Summary of Doctor of Accounting thesis: Impacts of budgeting on performance of small and medium enterprises in Vietnam

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INTRODUCTION

studies only offer recommendations instead of measuring the influence of budgeting on firm performance. Due to all above reasons, the author selected "Impacts of budgeting on performance of small and medium enterprises in Vietnam" as the topic of the thesis. 2. Research objectives and research questions In this section, the author introduced the summary of the thesis. The organization covers (i) Rationale, (ii) Research objectives and research questions, (iii) Research subject and scope, (iv) Methodology, (v) New contributions of the thesis and (vi) Structure of the thesis. 1. Rationales

The thesis's primary research objective is to identify the impacts of budgeting on the performance of Vietnamese SMEs. Specific research objectives include examining the impacts of business budget's different aspects on the performance of Vietnamese SMEs; evaluating the controlling and moderation role of firm size and the mediating role of managerial performance in the relationship between budgeting and business performance of Vietnamese SMEs.

3. Research subject and scope of research

The thesis studied the influence of budget on performance of Vietnamese SMEs. The research object is companies under the group of SMEs specified in Decree 39/2018/ND-CP on guidelines for law on support for SMEs in 2017. The surveyed subject is managers in Vietnamese SMEs.

In terms of business performance, SMEs in particular and Vietnamese enterprises in general have made great progress, but there are still many shortcomings which require solutions. According to the report by VCCI (2018), the average revenue growth rate of enterprises was 19.5%/year, but it has been on a downward trend in recent years. Meanwhile, the average rate of business losses was still 42.3%, even though the government implemented the SME support package in 2012. At the same time, the white paper of SMEs in Vietnam (2017) also shows that indicators reflecting profitability such as ROA, ROE, and ROS of this group are at a low level of approximately 5%/year, especially with the group of micro-enterprises, it shows weak management when the above indicators have a relatively large fluctuation.

The scope that the study focused on was SMEs in Hanoi and Ho Chi Minh City. Research data was collected from April to December in 2019. In terms of contents, the thesis only concentrated on budget, not capital budgeting.

4. Research methods

The study used a combination of qualitative and quantitative research methods. Specifically, the quantitative research was divided into two stages which are preliminary quantitative research and official quantitative research.

5. New contributions of the thesis 5.1. In terms of theoretical aspects

First of all, the thesis is one of few researches studying the impacts of budget on business performance of SMEs in Vietnam. Although studies on the relationship between budget and business performance have been conducted in many countries around the world, in Vietnam, research with this form of approach is relatively new. In this current situation, many studies on management tools in Vietnamese SMEs have been conducted and they are of great significance in terms of both theoretical and practical aspects in application. Especially in the context that the country is constantly integrating into the world economy, this issue has become even more urgent. One of the most commonly used management tools in corporate governance is business budget or budget inshort. According to Kaplan (1991), budgeting is an important part of the accounting system in corporate governance, it helps businesses adapt more easily to changes in the business environment as well as use business resources more effectively. Regarding Vietnam's SMEs, in particular, which are limited in size, and lack of technology development, budget proves to be a more suitable management tool than ever. In fact, many research in terms of theory and application in Vietnam have recognized the importance of budgeting in corporate governance and its impacts on business results. However, these

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Vietnam. This also serves as the basis of recommendations for managers on selecting the suitable budgeting model and how to improve the business performance in terms of financial and non-financial aspects. 6. Structure of the thesis

The research consists of an introduction and five specific chapters as follows:

Introduction

Chapter 1– Research overview

Chapter 2 –Theoretical basis, hypotheses and research model Chapter 3 –Methodology Secondly, although there have been many previous studies on the impacts of budget on enterprises' business performance, their findings are not consistent. Therefore, the thesis will be more detailed when evaluating the controlling and regulatory role of firm size of Vietnamese SMEs. In addition, previous studies the dependent variable named business mainly focused on exploiting performance on the basis of the managerial performance while the measurement of business performance still focused on many financial indicators such as revenue, cost, profits... Therefore, the author will concentrate on exploiting gaps related to the impacts of budgeting on the financial and non-financial results as well as the mediating role of managerial performance in this relationship. Chapter 4 –Research findings Chapter 5 – Discussion and recommendations

Thirdly, the use of structural equation modeling (SEM) in data processing enabled the author to obtain new research findings compared to using regression methods in previous studies. By considering research variables as latent variables instead of observed variables, SEM allowed the estimation of errors in the measurement of each research variable. In addition, SEM is a suitable method in the context of the research model requiring the testing of various hypotheses as well as intermediate variables, control variables and moderating variables. Moreover, until now, there are very few studies using SEM in budget in Vietnam as well as in the world.

Finally, in some previous studies on budget in enterprises, they did mention the controlling role of firm size on business results, but not the influence of this factory's regulatory role on budget and hence the business performance. By applying multi-group analysis in SEM, the thesis clarified the relationship between the regulatory role of firm size with impacts of each characteristic of budget on each type of business performance in Vietnamese SMEs. 5.2. In terms of practical aspects

Regarding the practical aspects, results of qualitative research provided readers with the perception of managers in Vietnamese SMEs about budget and its importance with business performance.

Concurrently, results of quantitative analysis also indicated which aspect of budget has the strongest impacts on the business performance of SMEs in

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CHAPTER 1 RESEARCH OVERVIEW

The thesis approached

uniformity in patterns of impacts, degree of influence and forms of influence on performance. Hirst and Lowy (1990) discovered the direct and negative impacts of this factor on budgeting objectives and its indirect and positive influence on degree of budget goal difficulty. Additionally, previous studies mainly used budgetary performance to measure performance instead of expanding on other scales. Moreover, the application of linear regression also limits results achieved from other above-mentioned studies. the research overview of domestic and international studies based on primary aspects of budget. Concurrently, the author carried out detailed analysis on the measurement of business performance and research methods in each specific section. 1.4. Research on impacts of scope and frequency of budgeting 1.1. Research on impacts of budget goal clarity

According to Wijewardena and De Zoysa (2001, 2004), when the company has a higher frequency of using the budgeting and applying it to more departments, it will increase the company's business performance. In Vietnam, Pham Ngoc Toan (2010) also made recommendations on the relationship between the scope of budgeting and performance in the interaction with firm size. It can be seen that research on the effects of budget on business performance in terms of frequency and scope is suitable for SMEs. Concurrently, the differences in research context, measurement scale of business performance and methods of analysis create the diversity in results in previous studies. Research on impacts of budget goal clarity on firm performance and managerial performance is one of the most popular research directions. The diversity in the measurement of performance is the foundation which creates the differences between previous researches. In addition to studies on direct influence of budget goal clarity on performance (Kenis, 1979), there are also many studies focusing on indirect impacts through using slack budget (Yuen, 2004). Linear regression was widely used in previous studies to determine the correlation between budget goal clarity with performance. However, this method does not clearly identify the correlation between budget goal clarity and other latent variables that also have influence on performance. 1.5. Research on impacts of budget sophistication 1.2. Research on impacts of budget goal difficulty

Research on budget sophistication on performance is relatively popular. Many previous studies exploited this relationship in capital budgeting such as Pike (1984, 1988, 1989), Farragher (2001), Verbeeten (2006). Concurrently, some authors conducted research on impacts of budget sophistication on performance such as Merchant (1981) and Qi (2010). However, differences in the research context, methods of calculation and analysis resulted in the inconsistency in research results. 1.6. Research on impacts of budget participation.

The relationship between degree of budget goal difficulty and performance was clearly emphasized in many previous studies. However, the inconsistency in research findings is the premise for future studies to inherit and develop. Budget goal difficulty could positively affect work motivation and increase performance (Qi (2010), Hirst (1990) hay Martin (2015)). However, it could also create working pressure and negatively affect performance Kenis (1979). Also, impacts of the expansion of measurement scales on performance are the basis of new developments for future studies (Martin (2015), Jamil (2015)). 1.3. Research on impacts of budgeting feedback

Some previous studies by Kenis (1979), Brownell and Innes (1986) discovered that the higher degree of budget participation increases the firm performance. On the other hand, Young (1985) and Lu (2011) showed the opposite relationship with the existence of slack budget. Furthermore, the trend and degree of the relationship between budget participation and performance is Budgeting feedback is one of many aspects reflecting the controlling role of budget and its certain impacts on firm performance as stated in various previous studies. Nevertheless, previous researches have yet have the

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Research overview also shows that there has not been a study that focuses simultaneously on impacts of budget on business performance in terms of financial, non-financial aspects and managerial performance. heavily affected by intermediary factors such as the importance of evaluation commitments Dunk (1993). Therefore, studies on impacts of budget participation and firm performance are still being carried out extensively. 1.7. The role of the enterprise's characteristics in the relationship between budget and performance. Fourthly, managerial performance is often used in studies on the impact of budgeting on business performance; However, there has not been a research can clarify the relationship between the two forms of performance.

Finally, the use of multivariate regression analysis is the limitation of previous studies in examining the impacts of budget on performance with the participation of controlling, mediating and moderating variables in the research model. By using SEM, the thesis explains the controlling, moderating role of a company's characteristics, the mediating role of managerial performance in the relationship between budget and business performance. 1.8.2. Research directions implemented in the thesis Characteristics of a company, typically the size and form of ownership also affect the relationship between budget and performance. Qi (2010) and Jamil (2015) emphasized the controlling role of a firm's characteristics in the research model studying impacts of budget on performance. In Vietnam, Pham Ngoc Toan (2002) also suggested that companies should select the methods to organize budget in accordance with the business scale. Therefore, an enterprise's characteristics in general and firm size in particular have always been an important control variable in research models related to the impacts of budget on SMEs' performance. 1.8. Research gaps and research directions implemented in the thesis 1.8.1. Research gaps Based on the research gaps identified from the process of reviewing related works on the relationship between budgets and business performance, the thesis will focus on these directions as follows

(1) The thesis studies the impacts of budget on performance of SMEs in Vietnam as this is a completely new research context that has not been done in any previous studies. The differences in economic conditions and cultural environment in Vietnam will offer new discoveries for the thesis. Firstly, many studies on the relationship between budget and firm performance have been conducted in the world, especially in developed countries such as the US and European nations. Recently, some similar research have been carried out in China and India, but there has been no such studies on this topics implemented in Vietnam.

(2) The study expands the measurement scale for business performance in both financial and non-financial aspects. Concurrently, the author clarifies the mediating role of managerial performance in the research model related to the impacts of budget on performance.

(3) The thesis also inherits the approach by Qi (2010) when studying the controlling role of firm size in the research model. However, the research uses the classification according to the capital size instead of the revenue size like previous studies used to implement. Secondly, many previous studies focused heavily on exploiting the impacts of various aspects of budgeting on performance. However, in some aspects such as budget participation, these studies did not have the consistency in research approach as well as research findings. Some authors such as Kenis (1979) claimed that the deeper budget participation is the higher firm performance. Meanwhile, authors like Young (1985) argued that managers who participate too deeply in budgeting will increase the slack budget and thereby reduce the performance. Thirdly, previous studies usually used

(4) By using SEM, the thesis tests the moderating role of firm size in the relationship between each characteristic of budget and performance of SMEs in Vietnam. the data related managerial performance or results from the application of budgeting objectives and the financial aspect of business performance were deeply concentrated (Kotane, 2015).

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CHAPTER 2

THEORETICAL BASIS, HYPOTHESES AND RESEARCH MODEL managerial corporate governance (Mahoney, 1965). In fact, managerial performance is very popular in research related to budget in enterprises due to the similarity between the measurement indicators with basic functions of the budgeting.

Financial performance is the company's business performance reflected through the firm's performance of financial indicators (Murphy et al., 1996). In the relationship between budget and performance, financial performance was also used in some recent studies such as Yusuf (2005), Qi (2010), Abdirisaq (2013). and Jamil (2015). However, this approach has not been extensively exploited. This chapter presents general theories related to budget and measurement of business performance. Additionally, the author also explains the relationship between and budget and performance based on three theories including agency theory, contingency theory, goal setting theory of motivation Locke (1990). Based on the combination of these fundamental theories and research overview presented in Chapter 1, the study also develops the research model and various research hypotheses.

2.1. Issues related to budget

Regarding studies on the influence of budget on performance, non- financial performance is also widely used with a number of indicators such as job satisfaction, work positivity or work motivation Kenis (1979). However, the above indicators are not the most common ones used in non-financial performance. Therefore, the thesis will inherit and expand this scale in the correlation with budget.

Budgetary performance is the measurement of performance based on the frequency in which managers achieve assigned budget indicators (Kenis, 1979). However, the budget implementation is not used in the thesis as its indicators do not reflect in detailed the business performance in the same way other results are presented in above sections. 2.3. Theories used in the thesis

Budget, also known as the budget, is always considered a primary tool used in corporate governance. Nevertheless, the definition of budget is very diverse, with each one being different depending on the author's approach. Some popular approaches are functional approach (Argyris, 1953), systematic approach (Drury, 2000) or process approach (Horngren, 1977). In addition, in budget, a wide range of administrative functions is used including planning, activity coordination, and communication, and control, evaluation of results and creation of work motivation for employees. In studies on the impacts of budgeting on performance, the functions of budgeting are often demonstrated in a number of primary aspects which include budget goal clarity, budget goal difficulty, budgeting feedbacks, the sophistication of budgeting, budget participation, scope and frequency of budgeting.

2.2. Issues related to performance

The diversity of studies on the influence of budget on performance not only originates from the approach to the specific aspects of budgeting but also from different methods of performance's measurement. In this section, the thesis presents some popular scales of performance used in previous studies: (1) Managerial performance, (2) Financial performance, (3) Non-financial performance and (4) budgetary performance. To explain the impacts of budget on activities by SMEs in Vietnam, the thesis applied three primary theories including Agency theory, Contingency theory and Motivation theory - Goal setting theory by Locke. Specifically, agency theory is the theoretical basis to explain the influencing of budget participation on performance. The motivation theory by Locke (1990) explains the effects of the characteristics of the budget goals and budget feedbacks on the business performance. Finally, the contingency theory is the foundation for the author to supplement the performance scales, evaluate the controlling role of firm size and the mediating role of the managerial performance in the research model. Managerial performance is an indicator that reflects the application of

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2.4. Research hypotheses

BC

FP

BD

BF

Based on the research overview, the theoretical basis of budgeting and performance and the theories, the author offers seven main research hypotheses, in which hypothesis H1, H2, H3, H4, H5, H6 are specified into sub-hypotheses corresponding to the managerial performance, financial and non-financial performance of SMEs in Vietnam.

MP

FB

Table 2.3: Research hypotheses

Hypotheses Contents Origin

BS

NFP

H1 Kenis (1979)

PB

Budget goal clarity positively affects the performance of SMEs in Vietnam

Kenis (1979) H2

Groupquymo

Budget goal difficulty positively affects the performance of SMEs in Vietnam

Kenis (1979) H3 Source: The author Budgeting feedbacks positively affects the performance of SMEs in Vietnam Diagram 2.3: Research model

H4 The scope and frequency of budgeting positively affect the performance of SMEs in Vietnam Wijewardena and De Zoysa (2001)

In which - BC (Budget goal Clarity): Clear budget objectives - BD (Budget goal Difficulty): Budget objectives' degree of difficulty - BF (Budgetary Feedback): Budgeting feedbacks - FB (Scope and Frequency of Budget): The scope and usage frequency H5 Merchant (1981) of budgeting The budget sophistication positively affects the performance of SMEs in Vietnam

H6 Budget participation negatively affects the performance of SMEs in Vietnam Young (1985) and Lu (2011)

H7 Mihaela (2010) Budgeting indirectly affects the business performance of SMEs in Vietnam through managerial performance - BS (Budget Sophistication): Budgeting sophistication - PB (Participation Budget): Budget participation - MP (Managerial Performance): Managerial performance - FP (Financial Performance): Financial performance - NFP (Non-Financial Performance): Non-Financial performance - Groupquymo: Firm size Source: The author 2.5. Research model Based on research hypotheses summarized in Table 2.3, the author proposed the research model as follows:

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CHAPTER 3 METHODOLOGY

stage of building the draft scale and questionnaire. The results of qualitative research are the premise for quantitative research in the last two stages which are preliminary research and official research. Specifically, qualitative research was implemented by the author with two phases containing (1) Evaluation of budget and its impacts on performance of SMEs in Vietnam, (2) Establishment of the draft scale and questionnaire. 3.3. Preliminary quantitative research On the basis of research hypotheses and the research model proposed in Chapter 2, Chapter 3 will present in detail the research process and methodology. Specifically, the chapter includes Research Process, Qualitative Research and Quantitative Research. 3.1. Research process

The research process can be divided into four primary stages including theoretical review, establishment of the draft scale, preliminary research and official research.

Nghiên cứu định tính Qualitative research

Identify: Research scope, variables, research hypotheses and research model

Based on the results of qualitative research, preliminary quantitative research was conducted to assess the reliability of the draft scale system before proposing the official scale and questionnaire. The preliminary quantitative research was conducted from April 2019 to May 2019 with a temporary questionnaire for the sample of 122 directors and chief accountants in SMEs in Vietnam. There were 100 eligible questionnaires being included in the analysis of the scale's reliability using Cronbach's Alpha coefficient. 3.4. Official quantitative research Research overview and theoretical basis 3.4.1. Sampling

Draft scale and questionnaire

Preliminary quantification (n = 100)

Cronbach's alpha EFA, CFA

Final scale and questionnaire

Cronbach's alpha

Structural equation modeling (SEM) Structural equation modeling

Based on the context of SMEs in Vietnam, the sampling was required to be based on specific regulations for this group of enterprises according to Decree No. 56/2009/ND-CP dated June 40, 2009 and Decree 49/2018/ND-CP. Specifically, the sampling method used by the author is convenient sampling through the Vietnam Association of Small and Medium Enterprises (VINASME), the Tax and Treasury Departments of the districts in Hanoi and Ho Chi Minh City. And to ensure the compliance with the analytical procedures, the minimum sample size for the official quantitative research was 220 observations. 3.4.2. Data processing

Source: The author Diagram 3.1: Research process 3.2. Qualitative research

After collecting, classifying and selecting eligible questionnaires, the author encoded, updated and processed the data using SPSS 25.0 software integrated with Amos 21.0 according to these following steps: (1) Descriptive statistics, (2) Evaluation of the reliability of the scale, (3) Exploratory factor analysis (EFA), (4) Confirmatory factor analysis (CFA) and (5) Testing of the model and the research hypotheses using Structural equation modeling (SEM) The research methods used in the thesis is a combination of quantitative and qualitative research. Specifically, qualitative research was carried out the

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CHAPTER 4 RESEARCH FINDINGS

In which, the scale of variables in the model was built on the basis of adjusted inheritance from previous studies. For example, after conducting the qualitative research, five indicators were omitted in the financial performance scale compared to the draft scale. Table 3.3: Draft scale system

No Variables Chapter 4 presents the research findings obtained from the research process and detailed descriptions of each stage and each research method. Specifically, the chapter consists of (1) Results of qualitative research in stage 1, (2) Results of qualitative research in stage 2, (3) Results of preliminary quantitative research and (4) Official quantitative research results. No of indicators Basis for the establishment of the scale 4.1. Qualitative research results 1 Budget goal clarity 3 Kenis (1979)

2 Budget goal difficulty 5 Kenis (1979)

3 The sophistication of budgeting 3 Qi (2010)

4 Budgeting feedbacks 3 Kenis (1979) . Results of qualitative research in stage 1 showed that all surveyed subjects claimed that budget is an important management tool and it affects the business performance. Respondents also stated that primary aspects of budgeting outlined in the research model positively influence on SMEs' business performance with the exception of “Budget participation". 5 4 The scope and frequency of budgeting Wijewardena and De Zoysa (2001)

6 Budget participation 6 Milani (1975)

7 Managerial performance 8 Mahoney (1963) Results of qualitative research in stage 2 were able to resolve problems occurring when converting the language from the scale in the original research as five indicators of financial performance were removed of financial results to simplify the questionnaire and limit the phenomenon of refusing to reply. 4.2. Quantitative research results 8 Financial performance 8 Wijewardena and Dezoysa (2001), Agbenyo (2018)

9 Non-financial performance 3 Kenis (1979), Fagbemi (2013), Kotane (2015) Preliminary quantitative research results discovered that all the variables ensure the reliability of the scale except the observed index FB4 (the scope of using budget variance) which was excluded from the variable named "the scope and frequency of budgeting”.

10 Firm size 1 Author developed based on research by Qi (2010) Source: The author To facilitate the data synthesis, the variables were also encoded according Official quantitative results were demonstrated with the following basic contents including descriptive statistics, evaluation of the reliability of the scale, exploratory factor analysis (EFA), confirmatory factor analysis (CFA) and testing of the model and the research hypotheses using structural equation modeling (SEM) Descriptive statistics to the abbreviated English version in the diagram 2.3 - Research model.

The author sent out 812 questionnaires, collected 427 questionnaires and only 266 were used for the study, which equaled to a rate of 33%. Specifically, 64% of eligible responses came from micro-business managers

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4.3. Testing of direct impacts

The research hypotheses proposed by the author in the thesis were divided into two groups. The first group is hypotheses that assess direct effects of budgeting on performance of SMEs in Vietnam. They include seven hypotheses from H1 to H7 except H7a and H7b.

Table 4.11 Testing results of research hypotheses

. a t a d h c r a e s e r e h t h t i

P Budgeting Conclusion

The correlation

Hypotheses Budgeting

f o s e e r g e d 8 1 5 s a h l e d o m

MB <---

BC

0,164

***

0,249

Approve

H1a

e h t

MB <---

BF

H3a

0,032

0,501

0,049 Disapprove

t a h t

MB <---

BS

H5a

0,090

0,204

0,095 Disapprove

MB <---

FB

H4a

0,009

0,800

0,015 Disapprove

MB <---

PB

H6a

0,113

0,009

0,188

Approve

MB <---

BD

0,203

0,012

0,195

Approve

H2a

d e r e v o c s i d d o h t e m

w y c n e t s i s n o c e h t e r u s n e o t e l b a s a w

MB <--- Groupquymo

0,049

0,361

0,053 Disapprove

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l e d o m M E S e h T

FP <---

BC

0,191

0,009

0,191

Approve

H1b

d o o h i l e k i L

FP <---

BF

H3b

0,154

0,029

0,155

Approve

FP <---

BS

H5b

0,242

0,021

0,167

Approve

: 2 . 4 m a r g a i D

FP <---

FB

H4b

0,133

0,016

0,143

Approve

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PB

H6b

0,138

0,031

0,151

Approve

FP <---

BD

H2b

0,247

0,037

0,156

Approve

l e d o m

FP <---

MB

H7c

0,280

0,013

0,184

Approve

NFP <---

MB

H7d

0,263

0,033

0,165

Approve

l e d o m e h t t a h t d e t a r t s n o m e d s r o t a c i d n i y r a m

l a r u t c u r t s f o

NFP <---

BC

H1c

0,267

0,001

0,255

Approve

i r p l l

NFP <---

BF

H3c

0,165

0,034

0,158

Approve

s i s y l a n A

l a r u t c u r t s e h t f o n o i t a u l a v E

NFP <---

BS

H5c

-0,114

0,319

-0,075 Disapprove

m o d e e r f

22 21

The correlation

Hypotheses Budgeting

P Budgeting Conclusion

Standardized Indirect Effects - Two Tailed Significance (BC) (Group No. 1 - Default model)

NFP <---

FB

0,172

0,005

0,177

Approve

H4c

Groupquymo BS FB BC BF BD PB MB NFP FP

NFP <---

PB

0,149

0,035

0,156

Approve

H6c

MP ... ... ... ... ... ... ... ... ... ...

NFP <---

BD

0,260

0,046

0,158

Approve

H2c

NFP 0,25 0,097 0,604 0,087 0,387 0,028 0,058 ... ... ...

FP <--- Groupquymo

0,157

0,044

0,112

Approve

FP 0,274 0,106 0,708 0,008 0,514 0,006 0,024 ... ... ...

NFP <--- Groupquymo

0,029

0,735

0,020 Disapprove

Source: The author Source: The author

The results of Bootstrap 500 times with 95% confidence showed that the mediating role of MP was shown when evaluating the impacts of BD on NFP and MP also increased the influence of BC, BD and PB on FP.

It can be seen from table 4.11 that only hypotheses H1, H2, H6 were fully approved with p - value <0.05. In which, hypothesis H6 related to the impacts of budget participation on performance of SMEs in Vietnam was accepted, but the direction of impacts was opposite to the original hypothesis. Hypotheses H3, H4, and H5 were approved in only a number of detailed hypotheses according to each type of performance. H7c and H7d were approved which proves that "Managerial performance" has the positive correlation with "Financial performance" and "Non-financial performance" of SMEs in Vietnam. The testing results in Table 4.11 and Appendix 9 also showed that the larger the enterprise is, the greater the financial performance and the influence of some characteristics of budget on performance of SMEs in Vietnam are. 4.4. Testing of indirect impacts

Hypotheses H7a, H7b on the variable named meditating role of managerial performance in the research model were tested through evaluating the indirect effects of budgeting on business performance of SMEs in Vietnam. Table 4.12: Testing results of intermediary variables Standardized Indirect Effects (Group number 1 - Default model)

FB BC BF BD

PB MB NFP FP

Groupquymo BS

MP

0 NFP

0,009

0,016 0,003 0,041 0,008 0,032 0,031 0

0 FP

0,01

0,017 0,003 0,046 0,009 0,036 0,035 0

0

24 23

CONCLUSION CHAPTER 5 DISCUSSION AND RECOMMENDATIONS

Chapter 5 discusses the research findings obtained from each research hypothesis and the relationship with the actual operation situation of SMEs in Vietnam. Based on that, the author offers some recommendations for business managers, business associations and training institutions to improve the efficiency of budget as well as the business performance of SMEs in Vietnam. The chapter also covers the limitations of the thesis and provides some directions for future studies.

Testing results obtained from the application of SEM demonstrated that the primary characteristic of budget positively influence the performance of SMEs in Vietnam. This serves as the basis to encourage this group of enterprises to increase the application of budgeting in real operations. Concurrently, the research findings also emphasized the role of firm size and the managerial performance in the research model. Specifically, firm size plays a role in controlling financial performance and moderating the influence of characteristic of budget on the performance of SMEs in Vietnam. Meanwhile, managerial performance has positive impacts on the financial and non-financial performance of the company and also plays an mediating role in the relationship with the budget.

Based on the research findings, the thesis offered various specific recommendations for managers to improve the efficiency in using budgeting as well as the business performance of SMEs in Vietnam. Also, the study also emphasized the role of business associations and training institutions in improving the efficiency of using budgeting in particular and the general governance tools in the context of Vietnam's integration into the world. In terms of theoretical aspects, compared to previous studies, the thesis discovered more impacts of budget on performance in the new context of SMEs in Vietnam, added a new scale of financial and non-financial performance and evaluated the mediating role of managerial performance in the relationship between budgeting and the business performance of SMEs in Vietnam.

Finally, the author presents the thesis's shortcomings so they can be served as a premise for future studies in the direction of modifying the research context, the scale of variables related performance and adding contingency factors into the research model.