(Luận văn) mediating effect of strategic management accounting practices in the relationship between intellectual capital and corporate performance evidence from vietnam

MINISTRY OF EDUCATION AND TRAINING
UNIVERSITY OF ECONOMICS, HO CHI MINH CITY

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TRINH HIEP THIEN

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Mediating effect of strategic

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management accounting practices in
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the relationship between intellectual
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capital and corporate performance
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Evidence from Vietnam

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Doctor of Philosophy in Accounting

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A dissertation submitted for the Degree of

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May 2019


MEDIATING EFFECT OF STRATEGIC MANAGEMENT

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ACCOUNTING PRACTICES IN THE RELATIONSHIP BETWEEN

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INTELLECTUAL CAPITAL AND CORPORATE PERFORMANCE

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EVIDENCE FROM VIETNAM

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Trinh Hiep Thien

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MPAcc (University of Sydney), MBA (UEH), BBus (UEH), ACMA, CGMA

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A dissertation submitted for the Degree of

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Doctor of Philosophy in Accounting

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Code: 9.34.03.01

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Dr. Le Dinh Truc

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Dr. Doan Ngoc Que

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Academic Supervisors:

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University of Economics, Ho Chi Minh City
May 2019

MINISTRY OF EDUCATION AND TRAINING
UNIVERSITY OF ECONOMICS, HO CHI MINH CITY

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Submitted to School of UEH Graduate

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Mediating effect of strategic management accounting practices
in the relationship between intellectual capital and corporate
performance – Evidence from Vietnam

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Title of dissertation:

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Trinh Hiep Thien

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Author:

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Academic Supervisor: Dr. Doan Ngoc Que

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Dr. Le Dinh Truc

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Date of Final Defense:

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Read and Approved by

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Jury Composition

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Final Defense Committee:

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First discussant

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Third discussant

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Second discussant

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Member 1

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Member 2

Secretary

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Date

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Date

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Dean of the School of Accounting

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Dean of the School of UEH Graduate

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Accepted by the School and the University in partially fulfillment of the requirements for
the degree of Doctor of Philosophy in Accounting.

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Defense Committee Chairperson


STATEMENT OF AUTHENTICATION
The work described in this dissertation is original based on raw data collected by me,

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except where due acknowledgement is made in the text.

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I hereby declare that this material has not previously submitted, either in full or in

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part, for a degree at this or any other institution.

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Ho Chi Minh City, May 31st, 2019

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TRINH HIEP THIEN

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TABLE OF CONTENTS
Page

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LIST OF TABLES ............................................................................................................. I

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LIST OF FIGURES ......................................................................................................... II

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LIST OF ABBREVIATIONS ........................................................................................ III

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ABSTRACT ..................................................................................................................... IV

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

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1. Background...................................................................................................................1

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2. Research questions and research objectives .................................................................3

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3. Research object and research scope .............................................................................4

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4. Methodology.................................................................................................................5

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5. Outline of the dissertation ............................................................................................5

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

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1.1. Review of international studies of intellectual capital ..............................................7

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1.1.1. Stages in developing intellectual capital as a research field ...............................8

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1.1.2. Research trends on intellectual capital in the accounting discipline ................10

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1.1.3. Research methods used to study intellectual capital .........................................14

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1.1.4. Review of studies investigating the relationship between intellectual capital

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and corporate performance..........................................................................................16

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1.2. Review of international studies of strategic management accounting ....................18

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1.2.1. Research on conceptualizing strategic management accounting ......................18

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1.2.2. Research on strategic management accounting techniques ..............................20

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1.2.3. Research on the relationship between environment, strategy choice and

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strategic management accounting practices ................................................................22

accounting practices and corporate performance ........................................................24
1.3. Review of studies of intellectual capital and strategic management accounting in
Vietnam ..........................................................................................................................25

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1.2.5. Review of studies investigating the relationship between strategic management

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1.2.4. Research on strategic management accounting process ...................................22


1.3.1. Vietnamese context ...........................................................................................25
1.3.2. Research on intellectual capital in Vietnam......................................................27
1.3.3. Research on strategic management accounting in Vietnam .............................28

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1.4. Research gaps ..........................................................................................................30

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1.4.1. Lack of studies concerning performance implication of intellectual capital in

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association with the mediating role of SMA practices ...............................................30

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1.4.2. Lack of empirical research concerning the relationship between intellectual

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capital and each group of SMA practices ...................................................................31

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1.4.3. Lack of Vietnamese empirical studies on intellectual capital and SMA
practices.......................................................................................................................31

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SUMMARY OF CHAPTER 1 .......................................................................................33
THE

CONCEPTS

AND

INTELLECTUAL

CAPITAL

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2:

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CHAPTER

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MEASUREMENT MODELS .........................................................................................34

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2.1. Definition of intellectual capital ..............................................................................34

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2.2. Components of intellectual capital ..........................................................................37

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2.2.1. Human capital ...................................................................................................37
2.2.2. Structural capital ...............................................................................................38

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2.2.3. Relational capital...............................................................................................39

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2.3. Definition of corporate performance .......................................................................41

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2.4. Determinants of strategic management accounting practices .................................43

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2.5. Intellectual capital measurement models ................................................................46

3:

THEORETICAL

FRAMEWORK

AND

HYPOTHESES

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CHAPTER

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SUMMARY OF CHAPTER 2 .......................................................................................49

DEVELOPMENT ............................................................................................................50

other (H1) .....................................................................................................................51
3.1.2. Intellectual capital impacts on SMA practices (H2) ..........................................52
3.1.2.1. Underlying theoretical framework..............................................................52

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3.1.1. Human capital, structural capital and relational capital reciprocally affect each

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between intellectual capital and corporate performance ................................................50

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3.1. Mediating effect of strategic management accounting practices in the relationship


3.1.2.2. Hypotheses development (H2) ....................................................................54
3.1.3. Intellectual capital impacts on corporate performance (H3) .............................56
3.1.3.1. Underlying theoretical framework..............................................................56

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3.1.3.2. Hypotheses development (H3) ....................................................................57

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3.1.4. SMA practices impact on corporate performance (H4).....................................59

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3.1.4.1. Underlying theoretical framework..............................................................59

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3.1.4.2. Hypothesis development (H4) .....................................................................60

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3.1.5. The mediating role of strategic management accounting practices in the

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relationship between intellectual capital and corporate performance (H5) .................62

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3.2. Associations between intellectual capital components and each group of strategic

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management accounting practices ..................................................................................64

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3.2.1. Underlying theoretical framework ....................................................................65

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3.2.2. Hypotheses development (H6) ..........................................................................66

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3.3. Summary of the correlations in the two research models .......................................68

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SUMMARY OF CHAPTER 3 .......................................................................................71

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CHAPTER 4: RESEARCH METHODOLOGY ..........................................................72

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4.1. Selection of an appropriate regression approach .....................................................72

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4.2. Research process .....................................................................................................73

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4.2.1. Evaluation of reflective measurement scales ....................................................75

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4.2.2. Evaluation of formative measurement scales ...................................................77

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4.2.3. Evaluation of the fitness of structural model ....................................................78

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4.2.4. Evaluation of the significance and the stability of path coefficients ................79

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4.3. Unit of analysis and sample size .............................................................................80

4.3.2. Sample size .......................................................................................................81

4.4.1.1. Operationalization of value added (VA) ....................................................84
4.4.1.2. Operationalization of human capital efficiency (HCE) ..............................85

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4.4.1. Measures of each component of intellectual capital .........................................83

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4.4. Variables measurement ...........................................................................................83

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4.3.1. Unit of analysis and informants ........................................................................80


4.4.1.3. Operationalization of structural capital efficiency (SCE) ..........................85
4.4.1.4. Operationalization of relational capital efficiency (RCE) ..........................91
4.4.2. Measures of the variables of strategic management accounting practices .......91

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4.4.3. Measures of the variables of corporate performance ........................................92

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4.4.4. Measures of control variables ...........................................................................94

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SUMMARY OF CHAPTER 4 .......................................................................................96

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CHAPTER 5: SAMPLE CHARACTERISTICS AND MEASUREMENT SCALES

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ASSESSMENT .................................................................................................................97

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5.1. Data collection to construct the variables of SMA practices ..................................97

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5.1.1. Questionnaire structure .....................................................................................97

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5.1.2. Translating and pilot testing of the questionnaire .............................................98
5.1.3. Main data collection procedure .........................................................................99

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5.2. Sample characteristics ...........................................................................................101

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5.2.1. Industry type ...................................................................................................101

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5.2.2. Organization size and SMA practices type .....................................................102

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5.2.3. Respondents’ position type .............................................................................103

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5.3. The outcomes of reflective measurement scales assessment ................................104

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5.4. The outcomes of formative measurement scales assessment ................................106

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5.4.1. Calculation of measurement scale of innovation capital efficiency ...............106

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5.4.2. Calculation of measurement scale of organizational capital efficiency .........106

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5.4.3. Assessment of formative measurement scales related to the structural capital

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efficiency variable .....................................................................................................108

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5.5. Calculation of the variable of investment efficiency.............................................110

SUMMARY OF CHAPTER 5 .....................................................................................113

6.2. Empirical results – testing of reciprocal correlations between intellectual capital
components (H1) ...........................................................................................................115

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6.1. Evaluation of the fitness of theoretical models .....................................................114

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CHAPTER 6: DATA ANALYSIS AND DISCUSSION .............................................114

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5.6. Descriptive statistics and collinearity assessment .................................................111


6.3. Empirical results – testing of the correlations between intellectual capital
components and strategic management accounting practices (H2) ..............................117
6.4. Empirical results – testing of the direct correlations between strategic management

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accounting practices and corporate performance (H4) .................................................120

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6.5. Empirical results – testing of the direct correlations (H3) and indirect correlations

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between intellectual capital components and corporate performance (H5) ..................121

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6.6. Empirical results – testing of the associations of strategic management accounting

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practices and intellectual capital components (H6) ......................................................127

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6.7. Empirical results – testing of control variables .....................................................130

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SUMMARY OF CHAPTER 6 .....................................................................................132

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CHAPTER 7: IMPLICATIONS FOR MANAGING INTELLECTUAL CAPITAL

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BY STRATEGIC MANAGEMENT ACCOUNTING PRACTICES .......................133

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7.1. A discovery of three-stage value-creating process ................................................133

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7.2. Implications for the management, policy and research of intellectual capital ......135

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7.2.1. Recommendations for leaderships ..................................................................135

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7.2.2. Recommendations for policymakers...............................................................137
7.2.3. Recommendations for academic communities ...............................................139

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7.3. Implications for integration of strategic management accounting practices into

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intellectual capital management ...................................................................................140

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7.3.1. Orientations to manage intellectual capital by strategic cost management ....140

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7.3.2. Orientations to manage intellectual capital by competitor accounting ...........142

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7.3.3. Orientations to manage intellectual capital by strategic accounting...............145

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7.3.4. Orientations to manage intellectual capital by customer accounting .............147

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SUMMARY OF CHAPTER 7 .....................................................................................150

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CONCLUSION ..............................................................................................................151

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3. Practical managerial contributions ...........................................................................153
4. Limitation .................................................................................................................155
5. Further research directions .......................................................................................156

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2. Theoretical contributions ..........................................................................................152

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1. Summary of research findings ..................................................................................151


LIST OF THE AUTHOR’S PUBLICATIONS ...........................................................158
REFERENCES...............................................................................................................161

APPENDIX 1: PREVIOUS STUDIES INVESTIGATING THE RELATIONSHIP

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BETWEEN IC AND CORPORATE PERFORMANCE ...........................................185

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APPENDIX 2: REVIEW OF PRIOR INTERNATIONAL STUDIES OF

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STRATEGIC MANAGEMENT ACCOUNTING ......................................................188

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APPENDIX 3: PREVIOUS STUDIES INVESTIGATING THE RELATIONSHIP

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BETWEEN STRATEGIC MANAGEMENT ACCOUNTING AND CORPORATE

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PERFORMANCE ..........................................................................................................192

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APPENDIX 4: ELEMENTS OF HUMAN CAPITAL IN INTELLECTUAL

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CAPITAL REPORT ......................................................................................................195

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APPENDIX 5: ELEMENTS OF STRUCTURAL CAPITAL IN INTELLECTUAL

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CAPITAL REPORT ......................................................................................................197

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APPENDIX 6: ELEMENTS OF RELATIONAL CAPITAL IN INTELLECTUAL

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CAPITAL REPORT ......................................................................................................199

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APPENDIX 7: DESCRIPTIONS OF SMA TECHNIQUES .....................................201

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APPENDIX 8: CATEGORIZATION OF THE IC MEASUREMENT METHODS

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UNDER MARKET CAPITALIZATION MODEL ....................................................205

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APPENDIX 9: CATEGORIZATION OF THE INTELLECTUAL CAPITAL

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MEASUREMENT METHODS UNDER RETURN ON ASSETS MODEL ............208

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APPENDIX 10: CATEGORIZATION OF THE IC MEASUREMENT METHODS

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UNDER DIRECT IC MODEL .....................................................................................210

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APPENDIX 11: CATEGORIZATION OF THE INTELLECTUAL CAPITAL

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MEASUREMENT METHODS UNDER SCORECARD MODEL ..........................213

APPENDIX 12: INDICATORS FOR REFLECTIVE MEASUREMENT OF SMA

APPENDIX 15: CRONBACH ALPHA AND EFA RESULTS OF THE
INDICATORS OF SMA CONSTRUCTS ...................................................................230

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APPENDIX 14: SURVEY FORM IN VIETNAMESE ..............................................224

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APPENDIX 13: SURVEY FORM IN ENGLISH .......................................................218

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CONSTRUCTS ..............................................................................................................215


APPENDIX 16: EVALUATION OF INDICATORS AND LATENT VARIABLES
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APPENDIX 17: CROSS LOADINGS OF REFLECTIVE MEASUREMENT

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SCALES ..........................................................................................................................233

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APPENDIX 18: CORRELATIONS, SQUARE ROOT OF AVE AND HTMT ......234

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APPENDIX 19: THE ESTIMATION OF SGA EXPENDITURES AMORTIZATION

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RATE ..............................................................................................................................235

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APPENDIX 20: THE ESTIMATION OF ORGANIZATIONAL CAPITAL .........239

APPENDIX

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APPENDIX 21: THE ESTIMATION OF INVESTMENT EFFICIENCY .............241
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DESCRIPTIVE

STATISTICS

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CORRELATION

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COEFFICIENTS............................................................................................................244

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APPENDIX 23: COLLINEARITY STATISTICS – INNER VIF VALUES ...........246

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APPENDIX 24: PLS ALGORITHM RESULT WITH THE ASSET TURNOVER

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VARIABLE ....................................................................................................................247

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APPENDIX 25: PLS ALGORITHM RESULT WITH THE INVESTMENT
EFFICIENCY VARIABLE ..........................................................................................249

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APPENDIX 26: PLS ALGORITHM RESULT WITH THE RETURN ON EQUITY

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VARIABLE ....................................................................................................................251

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APPENDIX 27: PLS ALGORITHM RESULT WITH THE TOBIN Q VARIABLE
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APPENDIX 28: REGRESSION RESULTS BETWEEN IC COMPONENTS AND
EACH GROUP OF SMA PRACTICES ......................................................................255

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APPENDIX 29: THE INTELLECTUAL CAPITAL BENCHMARKING SYSTEM

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FRAMEWORK ..............................................................................................................256

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APPENDIX 30: LIST OF PARTICIPATING FIRMS ..............................................257

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–I–

LIST OF TABLES
Table 1.1. Milestones of significant contributions to the identifications, measurement and

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reporting of intellectual capital ............................................................................................9

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Table 1.2. Topics of intellectual capital research in the accounting discipline .................11

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Table 1.3. Methods used in intellectual capital accounting research ................................14

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Table 1.4. Literature review of essential techniques in strategic management accounting

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toolbox ...............................................................................................................................20

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Table 1.5. Research trends on management accounting in Vietnam .................................28

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Table 2.1. Definitions of intellectual capital......................................................................35

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Table 2.2. Some key differences between strategic and traditional management

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accounting ..........................................................................................................................45

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Table 2.3. Summary of measurement approaches that are mainly used in intellectual

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capital research...................................................................................................................47

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Table 3.1. Integration of firm-level strategy and reliance on human capital .....................54

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Table 5.1. Development of the final sample in the main study .......................................100

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Table 5.2. The number of respondents by Industry type .................................................102

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Table 5.3. The number of respondents by Organization size and SMA practices type...103

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Table 5.4. Number of Respondents by Positions type and Working Years type in the

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current organization .........................................................................................................104

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Table 5.5. VIF, Significance and relevance of formative indicators ...............................109

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Table 5.6. The coefficient of explanatory variables in Equation 4.20 .............................110

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Table 6.1. Summary of the SRMR results of 5-testing models .......................................114

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Table 6.2. Summary of the results of the first hypothesis testing....................................116
Table 6.3. Summary of the results of the second hypothesis testing ...............................119

Table 6.7. Summary of the testing results of control variables .......................................131

Table 7.1. Example of intellectual capital components in value chain ...........................141

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Table 6.6. Summary of the results of the sixth hypothesis testing ..................................130

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Table 6.5. Summary of the results of the third and fifth hypothesis testing ....................126

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Table 6.4. Summary of the results of the forth hypothesis testing ..................................120


– II –

LIST OF FIGURES
Figure 2.1. Four-stage model of corporate market valuation ............................................43

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Figure 3.1. The first research model ..................................................................................51

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Figure 3.2. Basic contingency framework .........................................................................60

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Figure 3.3. The second research model .............................................................................64

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Figure 4.1. The research process .......................................................................................74

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Figure 4.2. Calculation of sample size of the first research model....................................82

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Figure 4.3. Calculation of sample size of the second research model ...............................82

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Figure 4.4. The value-added intellectual coefficient model ..............................................83

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Figure 5.1. Assessment of convergent validity of formative indicators relative to

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structural capital ...............................................................................................................108

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Figure 7.1. The three-stage value-creating process by IC and SMA practices................134

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Figure 7.2. Five-step intellectual capital management model .........................................137

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– III –

LIST OF ABBREVIATIONS

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AVE

Average variance extracted

CIMA

The Chartered Institute of Management Accountants

EFA

Explanatory factor analysis

HC

Human capital

HoSE

Hochiminh Stock Exchange

HNX

Hanoi Stock Exchange

HTMT

Heterotrait-Montrait test

IAMV

Investors assigned market value

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Meanings

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Abbreviation

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Intellectual capital

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Intellectual capital benchmarking system

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Ordinary least square

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OLS

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ICBS

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Partial least square structural equation modelling

RBV

Resource-based view

RC

Relational capital

R&D

Research and development

RO

Research objective

ROA

Return on assets

ROE

Return on equity

SC

Structural capital

SCM

Strategic cost management

SEM

Structural equation modelling

SD

Standard deviations

SGA

Selling and general administrative expenses

SMA

Strategic management accounting

SMEs

Small and medium enterprises

SRMR

Standardized root mean square residual

VA

Value added

VAIC

Value Added Intellectual Coefficient

VIF

Variance inflation factor

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PLS-SEM

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– IV –

ABSTRACT
Title of dissertation:

Mediating effect of strategic management accounting practices

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in the relationship between intellectual capital and corporate

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performance – Evidence from Vietnam

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Abstract:

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Reason for writing – The organizations with strong level of intellectual capital should

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have developed management accounting with strategic directions that support such

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endeavors. In the history of IC accounting research, the focus of empirical studies has

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always been the direct relationship between intellectual capital components and corporate

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performance. A little research investigates that intellectual capital has an indirect

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relationship to corporate performance via the mediating role of management accounting.

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Furthermore, Vietnamese managers have not actually realized the critical value of

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intellectual capital in their managing process; hence, this study is expected to raise

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Vietnamese managers’ awareness in terms of intellectual capital.

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Purpose – This study investigates empirically the issue of whether an organization
develops strategic management accounting (SMA) system that supports intellectual capital

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(IC) which in turn to enhance its financial performance. If doing so, how SMA manages

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IC components to boost an organization’s financial performance.

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Method – Using secondary data drawn from Vietnamese listed companies and Public’s

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Value-Added Intellectual Coefficient (VAICTM) as the efficiency measure of IC

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components and primary data through questionnaire survey to investigate the level of SMA

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practices, the author constructs regression model to examine the relationship between IC

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components and corporate performance via the mediating role of SMA practices. In

which components of IC.

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addition, this study also analyses which group of SMA practices are related to manage

influence of IC components over corporate performance. Finally, in terms of IC
management, the study highlights only strategic accounting approaches are used to manage
human capital. The findings validate the usefulness of all groups of SMA practices as

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mediating role of SMA practices, SMA practices fully or partially mediates the positive

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level of SMA practices and corporate performance. The author finds that under the

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Findings – The results support the hypothesis that firms’ IC has a positive impact on the


–V–

techniques to manage structural capital. Except for strategic accounting approaches, three
remaining groups of SMA practices are most appropriately situated as techniques of
relational capital management.

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Originality/ value – This study contributes to bridge the research gap and adds to existing

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resources management literature on the Resources (i.e. intellectual capital) – Practices (i.e.

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SMA practices) – Performance (i.e. financial performance) link. It discoveries three-stage

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value creating process and thereby presents the implications for integrations of SMA

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practices into IC management. In addition, this study contributes to a growing body of

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literature providing empirical evidence on IC and SMA practices roles in improving

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investment efficiency.

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Conclusion: This study provides an alarming to Vietnamese managers to become more

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aware of the role played by intellectual capital in generating a firm’s value, with support
from the techniques of SMA. Therefore, new demands of Vietnamese managers are being

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performance.

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imposed on management accounting to capture, measure and report IC value and

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Keywords: Corporate performance, human capital, intellectual capital, strategic
management accounting practices, structural capital, relational capital

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INTRODUCTION
1. Background

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It is often argued that organizations in today’s knowledge-based economy do not only

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initially invest in physical assets, nevertheless in intangibles, as these are but also today’s

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value drivers (Mehralian, Rasekh, Akhavan, & Ghatari, 2013). Amongst these intangible

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assets, intellectual capital plays a key role, and due to the huge investments in intellectual

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capital, its management becomes a critical issue given the direct and indirect advantages.

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Some of these advantages may consist of the added value of the knowledge that is

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processed, the learning process included in the measurement of intellectual capital (Roos,

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Roos, Dragonetti, & Edvinsson, 1997), the enhancement of sustainable competitive

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advantages arising from the strategic assets i.e. intellectual capital (Riahi-Belkaoui, 2003),

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the determinants and the foremost sources of company success (Alum & Drucker, 1986).

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Like the countries with free trading, Vietnam has adopted an open-door policy since

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1990’s, the level of competition in the economy has been therefore increasing significantly

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for most Vietnamese enterprises when Vietnam’s integration in AEC and TPP, thereby,

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managers in Vietnamese firms should be aware of the importance of intangibles as well

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intellectual capital, which achieve sustainable competitive advantages in the international

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competitive arena. This will be a motivator to impulse scholars doing research on the

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influence of intellectual capital in the Vietnamese context.

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Based on the concerns of the society, the concept of intellectual capital was

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introduced in the large body of literature and has expanded in three stages. The first stage

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started in the 1990s and concentrated on increasing awareness, defining concepts,

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reviewing case studies and developing primary definitions (Mehralian et al., 2013). The

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second stage, which started in the year of 2000, consider measurement, modelling,

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international case studies, and various level of analysis (Mehralian et al., 2013). Therefore,

capital (or some of its components) and corporate performance. The third stage of IC
research, which began from 2004, focuses on the managerial implications of managing IC.
Although most of the studies on intellectual capital have been conducted in developed
Western countries and some of Asian developing countries such as Thailand, Malaysia,

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research methods. In general, these studies find a positive relationship between intellectual

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intellectual capital and corporate performance, that has been undertaken by a variety of

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there are a numerous piece of research in many countries, affirming the correlation between


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Hong Kong, this specific area of intellectual capital has been neglected in the body of
Vietnamese literature.
On the other hand, as being introduced by CIMA, strategic management accounting

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is a form of management accounting which emphasis is placed on information which

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relates to key strategic decision (CIMA, 2014a). Simultaneously, following by resource-

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based theory, intellectual capital is the asset used for strategic purposes. Strategic

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management accounting would therefore appear to have a potential role to play in

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intellectual capital management. Notwithstanding the intellectual capital literature in

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accounting is varied but mainly addresses external reporting or the measurement or the

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valuation of such strategic assets, there has been little discussion on the two-way

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relationship between intellectual capital and strategic management accounting. Firstly, the

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organizations with strong levels of intellectual capital will have the assets as the necessary

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concrete to develop strategic management accounting system to support the managerial

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efforts in terms of identifying, measuring, and communicating the value drivers (Tayles,

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Pike, & Saudah, 2007). Secondly, once strategic management system has been evolved, it

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will address the issues of identifying, measuring, and communicating intellectual capital
to support the strategic objectives. The challenge, therefore, is to devise a system of

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strategic management accounting practices that are in alignment with the unique attributes

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and the competitive strategies of the company. In other words, it must be possible to

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identify and value, with some precision, the component elements of the generic intellectual

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capital of the company. Furthermore, when analysing the Vietnamese transitional

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economic context, Vietnamese enterprises have gradually applied the advanced accounting

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techniques, in line with market mechanisms because many wholly foreign-owned
enterprises established in Vietnam have been providing practical knowledge of strategic

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management accounting, which has been introduced to Vietnamese practitioners and

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scholars. Therefore, it is undeniable that medium and large enterprises in Vietnam do not

the author believes the necessity of studying the correlation between intellectual capital,
strategic management accounting practices and corporate performance in the case study of
Vietnam. Vietnamese business environment will provide enough information about
intellectual capital as well as strategic management accounting practices that support such

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thereby started to be studied in Vietnam since the 2010s. Based on all above arguments,

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business operations. Not surprisingly, the issue of strategic management accounting

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have any understanding of how to implement strategic management accounting in their


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research endeavours. More particularly, the author emphasizes “the mediating role of
strategic management accounting practices in the relationship between intellectual capital
and corporate performance”.

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2. Research questions and research objectives

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The research gaps mentioned in Section 1.4 suggest that a need to investigate the

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effects of intellectual capital and strategic management accounting practices on corporate

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performance in the organizations operating in the transitional economy such as Vietnam

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because these issues have not been discovered in such economy. This also raises the issue

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of whether an organization should develop strategic management accounting system that

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supports intellectual capital which in turn to enhance its financial performance. If doing so,

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it is also inevitable that how strategic management accounting manages intellectual capital

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have been proposed:

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to boost an organization’s financial performance. Accordingly, three research questions

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Research question 1: What is the direct effect of intellectual capital components on

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corporate performance in Vietnamese enterprises?

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Research question 2: What is the effect of intellectual capital components on

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corporate performance in the presence of strategic management accounting

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practices?

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Research question 3: How do strategic management accounting practices handle

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Overall research objective:

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each component of intellectual capital to improve corporate performance?

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The overall research objective of this dissertation is to empirically examine the

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association between intellectual capital, strategic management accounting practices and

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corporate performance. More importantly, it investigates the mediating effect of strategic

management accounting practices on the relationship among intellectual capital

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components and three financial dimensions of corporate performance. It also empirically

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RO1: Testing the direct impact of each of intellectual capital components on
corporate performance.

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Specific research objectives:

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intellectual capital components.

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analyses the role of strategic management accounting practices playing the management of

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RO2: Examining the direct influence of strategic management accounting
practices over corporate performance.

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RO3: Investigating an indirect path between intellectual capital components and

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corporate performance through the mediating role of strategic management

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accounting practices.

practices (i.e. strategic cost management, competitor accounting, strategic

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RO4: Empirically analysing which group of strategic management accounting

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accounting and customer accounting) are related to manage which components

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of intellectual capital.

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RO5: Providing additional evidence on the interconnection of intellectual capital

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components.

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3. Research object and research scope

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The research object of this dissertation is the relationship among intellectual capital,

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strategic management accounting practices and corporate performance. Therefore, the unit

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of analysis is a business organization. To investigate SMA practices applied in a business

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organization, the data is collected through questionnaire survey which is sent to SMA

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practitioners; thereby, the unit of observation is the informant (i.e. managers or members

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of top management) with knowledge about accounting, planning or finance and at least

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two years of working experience in the current organization. Moreover, the unit of

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which draw financial data on IC and corporate performance.

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observation is also financial information in annual reports or financial statement reports

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The scope of this study is limited in three aspects. Firstly, this study selects Vietnam,
a developing country in Asia with a transitional economy and a collectivist culture, as the

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research site for observation and empirical testing. Secondly, the observed business

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organizations are enterprises listed on Hochiminh Stock Exchange (HoSE) and Hanoi

companies where respondents has been working instead of using panel data with many
successive years to analyse intellectual capital alike the previous studies. However, to
calculate some variables such as organizational capital, innovation capital, investment

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only uses 2016 financial information about IC and financial performance of the public

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Thirdly, since the survey related to SMA practices is conduct in the year of 2016, this study

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Stock Exchange (HNX) in order the author to collect financial data more conveniently.

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efficiency, the author has to collect financial data in the period of 7 years (from 2010 to
2016).

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4. Methodology

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This study first reviews the literature related to intellectual capital, strategic

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management accounting practices, corporate performance before proposing two research

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models with six hypotheses. This study mainly uses quantitative research method by using

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empirical survey data and financial data obtained from a sample of at least 127 public

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enterprises in Vietnam for the year of 2016. Due to the complex of the research models

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with mediators and a small sample size context, data analysis is conducted by applying

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partial least squares structural equation modelling (PLS-SEM) with the support of SPSS

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24.0 and SmartPLS 3.1 software packages.

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5. Outline of the dissertation

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chapters, as follows:

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Besides the parts of introduction and conclusion, this dissertation is organized with 7

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Introduction part. This part states the background well as the research questions and

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scope.

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objectives. Then it briefly describes the research methodology and provides the research

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Chapter 1: Literature review. This chapter reviews the literature in terms of

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intellectual capital, strategic management accounting studied in many different countries
as well as in Vietnam so as to reveal the research gaps which are desirable research

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directions to develop the research objectives of this dissertation.

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Chapter 2: The concepts and intellectual capital measurement models. This chapter

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not only determines the definitions of intellectual capital and its components but also

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discusses the concepts of corporate performance and strategic management accounting

practices in order to explain the relationships amongst these concepts. Next, the existing

Chapter 3: Theoretical framework and hypotheses development. This chapter
focuses on underlying conceptual framework to develop the testable hypotheses of the two

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understood in the next chapters.

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literature extant so that the measurement of the intellectual capital variables are clearly

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theories underpinning the measurement of intellectual capital are introduced in the


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research models, that answer research questions to bridge research gaps. This chapter then
presents the arguments that led to six testable hypotheses.
Chapter 4: Research methodology. This chapter presents in detail the development

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of the research methodology. It describes and explains how the constructs in the theoretical

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model are operationalised and measured. It also discusses the unit of analysis and

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informants as well as sample size.

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Chapter 5: Sample characteristics and measurement scales assessment. This chapter

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firstly demonstrates how to collect data to construct the variables of SMA practices and the

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pilot test to examine the attributes of the indicators of SMA practices before collecting

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main data. The next is to represent the refinement of the measurement scales from the data

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obtained in Vietnamese public enterprises. Finally, it provides descriptive statistics of the

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research data and an evaluation of collinearity issue in the inner structural models.

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Chapter 6: Data analysis and discussion. Chapter 6 presents and analyses the data

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used in this study. It is started at the evaluation of the fitness of theoretical models. The

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next sections present the empirical results of examining the hypotheses developed in

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Chapter 3. It includes the outcomes of the direct regressions and the mediated path

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regressions that are processed by the tool of SmartPLS 3.1. The empirical results are

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arranged in order from the first to sixth hypothesis and finally the testing results of control

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variables. Not only is the analysis of the data described but corresponding to each

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significant proposition it is also explained in the managerial context.
Chapter 7: Implications for managing intellectual capital by strategic management

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accounting practices. The managerial implications of this study are outlined in this chapter.

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It is started at a discovery of three-stage value creating process, which is inferred from the

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testing results of six hypotheses. This chapter also presents the suggestions for leaders,

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policymakers and academic community the approaches to manage intellectual capital.

Particularly, the last section suggests the orientations how to manage intellectual capital

this study are also summarized, followed by a discussion on the research limitations and
suggested directions for further research.

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presented in this part. Then, the theoretical contributions and managerial contributions of

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Conclusion part. Following the introductory part, a summary of the main findings is

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following each group of strategic management accounting techniques.


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CHAPTER 1: LITERATURE REVIEW

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The first chapter reviews the literature in terms of intellectual capital, strategic

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management accounting studied in many different countries as well as in Vietnam so as to

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reveal the research gaps which are desirable research directions to develop the research

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objectives of this dissertation. This chapter is structured into four main sections. Section

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1.1 presents history, research trends as well as methods used to discover the empirical

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relationships between intellectual capital and corporate performance in the accounting

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discipline. Section 1.2 continues to review the international studies to identify four main

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research themes of strategic management accounting focused by scholars. Next, section

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1.3 is developed as a distinctive part to review intellectual capital and strategic

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management accounting studies conducted in Vietnam since this dissertation is undertaken

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in Vietnamese context. All above sections are aimed at identifying three major research

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gaps in the Section 1.4.

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1.1. Review of international studies of intellectual capital

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When changing from an industrial-based economy to knowledge-based economy, a

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firm’s value is no longer measured solely on the basis of financial results; rather than value

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of activities that develop knowledge resources must also be considered (Stewart &

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Ruckdeschel, 1998). Doing so helps understanding how employees, stakeholders and

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activities contribute into value creation, leading to the challenge of how to identify,

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measure and report on the value of intellectual capital (Dumay, Guthrie, & Ricceri, 2012).

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Therefore, the emergence of the intellectual capital topic in the mid-1990s has produced

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literature spanning a range of research disciplines. In retrospect, it appears that like a
research fashion (Alcaniz, Gomez-Bezares, & Roslender, 2011), the intellectual capital’s

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specialist journals have been continuously developed including the Journal of Intellectual

Journal, European Accounting Review, the Accounting Organizations and Society Journal
especially important in the accounting discipline of intellectual capital measurement and
management.

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business and management journals, with the Accounting, Auditing and Accountability

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Human Resource Costing and Accounting, as well as within the pages of many leading

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Capital, the International Journal of Learning and Intellectual Capital, the Journal of

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1.1.1. Stages in developing intellectual capital as a research field
The historical perspective is a vital component in fostering an understanding of the
context within which intellectual capital came to be viewed as the essential business

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element that it is today. Petty and Guthrie (2000) also outlined two stages in researching

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intellectual capital. The first-stage efforts typically focused on raising awareness as to why

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recognizing and understanding the potential of IC towards creating and managing

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sustainable competitive advantages is extremely essential (Petty & Guthrie, 2000).

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Additionally, attempts were characterized by the creation of guidelines and standards.

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These early publications pay attention to the fact that intellectual capital is something

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significant and should be measured and reported, but without referring to specific empirical

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research (Petty & Guthrie, 2000). Most research conducted prior to the mid-1990s is

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considered first stage (Petty & Guthrie, 2000). The second stage of IC research gathered
further evidence, at an organizational level, focusing on the how of IC capital and labour

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market reacted towards the potential for IC to create value (Petty & Guthrie, 2000). In

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general, the first and second stages contributed to a commonly accepted terminology of

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intellectual capital. Several classifications of IC have been provided, resulting in the

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identification of three main IC components. Together with the appearance of three

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components of IC, the researchers defined the accounting discipline of IC as a

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management, measurement and accountability toward IC (Dumay et al., 2012). According

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to Dumay et al. (2012), a third stage of IC research is emerging and is characterised by

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research critically examining IC in practice, devoted to the managerial implications of how

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to use IC in managing a company, at the beginning with the 2004 special edition of Journal

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of intellectual capital entitled “IC at the crossroads – theory and research” by Marr and

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Chatzkel (2004). While second stage IC research is predominately devoted to evaluating

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IC’s influence on financial outcomes, third-stage IC research focuses on “the deeper
managerial implications of managing IC in all types of organisations and can be classified

Garanina, 2013).
Despite looking at three developing stages of IC, Guthrie (2001) provides a timeline
of major IC research milestones, as summarized in Table 1.1.

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importance of the products and services to customers and other stakeholders (Dumay &

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third stage considers value from IC is not just monetary but incorporates worth and

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as bottom-up research as opposed to top-down” (Dumay & Garanina, 2013). Thus, the


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Table 1.1. Milestones of significant contributions to the identifications,
measurement and reporting of intellectual capital

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Progress

Early

General notion of intangible value (often generically labelled

1980s

“goodwill”).

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Period

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The “information age” takes hold and the gap between book value and

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Mid

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market value widens noticeably for many companies.

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1980s

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accounts that measure intellectual capital (Sveiby, 1989).

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1980s

Early attempts by practitioner consultants to construct statements/

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Late

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 Initiatives to systematically measure and report on company

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stocks of intellectual capital to external parties (e.g. The Swedish

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Early

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Coalition of Service Industries (SCSI) (1995)).

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 Kaplan and Norton (1992) introduce the concept of a Balanced

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Scorecard. The Scorecard evolved around the premise that “what

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work on “the knowledge creating company”. Although the book

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1990s

 Nonaka and Takeuchi (1995) present their highly influential

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you measure is what you get”.

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concentrates on “knowledge”, the distinction between knowledge

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and Intellectual Capital is sufficiently fine as to make it relevant

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to those with a pure focus on Intellectual Capital.

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 Also in 1994, a supplement to Skandia’s annual report is

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produced which focuses on presenting an evaluation of the

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company’s stock of Intellectual Capital. “Visualizing Intellectual

Sullivan (1996); Sveiby (1997)). Edvinsson and Malone’s work,

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books on the topic (Kaplan and Norton (1996); Edvinsson and

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 Pioneers of the Intellectual Capital movement publish bestselling

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seeking to follow Skandia’s lead (Edvinsson & Sullivan, 1996).

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Capital” generates a great deal of interest from other companies