VIETNAM NATIONAL UNIVERSITY, HANOI
INTERNATIONAL SCHOOL
=============
HONG TRUNG HI
THE FINANCIAL VIABILITY OF CIRCULAR
ECONOMY MODELS FOR VIETNAMESE
MANUFACTURING SMES
Program: Financial Management
Code: 8340202.01QTD
Supervisors: PhD. Nghiem Xuan Hoa
Hanoi - 2025
DECLARATION OF AUTHORSHIP
◻🕮🙣
I hereby declare that this thesis was carried out by myself under the guidance
and supervision of PhD Nghiêm Xuân Hòa; and that the work contained in it and the
results in it are true by the author and have not violated research ethics. The data and
figures presented in this thesis are for analysis, comments, and evaluations from
various resources by my own work and have been duly acknowledged in the
reference part.
In addition, other comments, reviews and data used by other authors, and
organizations have been acknowledged and explicitly cited.
I will take full responsibility for any fraud detected in my thesis.
.
ACKNOWLEDGEMENTS
I sincerely thank PhD. Nghiêm Xuân Hòa for his guidance and support, crucial to this
research. Further gratitude I want to express my appreciation the GIZ-VCCI Network
and participating SMEs for their invaluable cooperation and shared experiences. At last,
I want to thank my family, friends and colleagues for their constant encouragement.
This research would not have been possible without the collective contributions of
everyone mentioned. Thank you.
Hanoi, 10/03/2025.
Table of Contents
Chapter 1 Introduction .................................................................................................. 1
1.1.
Unsustainable manufacturing in Vietnam ......................................................... 1
1.1.1.
Environmental consequences ........................................................................... 1
1.1.2.
Need for sustainable practices ......................................................................... 1
1.2.
The rise of circular economy ............................................................................... 2
1.2.1.
Circular economy models ................................................................................ 2
1.2.2.
Potential benefits for Vietnamese manufacturing ............................................ 2
1.3.
Purpose statements ............................................................................................... 2
1.3.1.
Aim .................................................................................................................. 2
1.3.2.
Specific objectives ........................................................................................... 3
1.3.3.
Research questions ........................................................................................... 3
1.3.4.
Scope to study .................................................................................................. 3
Chapter 2 Literature review .......................................................................................... 4
2.1.
Circular economy concepts and principles ........................................................ 4
2.1.1.
Transition from linear to circular economy models ......................................... 4
2.1.2.
Benefits of circular economy for manufacturing ............................................. 9
2.2.
Financial viability of circular economy models ............................................... 15
2.2.1.
Cost-benefit analysis frameworks for circularity investments ....................... 17
2.2.2.
Financial indicators and the performance measurement ................................ 18
2.3.
Financial management practices of Vietnamese SMEs................................... 19
2.3.1.
Vietnam SMEs as an engine of growth and diversification ........................... 19
2.3.2.
Financial management in Vietnamese SMEs ................................................. 21
2.4.
Circular economy in Vietnam: current state and research ............................ 23
2.4.1.
Government policies and regulations promoting circularity in Vietnam ....... 24
2.4.2.
Existing research on circular economy implementation in Vietnamese
manufacturing .......................................................................................................... 25
2.5.
Research gap: financial viability for Vietnamese SMEs ................................. 31
Chapter 3 Research methodology ............................................................................... 37
3.1.
Research approach and design .......................................................................... 37
3.2.
Research method ................................................................................................ 38
3.2.1.
Population, sample selection, and rationale ................................................... 39
3.2.2.
Descriptive statistics ...................................................................................... 39
3.2.3.
Reliability analysis (Cronbach’s Alpha) ........................................................ 40
3.2.4.
Simple linear regression analysis ................................................................... 40
3.3.
Data collection methods and analysis technique .............................................. 41
Chapter 4 Analysis and discussion .............................................................................. 43
4.1.
Integration of findings ....................................................................................... 43
4.1.1.
Demographics ................................................................................................ 43
4.1.2.
Descriptive statistics ...................................................................................... 47
4.1.3.
Cronbach’s Alpha .......................................................................................... 48
4.2.
Regression analysis ............................................................................................. 49
4.2.1.
Regression analysis on firm characteristics on the level of circularity .......... 49
4.2.2.
Regression analysis on firm characteristics on the Financing performance .51
4.2.3.
Regression analysis on firm characteristics on the ROA performance .......... 53
4.2.4.
Regression analysis on firm characteristics on the EVA performance .......... 54
4.3.
Discussion on the findings .................................................................................. 56
4.3.1.
General discussion ......................................................................................... 56
4.3.2.
Revised conceptual frameworks and hypotheses ........................................... 57
Chapter 5 Conclusions and Recommendations .......................................................... 62
5.1.
Conclusions ......................................................................................................... 62
5.2.
Recommendations for stakeholders .................................................................. 62
5.2.1.
Recommendations for Vietnamese SMEs ..................................................... 62
5.2.2.
Recommendations for policymakers .............................................................. 63
5.2.3.
Recommendations for financial institutions .................................................. 63
5.3.
Limitations of the research ................................................................................ 64
