resources from the internal environment. The phar-
maceutical companies must find solutions to manage their internal
resources better by estimating costs precisely. As a result, the
companies will automatically consider switching to applying an
accounting method such as ABC to help manage costs better.
6. Conclusion
This study investigates the factors in applying the ABC method
in firms in a transitional country, looking into a single case of a
specific industry in Vietnam, pharmaceutical firms. The Vietnam
pharmaceutical industry is typical of a state-orientation market
economy. The majority of enterprises in this industry are state-
U. Tu Tran and H. Thi Tran
owned, and the industry is significantly controlled by the
government.
The paper contributes an interesting research context of tran-
sitional countries to the literature. From the RBV lens (Wernerfelt,
1984, 1995), this study finds the three significant factors influ-
encing the application of the ABC system in the sampled pharma-
ceutical companies: enterprise cost structure, competition strategy
in price and quantity, and diversification of products. Our empirical
results support the RBV perspective in transitional economies
through the use of a unique dataset. For this, our paper pushes
forward the application of the RBV theory in light of answering how
resources and capabilities affect company behavior and outcomes
in a transitional economy regulated by the state. Thus, the contri-
bution of this study is significant as the study looks into a
government-led industry in a transitional economy that follows the
ideology of a market mechanism and socialism as the context for
research. This study is of further importance given the COVID-19
pandemic, which is a test for the role of government in market
intervention with the goal of protecting public health.
To offer solutions to local enterprises in transitional countries
for better cost management to enhance business efficiency, the
paper offers managerial implications and policy recommendations
for utilizing the ABC method more effectively:
Firstly, firms should fully exploit the benefits of the ABC method
and combine ABC with activities-based management. The appli-
cation of ABC has so far only reached the stage of supplying infor-
mation about price and cost control. However, other functions such
as supporting activities like improving the TQM, the JIT control
system, improving processes and product quality have not yet been
applied. Companies need to use the information provided by the
ABC method to control the general operating cost distribution and
analyze profits to make timely decisions. On the other hand, firms
need to be able to assess the productivity and performance of each
production unit to analyze the information more thoroughly, add-
ing value to the act of making decisions. To do this, first and fore-
most, companies must identify which activities create more
benefits and which create less. They can apply the ABC method to
pinpoint and eliminate activities that cost money but produce zero
value for the products.
Secondly, firms should build a reliable managerial accounting
system. Cost management accounting is not given enough credit by
pharmaceutical firms. To apply the ABC method effectively, com-
panies need to set up a reliable managerial accounting system,
which will be run alongside the financial accounting system.
Last but not least, firms should form a group of experts respon-
sible for using the ABC method. Since planning and applying ABC
successfully is quite complicated, there should be a group of experts
responsible for the ABC method. This group should include at least
the following members: a leader, a cost accountant, a production
supervisor and a technical engineer.
This study offers recommendations to the Vietnam Pharma-
ceutical Companies Association. ABC is not a common method in
Vietnam while sources of in-depth knowledge, such as books and
seminars on ABC, are scarce. Moreover, the lack of support from
senior executives and the lack of consensus among company de-
partments are partially due to insufficient understanding of the
practical benefits of ABC. Therefore, the industry association should
disseminate information on the application of the ABC method to
their members. Once the application of the ABC method in the
pharmaceutical company members helps improve business per-
formance, the government has more resources to pursue the goal of
public health protection.
The limitations of this study are the small number of observa-
tions and the cross-sectional dataset. The data collection faced
challenges because the companies in the survey did not understand
310
Asia Pacific Management Review 27 (2022) 303e311
much about the ABC accounting system. Some companies respon-
ded that they applied the ABC system but when the authors came to
the site for an in-depth study, the accounting system was still the
traditional costing method. Furthermore, cost information was
confidential, so accessing data sources was difficult. These limita-
tions will become the directions for future research. In addition,
hypothesis H2 could be segregated into two hypotheses, one
addressing large production and the other addressing product va-
riety. Future research could test these two hypotheses separately.
Funding
The author(s) received no financial support for the research,
authorship and/or writing up this paper.
Declaration of competing interest
Dr Uyen To TRAN declares that she has no conflict of interest.
Dr Hien Thi TRAN declares that she has no conflict of interest.
Acknowledgement
We would like to express gratitude to Associate Professor Dao
Thi Thu Giang, Professor Venancio Tauringana, and the anonymous
reviewers for their helpful comments.
References
Ahmadzadeh, T., Etemadi, H., & Pifeh, A. (2011). Exploration of factors influencing
on choice the activity-based costing system in Iranian organizations. Interna-
tional Journal of Business Administration, 2(1), 61e70.
Al-Omiri, M., & Drury, C. (2007). A survey of factors influencing the choice of
product costing systems in UK organizations. Management Accounting Research,
18(4), 399e424.
Alibeiki, H., & Gümüş, M. (2020). Supply competition under quality scores: Moti-
vations, information sharing and credibility. International Journal of Production
Economics, 226, Article 107612.
Almeida, A., & Cunha, J. (2017). The implementation of an Activity-Based Costing
(ABC) system in a manufacturing company. Procedia Manufacturing, 13,
932e939.
Amit, R., & Schoemaker, P. J. (1993). Strategic assets and organizational rent. Stra-
tegic Management Journal, 14(1), 33e46.
Anderson, S. W. (1995). A framework for assessing cost management system changes:
The case of activity based costing implementation at general motors, 1986-1993.
Working paper. University of Michigan.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of
Management, 17(1), 99e120.
Bjørnenak, T. (1997). Diffusion and accounting: The case of ABC in Norway. Man-
agement Accounting Research, 8(1), 3e17.
Booth, P., and Giacobbe, F., (1997). Activity-Based Costing in Australian Manufacturing
firms: Key Survey Findings, Management Accounting Issues Report by the
Management Accounting Centre of Excellence of ASCPA, No.5, March, pp.1-6.
Brewer, P. C., Garrisom, R. H., & Noreen, E. W. (2017). Introduction to managerial
accounting (6th ed.). US: Mc Graw Hill.
Brierley, J. A. (2015). An examination of the factors influencing the inclusion of non-
manufacturing overhead costs in product costs. International Journal of Mana-
gerial and Financial Accounting, 7(2), 134e150.
Chen, W., Zhang, Z. G., & Hua, Z. (2019). Analysis of price competition in two-tier
service systems. Journal of the Operational Research Society, 70(11), 1938e1950.
Clarke, P. (1992). Management accounting practices and techniques in Irish
manufacturing firms. Journal of Irish business and administrative research, 8(4),
22e24.
Cohen, S., Venieris, G., & Kaimenaki, E. (2005). ABC: Adopters, supporters, deniers
and unawares. Managerial Auditing Journal, 20(9), 981e1000.
Cooper, R. (1988). The rise of activity-based-costing-Part One: What is an activity-
based cost system. Journal of Cost Management, 2(1), 45e54.
Cooper, R., & Kaplan, R. S. (1988). Measure costs right: Make the right decisions.
Harvard Business Review, 66(5), 96e103.
Cotton, W. D., Jackman, S. M., & Brown, R. A. (2003). Note on a New Zealand
replication of the Innes et al. UK activity-based costing survey. Management
Accounting Research, 14(1), 67e72.
Cox, D. R., & Snell, E. J. (1989). The analysis of binary data (2nd ed.). London:
Chapman and Hall.
Dierickx, I., & Cool, K. (1989). Asset stock accumulation and sustainability of
competitive advantage. Management Science, 35(12), 1504e1511.
Duran, O., & Afonso, P. S. L. P. (2019). An activity based costing decision model for
U. Tu Tran and H. Thi Tran
life cycle economic assessment in spare parts logistic management. Interna-
tional Journal of Production Economics, 222, Article 107499.
Fang, Y., & Ng, S. T. (2011). Applying activity-based costing approach for construc-
tion logistics cost analysis. Construction Innovation, 11(3), 259e281.
Johnson, H. T., & Kaplan, R. S. (1987). The rise and fall of management accounting.
Management Accounting. 7. USA: The Free Press.
Kaiser, M. J. (2019). The role of factor and activity-based models in offshore oper-
ating cost estimation. Journal of Petroleum Science and Engineering, 174,
1062e1092.
Kim, Y. W., Han, S., Shin, S., & Choi, K. (2011). A case study of activity-based costing
in allocating rebar fabrication costs to projects. Construction Management &
Economics, 29(5), 449e461.
Kim, Y. W., & Kim, S. C. (2011). Cost analysis of information technology-assisted
quality inspection using activity-based costing. Construction Management &
Economics, 29(2), 163e172.
Lou, Y.-I., & Wang, H. C. (1998). Design and implementation of activity-based costing
in a communication company. Advances in Accounting, Auditing and Risk Man-
agement, 28e33.
Lou, Y.-I., & Wang, H. C. (2013). Design and implementation of activity e based
costing in a communication company. International Journal of Business and
Management, 5(8), 28e33.
Maelah, R., & Ibrahim, D. N. (2007). Factors influencing activity based costing (ABC)
adoption in manufacturing industry. Investment Management and Financial In-
novations, 4(2), 113e124.
Mansfield, E. R., & Helms, B. P. (1982). Detecting multicollinearity. The American
Statistician, 36(3a), 158e160.
Mishra, B., & Vaysman, I. (2001). Cost-system choice and incentives e traditional vs
Activity-based costing. Journal of Accounting Research, 39(3), 619e641.
Mortaji, S. T. H., Bagherpour, M., & Mazdeh, M. M. (2013). Fuzzy time-driven ac-
tivity-based costing. Engineering Management Journal, 25(3), 63e73.
Peteraf, M. A. (1993). The cornerstones of competitive advantage: A resource-based
view. Strategic Management Journal, 14(3), 179e191.
Prahalad, C. K., & Hamel, G. (2006). The core competence of the corporation. Strat-
egische unternehmungsplanungdstrategische unternehmungsführung. Germany:
Springer.
Priem, R. L., & Butler, J. E. (2001). Is the resource-based “view” a useful perspective
for strategic management research? Academy of Management Review, 26(1),
22e40.
Roztocki, N., & Schultz, S. M. (2003). Adoption and implementation of activity-based
costing: A web-based survey. In , 72. IIE Annual Conference. Proceedings, 2003.
Institute of industrial and systems engineers (IISE),USA (pp. 1232e1235).
Rundora, R., Ziemerink, T., & Oberholzer, M. (2013). Activity-based costing in small
manufacturing firms: South African study. Journal of Applied Business Research,
29(2), 485e498.
Salawu, R. O., & Ayoola, T. J. (2012). Activity based costing adoption among
manufacturing companies in Nigeria. Journal of Modern Accounting and Auditing,
8(1), 40e45.
Spicer, J. (2004). Logistic regression and discriminant analysis. Making Sense of
Multivariate Data Analysis: SAGE Publications.
311
Asia Pacific Management Review 27 (2022) 303e311
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic
management. Strategic Management Journal, 18(7), 509e533.
Tsai, W.-H., Chu, P.-Y., & Lee, H.-L. (2019). Green activity-based costing production
planning and scenario analysis for the aluminum-alloy wheel industry under
industry 4.0. Sustainability, 11(3), 756.
Tsai, W.-H., & Jhong, S.-Y. (2019). Production decision model with carbon tax for the
knitted footwear industry under activity-based costing. Journal of Cleaner Pro-
duction, 207, 1150e1162.
Tsai, W.-H., Lan, S.-H., & Huang, C.-T. (2019). Activity-based standard costing
product-mix decision in the future digital Era: Green recycling steel-scrap
material for steel industry. Sustainability, 11(3), 899.
Tsai, W.-H., Lee, K.-C., Liu, J.-Y., Lin, H.-L., Chou, Y.-W., & Lin, S.-J. (2012). A mixed
activity-based costing decision model for green airline fleet planning under the
constraints of the European Union Emissions Trading Scheme. Energy, 39(1),
218e226.
Tsai, W.-H., Yang, C.-H., Chang, J.-C., & Lee, H.-L. (2014). An activity-based costing
decision model for life cycle assessment in green building projects. European
Journal of Operational Research, 238(2), 607e619.
Van Nguyen, H., & Brooks, A. (1997). An empirical investigation of adoption issues
relating to activity-based costing. Asian Review of Accounting, 5(1), 1e18.
Vetchagool, W., Augustyn, M. M., & Tayles, M. (2020). Impacts of activity-based
costing on organizational performance: Evidence from Thailand. Asian Review
of Accounting, 28(3), 329e349.
Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management
Journal, 5(2), 171e180.
Wernerfelt, B. (1995). The resource-based view of the firm: Ten years after. Strategic
Management Journal, 16(3), 171e174.
Wooldridge, J. M. (2013). Introductory Econometrics: A Mordern Approach (5th ed.).
Mason, OH: South-Western/ Cengage Learning.
Dr. Uyen To Tran is a lecturer at Foreign Trade University, major in Accounting and
Finance. She obtained her PhD in managerial accounting at Foreign Trade University in
2017. Her research interest and publications are in the area of financial accounting,
managerial accounting, corporate finance, corporate governance.
Dr. Hien Thi Tran is a lecturer and researcher (assistant professor) at Vietnam National
University Hanoi, VNU University of Economics and Business. She has a PhD in Man-
agement at Southampton University Business School, UK . She has published in in-
ternational peer-reviewed journals such as Journal of Business Research (ABS3, SSCI),
Multinational Business Review (ABS2, SSCI), and Corporate Governance: The International
Journal of Business and Society (ABS2, ESCI). Dr Tran is the lead editor of a Palgrave Mac-
Millan book . She is an ad-hoc reviewer for several ABS journals. Her research interests
are in the areas of strategic management, international business and management,
corporate governance and corporate social responsibility, human resources, and busi-
ness culture.