Firm Characteristics and Its Adaptive Capacity in Response to Environmental Requirements: An Empirical Study of Vietnam’s Textile and Garment SMEs

This paper investigates the relationship between the characteristics of textile and garment small and medium sized enterprises (SMEs) in Vietnam and their adaptive capacity. A scoring method was applied to measure each firm’s adaptive capacity based on 6 criteria that measured internal capacity, strategies for adapting and the actual level of adaptation. Multiple linear regression analysis was employed to test four hypotheses which were developed based on the findings of current literature. Three out of four hypotheses are supported by the analysis, which shows a positive correlation between firm size, operation type, firm age and its adaptive capacity. The ownership type does not have a statistically significant relationship with a firm’s adaptive capacity. The results are strongly supported by qualitative results and field observations. Despite a number of limitations, the study is a first contribution to the literature providing insights on the adaptive capacity of SMEs in Vietnam’s textile and garment industry.