Bui Ngoc Tan and Le Duc Niem, Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak Province, Vietnam (2023)

Summary

A study by Bui Ngoc Tan and Le Duc Niem of Tay Nguyen University, Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak Province, Vietnam, published in the International Journal of Professional Business Review, Vol. 8, No. 11, 2023, pages 01–17 (e03134, DOI 10.26668/businessreview/2023.v8i11.3134). The authors apply the entrepreneurial ecosystem model of Isenberg (2011) to a survey of 206 entrepreneurs from 2018 and 2020 startup contests in Dak Lak province, including 108 in community-based tourism. They find that only the finance component (micro-credit, loans, debt refinancing funds and market liquidity) and the culture component (risk tolerance, failure acceptance and ambition) helped early-stage tourism businesses stay afloat.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Cite this document

“Bui Ngoc Tan and Le Duc Niem, Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak Province, Vietnam (2023).” Original at openaccessojs.com. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/bui-ngoc-tan-and-le-duc-niem-entrepreneurial-ecosystem-and-tourism-fir-953ca4c030/, SHA-256 517b23bd4d20c874641378aa8c465d44c8349f778c561d497712da8b17591359.

Full text

ENTREPRENEURIAL ECOSYSTEM AND TOURISM FIRMS' SURVIVAL IN THE COVID-
19 PANDEMIC CRISIS: A CASE STUDY OF DAKLAK PROVINCE, VIETNAM

Bui Ngoc TanA, Le Duc NiemB

ARTICLE INFO ABSTRACT
Article history: Purpose: This paper aims to analyze the entrepreneurial situation during the COVID-
19 pandemic, focusing on firms in the tourism sector. Specifically, we seek to identify
Received 01 August 2023 factors that belong to the Entrepreneurial Ecosystem (EE) of Dak Lak province,
supporting entrepreneurial firms' survival during the COVID-19 pandemic.
Accepted 02 November 2023 Theoretical framework: We applied the EE model developed by Isenberg (2011) to
the province of Dak Lak, where we analyzed the effects of EE on the ability of new
Keywords: businesses in the community-based tourism sector to withstand the impact of the
COVID-19 pandemic.
Entrepreneurial Ecosystems;
COVID-19; Design/methodology/approach: We conducted a survey of 206 entrepreneurs, of
Survivals. whom 108 are entrepreneurs in the tourism sector or communities-based tourist
destinations. These surveyed entrepreneurs participated in two startup contests the
Dak Lak Province organized in 2018 and 2020.

Findings: It was found that the COVID-19 pandemic particularly devastated small
businesses in the travel and tourism sector. In addition, only two components of EE
provide relief to these companies: FINANCE and CULTURE. Without a doubt,
microcredit, loans, and debt refinancing funds, as well as the general liquidity of the
financial market, help young businesses stay afloat. Additionally, the community's
culture of risk-taking, failure acceptance, success-seeking, and lofty aspirations
underpins their attempt to keep the business afloat during difficult times.

Research, Practical & Social implications: We suggested that Dak Lak province
develop its EE by upgrading its elements as soon as possible to cope with future crises.

Originality/value: This study gives a new direction on the specific approach to
improve the EE of a province of Vietnam and shows ways for better performance of
the EE.

Conclusion: We found that FINANCE and CULTURE components play a positive
role in assisting early-stage tourism firms. Specifically, the availability and
accessibility of the financial market, including micro-credit, support entrepreneurial
firms in maintaining their operation. In addition, the culture of tolerance of risks and
failure, efforts for success, and high ambition is the basis for the action of
entrepreneurs to continue their businesses.

Doi: https://doi.org/10.26668/businessreview/2023.v8i11.3134

A
Master in Business Administration. Faculty of Economics, Tay Nguyen University. Vietnam.
E-mail: bntan@ttn.edu.vn Orcid: https://orcid.org/0009-0008-8143-587X
B
PhD in Economics. Faculty of Economics, Tay Nguyen University. Vietnam.
E-mail: ldniem@ttn.edu.vn Orcid: https://orcid.org/0000-0003-0629-9026

Intern. Journal of Profess. Bus. Review. |Miami, v. 8 | n. 11| p. 01-17 | e03134 | 2023.
1
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

ECOSSISTEMA EMPRESARIAL E SOBREVIVÊNCIA DE EMPRESAS DE TURISMO NA CRISE DA
PANDEMIA DA COVID-19: UM ESTUDO DE CASO DA PROVÍNCIA DE DAKLAK, VIETNÃ

RESUMO
Objetivo: O presente documento tem como objetivo analisar a situação empresarial durante a pandemia da Covid-
19, concentrando-se em empresas do setor do turismo. Especificamente, buscamos identificar fatores que
pertencem ao Ecossistema Empreendedor (EE) da província de Dak Lak, apoiando a sobrevivência de empresas
empreendedoras durante a pandemia da Covid-19.
Quadro teórico: aplicamos o modelo EE desenvolvido por Isenberg (2011) à província de Dak Lak, onde
analisamos os efeitos da EE na capacidade de novas empresas do setor turístico comunitário para suportar o
impacto da pandemia da Covid-19.
Design/Metodologia/Abordagem: Realizamos um levantamento de 206 empreendedores, dos quais 108 são
empreendedores no setor de turismo ou destinos turísticos baseados em comunidades. Esses empreendedores
pesquisados participaram de dois concursos de start-ups organizados pela Província de Dak Lak em 2018 e 2020.
Constatações: Constatou-se que a pandemia da Covid-19 devastou particularmente pequenas empresas no setor
de viagens e turismo. Além disso, apenas duas componentes da EE fornecem alívio a estas empresas: FINANÇAS
e CULTURA. Sem dúvida, o microcrédito, os empréstimos e os fundos de refinanciamento da dívida, bem como
a liquidez geral do mercado financeiro, ajudam as empresas jovens a manter-se em atividade. Além disso, a cultura
da comunidade de assumir riscos, aceitação de falhas, busca de sucesso e aspirações elevadas sustenta sua tentativa
de manter os negócios em atividade durante tempos difíceis.
Investigação, Implicações práticas e Sociais: sugerimos que a província de Dak Lak desenvolvesse a sua EE,
atualizando os seus elementos o mais rapidamente possível para lidar com futuras crises.
Originalidade/Valor: Este estudo dá uma nova orientação sobre a abordagem específica para melhorar o EE de
uma província do Vietname e mostra maneiras de melhorar o desempenho do EE.
Conclusão: O Tribunal constatou que os componentes FINANCEIROS e CULTURAIS desempenham um papel
positivo na assistência às empresas de turismo em fase inicial. Concretamente, a disponibilidade e a acessibilidade
do mercado financeiro, incluindo o microcrédito, ajudam as empresas empresariais a manter o seu funcionamento.
Além disso, a cultura de tolerância aos riscos e ao fracasso, os esforços para o sucesso e a alta ambição são a base
para a ação dos empresários para continuar seus negócios.

Palavras-chave: Ecossistemas Empresariais, COVID-19, Sobrevivências.

LA SUPERVIVENCIA DE EMPRESAS TURÍSTICAS Y ECOSISTEMAS EMPRESARIALES EN LA
CRISIS DE LA PANDEMIA DE COVID-19: UN ESTUDIO DE CASO DE LA PROVINCIA DE
DAKLAK (VIETNAM)

RESUMEN
Objetivo: Este trabajo tiene como objetivo analizar la situación empresarial durante la pandemia de COVID-19,
centrándose en las empresas del sector turístico. Específicamente, buscamos identificar los factores que pertenecen
al Ecosistema Empresarial (EE) de la provincia de Dak Lak, apoyando la supervivencia de las empresas
emprendedoras durante la pandemia de COVID-19.
Marco teórico: Aplicamos el modelo EE desarrollado por Isenberg (2011) a la provincia de Dak Lak, donde
analizamos los efectos de EE en la capacidad de las nuevas empresas del sector turístico comunitario para resistir
el impacto de la pandemia de COVID-19.
Diseño/Metodología/Enfoque: Realizamos una encuesta a 206 empresarios, de los cuales 108 son empresarios
del sector turístico o de destinos turísticos de base comunitaria. Estos empresarios encuestados participaron en dos
concursos de emprendimientos que la provincia de Dak Lak organizó en 2018 y 2020.
Conclusiones: Se constató que la pandemia de COVID-19 devastó especialmente a las pequeñas empresas del
sector de los viajes y el turismo. Además, solo dos componentes de EE proporcionan alivio a estas empresas:
FINANZAS y CULTURA. Sin duda, el microcrédito, los préstamos y los fondos de refinanciamiento de deuda,
así como la liquidez general del mercado financiero, ayudan a las empresas jóvenes a mantenerse a flote. Además,
la cultura de toma de riesgos, aceptación del fracaso, búsqueda de éxito y elevadas aspiraciones de la comunidad
apuntala su intento de mantener el negocio a flote en tiempos difíciles.
Investigación, Implicaciones prácticas y Sociales: Sugerimos que la provincia de Dak Lak desarrolle su EE
actualizando sus elementos lo antes posible para hacer frente a futuras crisis.
Originalidad/Valor: Este estudio da una nueva dirección sobre el enfoque específico para mejorar la EE de una
provincia de Vietnam y muestra maneras de un mejor rendimiento de la EE.
Conclusión: Se encontró que los componentes de FINANZAS y CULTURA juegan un papel positivo en la
asistencia a las empresas turísticas en etapa temprana. Concretamente, la disponibilidad y accesibilidad del

Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
2
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

mercado financiero, incluido el microcrédito, ayudan a las empresas a mantener su actividad. Además, la cultura
de tolerancia a los riesgos y el fracaso, los esfuerzos por el éxito y la gran ambición es la base de la acción de los
empresarios para continuar con sus negocios.

Palabras clave: Ecosistemas Empresariales, COVID-19, Supervivencia.

INTRODUCTION
Because entrepreneurship is fraught with risk and uncertainty, it is regarded as the most
significant output of an entrepreneurial ecosystem (EE) (Stam and Spigel, 2016). Based on their
assessments, entrepreneurs put their ideas into action by generating goods, services, and
employment opportunities for the community. On the other hand, crises frequently happen
unexpectedly and cause issues for businesses, particularly those in the early stages.
Entrepreneurial firms typically fail for various reasons, but the main ones are lack of
experience, capital, and other production-related issues combined with a smaller market.
Therefore, the outcomes of entrepreneurial continuation depend on various factors in an EE in
addition to the entrepreneurs' skills.
EE building is a popular movement that has been started in Vietnam for decades.
Governments have identified national and regional EEs thriving as the backbones upon which
innovations and new business models can be built and maintained. This trend has caught on at
the local level nationwide, inspiring new businesses and revitalizing local economies. The
documents of the Communist Party of Vietnam's XII and XIII Congresses (2016, 2021) affirm
that the private economy is a vital driving force in Vietnam's socialist-oriented market
economy. The EE is the answer to promoting entrepreneurship in Vietnam. Dak Lak province
(2018) issued Plan No. 2272/KH-UBND to support innovative and entrepreneurial businesses.
The primary goals of this plan are to promote the development of the provincial EE and boost
entrepreneurial activities based on the exploitation of intangible assets and 4.0 Revolution
opportunities that contribute to job creation, labor productivity, and product quality to achieve
long-term growth. As a result, considerable effort has been expended to improve the provincial
EE. However, Thao (2020) accessed the EE of Dak Lak province and classified it at an early
stage.
From 2019 to 2022, Vietnam experienced a prolonged COVID-19 epidemic. It has
resulted in 11 million confirmed COVID-19 cases (the most in Southeast Asia and the 13th in
the world) and 43 thousand deaths. According to the Vietnamese Ministry of Health, the actual
number of cases could be four to five times higher (OWID, 2022; VTC Now, 2021). Its
complicated nationwide developments affected all aspects of the socio-economic system due to
Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
3
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

pandemic control measures such as physical distancings or lockdowns. Companies have been
rapidly reorganizing production, digital transformation, and changing business methods to
adapt to the epidemic to deal with it.
The tourism sector of Vietnam was heavily affected by the pandemic. From 2019 to
2021, the Vietnamese tourism industry has witnessed an unprecedented labor crisis. According
to the Ministry of Culture, Sports, and Tourism statistics, more than 300 international travel
companies had to request permit recalls, and 90% of travel businesses had to close. In 2020,
travel companies had to reduce their workforce by 70-80%. The COVID-19 pandemic has also
significantly affected the recruitment efforts of tourism-related training institutions, causing
difficulties in enrollment and resulting in a labor shortage for the tourism industry after
recovery. Tourism, hotel, and travel companies have reported that the current workforce can
only meet 50-60% of market demand (Nguyen Thi Thu, 2022).
This paper aims to analyze the entrepreneurial situation during the COVID-19
pandemic, focusing on firms in the tourism sector. Specifically, we seek to identify factors that
belong to the EE of Dak Lak province supporting the survival of entrepreneurial firms during
the COVID-19 pandemic. We analyze the provincial EE elements' role based on the model
Isenberg (2011) with a survey of 206 entrepreneurs, of whom 108 are entrepreneurs in the
tourism sector or communities-based tourist destinations. These surveyed entrepreneurs
participated in two contests the Dak Lak Province organized in 2018 and 2020.

LITERATURE REVIEW
Determinants of Business Survival
Numerous studies looked into elements that increased a company's chance of surviving,
particularly in times of crisis. Business processes are highly productive and efficient, as noted
by Cefis and Marsili (2006), Shiferaw (2009), Cefis and Marsili (2012), Ejermo and Xiao
(2014), and Zhao and Burt (2018). They claimed that more efficient companies would be more
likely to stay in business. In order to maintain these businesses, internal factors are crucial.
According to Bruderl et al. (1992), managers with excellent experience significantly increase
their firms' productivity, which lowers the likelihood of failure. Thus, it is likely that young
entrepreneurial firms experience a crisis that is more severe than that experienced by established
ones. According to Belda and Cabrer's (2018) research, past survival in trying circumstances is
strongly correlated with prior experience. The ownership structure affects whether or not
business operations will continue. Companies with two or more entrepreneurs fare better in

Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
4
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

terms of longevity (Irastorza, 2006; Arribas and Vila, 2007). Entrepreneurial genders and the
likelihood of a business failing are closely related. Women business owners' survival rate is
lower than men's (Boyer and Blazy, 2014; Kato and Honjo, 2015).
Several works draw attention to various external factors that are beneficial to businesses.
They emphasized the part played by the EE. The EE is a newly developed concept that refers
to the interactions between living things and their environments using language from the
biological sciences (Aldrich, 1990). The first person to use this phrase to describe the shifting
business environment was Moore (1993), a business advisor for Harvard Business Review. He
argued that companies don't develop in isolation. They develop through interaction with
vendors, financial institutions, and clients.
Consequently, these elements have a direct impact on entrepreneurship as well. Porter
(1990) argues that knowledge spillovers spark progress in geographically concentrated
industries. Therefore, technological externalities develop within the sector, and regional
specialization is crucial to maintaining business operations. According to Muldoon et al.
(2018), EEs must provide resources to all neighborhood startups and established entrepreneurial
businesses. An EE tends to produce the resources required for new venture development
(Muldoon et al., 2018). An EE, however, is a dynamic system, so it depends on a variety of
factors in order to survive. For instance, the COVID-19 pandemic caused actors along supply
chains for companies to be hampered by security measures like physical seclusion and social
lockdown. Because they have fewer resources, new and small businesses are more susceptible
to this type of crisis. In addition, they operate on limited cash reserves and do not have savings
to help them survive difficult situations (Shankar, 2020). Budhwar and Cumming (2020) argued
that developed EE, via their elements, allows entrepreneurs to go through hardship. As an
element of an EE, government support (such as COVID-19 loans, debt relief, and grants) was
considered an effective measure to enhance entrepreneurs' ability to cope with the COVID-19
crisis to continue operating and paying their employees (OECD, 2021). Rukumnuaykit (2022)
examined how COVID-19 affected Thailand's travel and tourism industry. He discovered that
most businesses experienced a decline in revenues due to the pandemic, and they made efforts
to survive by cutting hours worked and wages. If specific EE components work correctly, this
situation might be less stressful. Additionally, he recommended that the conventional business
model be modified to accommodate tourists' needs in light of their new post-COVID lifestyles.

Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
5
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

Questionnaire Design

Figure 1. Six components and elements of an EE

Source: Isenberg, 2011

Focus Group Discussion: The EE of Dak Lak is still in its early stages (Thao, 2020).
Consequently, when we compare them to Isenberg (2011), some components are missing. We
conducted a focus group discussion (FGD) to glean available elements of the EE in order to
avoid posing questions about non-existent aspects of the EE. To discuss and create a list of the
current EE components, we gathered a group of 14 entrepreneurs from Buon Ma Thuot City,
13 administrative districts, and other areas. In Table 1, we provided these EE (items) elements
that were derived from the FGD.

Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
6
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

Table 1: Results of FGD and questionnaire design
EE elements Designed Items Denoted
POLICY (1)
Unequivocal support The local government strongly supports P1
entrepreneurs.
Entrepreneurship Strategy The provincial entrepreneurial strategy is very P2
supportive of entrepreneurs.
Financial support for R&D The government financially supports R&D in early- P3
stage businesses
Regulatory Framework incentives Entrepreneurial businesses can receive tax benefits P4
MARKET (2)
Expertise in productizing/ Early adopters There are enough early adopter customers for M1
for proof of concept minimum viable products.
Distribution channels It is easy to build a distribution channel for minimum- M2
viable products
Entrepreneur's network The provincial business associations significantly M3
support entrepreneurial businesses.
HUMAN CAPITAL (3)
Skilled and unskilled Entrepreneurs can find suitable laborers for their H1
businesses
Serial entrepreneur You have a lot of experience in starting a business. H2
General degrees Your education is high H3
Specific entrepreneurship You are well-trained for entrepreneurship H4
training
SUPPORTS (6)
Telecommunications You have internet and can employ it very well. S1
Transportation & logistics Logistics is excellent in your location S2
Technical experts, advisors You can quickly find technical experts and advisors S3
in case needed.
Business plan contests The entrepreneurial contests were beneficial for me in S4
starting a business
Entrepreneur-friendly associations It is very beneficial for you to join Entrepreneurial S5
associations
CULTURE (5)
Visible success Visible successes strongly encourage you to start your C1
business
Tolerance of risk, mistakes, failure You think people in your community are very tolerant C2
of risk and failure.
Social status of the entrepreneur Your community highly appreciates entrepreneurs C3
Ambition, drive, hunger You do think people in your community have a high C4
ambition
FINANCE (4)
Micro-loans It is easy for entrepreneurs to access micro-credit F1
funds in your location
Capital markets It is easy for entrepreneurs to access formal capital F2
markets
Debts It is easy for entrepreneurs to refinance debts F3
Source: FGD outputs

The EE model of Isenberg (2011) consists of six components. The first Component is
POLICY. The long-term commitment of support by the government, local leaders, and
community leaders enhances the ability to sustain entrepreneurial activities. The second
Component is MARKET, the characteristics of the market where entrepreneurial firms operate,
particularly potential customers or market growth. The third Component is HUMAN CAPITAL

Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
7
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

(labor and educational institutions), which is essential for developing an EE because businesses
forming and operating require good human resources and a sufficient supply of laborers. The
fourth Component is FINANCE, which consists of credit and financial markets. The fifth
Component is CULTURE. It involves a culture of community engagement, risk-taking,
acceptance of failure, and an ethos that values entrepreneurs. The sixth Component is
SUPPORT. It relates to support for entrepreneurs from Government, NGOs, and industry
leaders.

Data Collection
Entrepreneurs will discuss the existing elements of Dak Lak's EE. This qualitative
information is integrated and compared with features proposed by Isenberg (2011). For the
FGD, we selected 14 winners in the entrepreneurial competitions in 2018 and 2020 in 13
districts and Buon Ma Thuot City to form the group.
Based on the list of entrepreneurs participating in entrepreneurial competitions in 2018
and 2020 in Dak Lak province (including district-level competitions), we sent a structured
questionnaire (Google Form). We employed a Likert scale of 1 to 5 to measure the EE's
elements and other factors backing the survival of entrepreneurial firms. The questionnaire
included structured questions. The answering options for each question are: (1) Strongly
disagree, (2) Disagree, (3) Neutral, (4) Agree, and (5) Strongly agree. After removing irrelevant
answers, we have a sample size of 206 entrepreneurs. The contents of the questionnaire are in
Table 1.

RESEARCH METHODOLOGY
Hypothesis
H1 to H6 hypothesize the relationship between our six essential components derived
from Isenberg (2011) and the survival of entrepreneurial firms. These components are all
assumed to be positively related to the probability that the correspondent business remains in
operation. For this reason, elements of these components were evaluated by entrepreneurs in
the survey (see Table 1). Thus, the six hypotheses are as follows:
Hypothesis 1 (H1): The POLICY component of the Dak Lak EE raises the likelihood
that an entrepreneurial business will continue to operate.
Hypothesis 2 (H2): The MARKET component of the Dak Lak EE increases the
probability that an entrepreneurial business remains in operation.

Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
8
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

Hypothesis 3 (H3): The HUMAN CAPITAL component of the Dak Lak EE increases
the probability that an entrepreneurial business remains in operation.
Hypothesis 4 (H4): The FINANCE component of the Dak Lak EE increases the
probability that an entrepreneurial business remains in operation.
Hypothesis 5 (H5): The CULTURE component of the Dak Lak EE increases the
probability that an entrepreneurial business remains in operation.
Hypothesis 6 (H6) The SUPPORT component of the Dak Lak EE increases the
probability that an entrepreneurial business remains in operation.

Analytic Methods
We analyzed the role of the Dak Lak EE in two steps. In the first step, we use
Exploratory Factor Analysis (EFA) to identify factors of the Dak Lak EE to improve the
survivability of firms. In the second step, we use Binary Logistic Regression to estimate the
impact of these factors on the likelihood of a business's survival. Specifically, the logistic
regression model is written as follows:

𝑃(𝑌=1|𝐷,𝑍,𝑋) 3 6
= 𝑒 (𝛼0 +∑𝑖=1 𝛼𝑖 𝐷𝑖 +𝛾1 𝑍1 +∑𝑗=1 𝛽𝑗𝑋𝑗+𝑒) (1)
1−𝑃(𝑌=1|𝐷,𝑍,𝑋)

̅̅̅̅ are dummy variables (ethnicity, gender, and age). The COVID-
In equation (1), 𝐷𝑖 , 𝑖 = 1,3
19 impact is denoted 𝑍1 (measuring the negative impact of the COVID-19 pandemic on business
activities). 𝑋𝑗 , 𝑗 = ̅̅̅̅
1,6 : variables represent the Dak Lak EE's elements, and 𝑒 is random errors.
Taking the logarithm of (1), we have:

𝐿𝑜𝑔𝑖𝑡 𝑃(𝑋) = 𝛽0 + ∑3𝑖=1 𝛼𝑖 𝐷𝑖 + 𝛾1 𝑍1 + ∑6𝑗=1 𝛽𝑗 𝑋𝑗 + 𝑒 (2)

RESULTS AND DISCUSSION
Characteristics of Entrepreneurial Firms in Dak Lak Province
Services related to tourism, agriculture, and the processing industry are the main focus
areas for entrepreneurial business activities. Mainly, when the COVID-19 pandemic in Vietnam
was under control, business activities in Dak Lak were very active. Table 2 displays the traits
of entrepreneurial businesses.
Table 2 shows that most entrepreneurs are of majority (Kinh, Thai, or Tay), accounting
for over 70% of entrepreneurs, and only 30% belong to groups of ethnic minorities. Most

Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
9
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

business owners are over 20, accounting for 63.1%. Regarding education, up to 57% of
entrepreneurs have a high school graduation or higher. More than 90% of entrepreneurial
activities are related to agriculture, agricultural processing, and services and trading related to
tourism. The entrepreneurial capital scale, however, is relatively small. The equity size of up to
nearly 70% of entrepreneurial businesses is less than 50 million VND.
The COVID-19 pandemic harmed the Vietnamese economy from 2018 to 2022. By June
2022, up to 74 percent of entrepreneurial firms in Dak Lak province had closed their doors,
with only 23 percent planning to reopen.

Table 2. Features of entrepreneurial businesses in Dak Lak Province
Amount Percentages
No. Characterítics
(people, basis) (%)
I. Ethnicity
1 Kinh, Thai, and Tay 146 70.9
2 Minority 60 29.1
Total 206 100
II. Gender
1 Female 146 70.9
2 Male 60 29.1
Total 206 100
III. Age
1 Under 20 years old 76 36.9
2 Ages 21 or above 130 63.1
Total 206 100
IV. Education
1 Not graduated from high school 89 43.2
2 Graduated from High school or higher 117 56.8
Total 206 100
V. Entrepreneurial career
1 Agriculture 86 41.7
2 Agri-product processing 8 3.9
Trading and services in tourism
3 95 46.1
community-based destinations
4 Tourism 13 6.3
5 Light Industry 4 2
Total 206 100
VI. Capital size
1 Less than 50 million VND 143 69.4
2 Over 50 million VND 63 30.6
Total 206 100
Source: Survey data

Reliability and Exploratory Factor Analysis
We calculated Cronbach's alpha as a measure of internal consistency or a standard of
scale reliability. Hair et al. (2009), Pallant (2001), and Nunnally and Bernstein (1994) suggested
that a scale that ensures unidirectionality and reliability should reach a Cronbach's Alpha
threshold of 0.7 or higher. However, given the nature of a preliminary exploratory study, a

Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
10
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

Cronbach's Alpha threshold of 0.6 is acceptable. In this study, we selected Cronbach's alpha of
more than 0.6 and the corrected item-total correlation of more than 0.3.
Table 3 shows that all items of the MARKET construct do not meet the reliability
requirements (Cronbach's alpha: 0.280; corrected item-total correlation <0.3). Thus, they were
excluded from EFA because they are not unidirectional. These items are bolded as presented in
Table 3.

Table 3. Reliability testing results
Items Corrected Item- Cronbach's Alpha Items Corrected Item- Cronbach's Alpha
Total Correlation if Item Deleted Total Correlation if Item Deleted
POLICY (1): Cronbach's Alpha: 0.665 SUPPORT (6): Cronbach's Alpha: 0.715
P1 .519 .546 S1 .478 .665
P2 .332 .680 S2 .400 .697
P3 .387 .636 S3 .593 .619
P4 .576 .520 S4 .475 .666
MARKET (2): Cronbach's Alpha: 0.280 S5 .431 .685
M1 .110 .329 CULTURE (5): Cronbach's Alpha: 0.700
M2 .243 .055 C1 .520 .619
M3 .131 .254 C2 .398 .689
HUMAN C. (3): Cronbach's Alpha: 0.751 C3 .610 .551
H1 .627 .650 C4 .427 .674
H2 .517 .710 FINANCE (4): Cronbach's Alpha: 0.700
H3 .515 .711 F1 .535 .739
H4 .532 .701 F2 .616 .649
F3 .621 .642
Source: Reliability testing outputs

We followed Hair et al. (2009) to check if the data suited EFA. We selected factors with
Eigenvalue ≥ 1 and used them in the analytical model. The EFA resulted in the KMO coefficient
(Kaiser-Meyer-Olkin) being 0.768 (KMO should be 0.5 ≤ KMO ≤ 1). Bartlett's test (Bartlett's
test of sphericity) is significantly tested (Sig Bartlett's Test <0.00). The Total Variance
Explained is 62.4% (≥ 50%), and the absolute value of the factor loading coefficient is more
significant than 0.5. Thus, it implies that EFA techniques are reasonable in this study.

Table 4. Rotated Component Matrix
Items Component Component Component Component
(1) (2) (3) (4)
Renamed
FINANCE CULTURE GOV4.0 INFRAS
F3 .833
F2 .823
F1 .679
C3 .787
C4 .719
C1 .708
C2 .551
P1 .742

Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
11
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

P4 .735
S1 .615
H3 .592
S2 .859
S3 .717
Source: EFA outputs

Items S4, S5, H1, H2, H4, P2, and P3 were dropped out of the EFA because their loading
coefficients were insignificant. The Rotated Component Matrix by the orthogonal method
(varimax) is presented in Table 4. It is worth noting that the factor loading coefficients of all
items are more extensive than 0.5. Additionally, we found four components whose items are
arranged differently than the original theoretical model. Based on the questions corresponding
to columns "component (3)" and "component (4)", we named component (3) "GOV4.0"
(government and 4.0 technology) and component (4) "INFRAS" (infrastructure) (see Table 4).

Logistic Regression Analysis
In light of the findings of the EFA and the information provided by Model (2), we
develop a binary logistic regression model with the help of the variables detailed in Table 5.
The outcomes of the regression are presented in Table 6.
We do not have sufficient evidence to support the hypothesis that age, ethnicity, and
gender influence the likelihood of a company surviving. As a result, businesses were negatively
impacted by the COVID-19 pandemic, regardless of the characteristics of their owners. The
pandemic caused by COVID-19 is the primary factor that leads business owners to close their
doors. It significantly impacted the viability of businesses run by entrepreneurs, with a
regression coefficient of -1.01 and an odd ratio of 0.364, respectively. This finding lends
credence to the hypothesis that the COVID-19 pandemic is the primary factor contributing to
the failure of businesses in Dak Lak province of Vietnam. Companies in the tourism sector
fared even worse during the pandemic, as their revenues plummeted. A coefficient of -6.27 is
assigned to the TOURISM dummy variable.

Table 5. Dependent and independent variables in binary logistics model
Ex.
Variables Descriptions Type
Sign
Dependent Variable
Y 1, if the entrepreneurial business is continuing; 0, otherwise Binary
Independent Variables
1, if the correspondent belongs to a majority ethnic group
ETHNICITY Dummy +/-
(Kinh, Thai, or Tay ethnicity; 0, otherwise
AGE 1, if the entrepreneur is over 35; 0, otherwise Dummy +/-
GENDER 1, if the entrepreneur is male; 0, otherwise Dummy +/-

Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
12
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

COVID19 the negative impact of COVID-19 Discrete -
1, if the entrepreneurial firm operates in tourism or trading or
TOURISM Dummy -
services in community-based tourist destinations ; 0, otherwise
FINANCE Availability and accessibility of the financial market, ability to Cont. +
refinance debts
CULTURE tolerance of risk & failure; visible success, social status of Cont. +
entrepreneurs
GOV4.0 supporting policies and 4.0 technology Cont. +
INFRAS Logistics services and availability of experts Cont. +
FINANCE*TOURISM Interaction between FINANCE and TOURISM variables Cont. +
CULTURE*TOURISM Interaction between CULTURE and TOURISM variables Cont. +
GOV4.0*TOURISM Interaction between GOV4.0 and TOURISM variables Cont. +
INFRAS*TOURISM Interaction between INFRAS and TOURISM variables Cont. +
Source: Designed by authors based on Isenberg, 2011

It is not significant to draw the conclusion that the interaction between government
policies and 4.0 technology (GOV4.0) helps entrepreneurial firms maintain their operation during
the COVID-19 pandemic because of the role that Dak Lak EE plays, as this is not the case. This
finding lends credence to the theory that the policies of the government regarding taxes and other
forms of support do not become robust enough to guarantee the survival of businesses. During
the time period of COVID-19, business owners are required to solve the problems that they
encounter all by themselves. With a coefficient of -1.6, the government policies and 4.0
technology (represented by GOV4.0*TOURISM) decrease the likelihood of firm survival in the
tourism industry, which is the opposite of what we expected. This is because those in the tourism
industry with tertiary education (H3) and access to the internet (S1) could gather more data on
COVID-19 and predict a worsening situation. So, they boldly decided to shut down operations
before it was forced upon them.
The FINANCE component significantly contributes to the survival of entrepreneurial
firms with 95% confidence (coefficient of 0.70 and odd ratio of 2.0). Thus, credit organizations,
especially micro-credit ones, serve early-stage businesses undergoing a crisis (Items: F1, F2). In
addition, supporting firms to refinance their debts is an effective policy to help them survive (Item
F3). This finding is similar to Subashini et al. (2023). A startup's likelihood of surviving the
pandemic is greatly enhanced by cultural factors (CULTURE) at a 95% confidence level.
Unbelievably, the drive to keep their businesses going is rooted in a culture that embraces risk-
taking, failure, and high ambition (C1, C2, C3, C4). At 95% confidence, the culture lent its
strength to the tourism industry, spawning thriving businesses as CULTURE*TOURISM has a
coefficient of 2.2. This finding is consistent with the work of Althuwayb and Badawi (2023).

Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
13
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

Table 6. Impact of Factors on the viability of entrepreneurial firms in the tourism industry
Independent Variables B SE. Sig. Odd Ratio
ETHNICITY .358 .412 .385 1.430
AGE .750 .559 .180 2.117
GENDER .092 .360 .799 1.096
COVID19 -1.010*** .229 .000 .364
TOURISM -6.272* 3.367 .062 .002
FINANCE .701* .379 .064 2.015
CULTURE .046** .549 .933 1.047
GOV4.0 .509 .498 .307 1.663
INFRAS -.357 .365 .328 .700
FINANCE*TOURISM .128 .560 .819 1.137
CULTURE*TOURISM 2.262** .945 .017 9.607
GOV4.0*TOURISM -1.627** .720 .024 .197
INFRAS*TOURISM .483 .538 .370 1.621
Constant .596 2.277 .794 1.815
-2 Log-likelihood: 197.62
Cox & Snell R Square: .297
Nagelkerke R Square: .406
N 206
Note: *, **, ***: Statistical significance at the 10% , 5%, and 1% level, respectively.
Source: Regression results

We observed that our results deviated somewhat from those predicted by the model
proposed by Isanberg (2011). Other hypothesized components of the Dak Lak EE, such as
POLICY (Hypothesis 1), the MARKET (Hypothesis 2), HUMAN CAPITAL (Hypothesis 3),
and SUPPORT (Hypothesis 6), and their roles in sustaining entrepreneurial activity, remain
unclear. We cannot confidently say that these components positively affect a company's
survival ability if an entrepreneur runs it during hardship. In other words, these parts weren't
doing their jobs or were missing crucial components. Therefore, we argue that the province of
Dak Lak requires targeted policies and initiatives to foster the growth of these aspects of its EE.

CONCLUSION
This study interviewed 206 entrepreneurs in Dak Lak province, including 108 in the
tourism industry and 98 in other sectors. We looked into how the EE components affected the
survival of entrepreneurial firms during the COVID-19 pandemic (2018-2022). We discovered
that the pandemic had a negative and significant impact on the efficiency and ability of
entrepreneurial firms to remain in business. Travel restrictions, social distancing, and city
lockdowns significantly impacted early-stage companies. As a result, they are unable to face
the crisis. The pandemic harmed tourism companies even more severely. We discovered that
74% of entrepreneurial firms ceased operations, with only 26% surviving the pandemic. We
are not confident enough to assert that entrepreneur characteristics such as ethnicity, gender, or
age influence the impact of the COVID-19 pandemic on business viability.

Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
14
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

We found that FINANCE and CULTURE components play a positive role in assisting
early-stage firms in tourism. Specifically, the availability and accessibility of the financial
market, including micro-credit, support entrepreneurial firms in maintaining their operation. In
addition, the culture of tolerance of risks and failure, efforts for success, and high ambition is
the basis for the action of entrepreneurs to continue their businesses. However, the roles of
other components of the EE are very blurred. Therefore, we suggested that Dak Lak province
develop its EE by upgrading its elements as soon as possible to cope with future crises.

REFERENCES

Aldrich, H. E. (1990). Using an Ecological Perspective to Study Organizational Founding
Rates. Entrepreneurship Theory and Practice, 14 (3), 7–24. doi:10.1177/104225879001400303

Althuwayb, S. M., & Badawi, N. S. (2023). Entrepreneurial Intention of Saudi Women in the
Covid-19 Pandemic Era: The Role of Personality Traits. International Journal of Professional
Business Review, 8(6), e02211. doi:10.26668/businessreview/2023.v8i6.2211

Arribas, I., & Vila, J.E (2007). Human capital determinants of the survival of entrepreneurial
service firms in Spain. International Entrepreneurship and Management Journal 3, 309–322.
doi:10.1007/s11365-007-0038-z

Bruderl, J., Preisendorfer, P., & Ziegler, R. (1992). Survival Chances of Newly Founded.
Business Organizations. American Sociological Review, 57(2), 227-242. doi:10.2307/2096207

Belda, P. R., & Cabrer-Borrás, B. (2018). Necessity and opportunity entrepreneurs: survival
factors. International Entrepreneurship and Management Journal, 14(2), 249-264.
doi:10.1007/s11365-018- 0504-9

Boyer, T., & Blazy, R. (2014). Born to be alive? The survival of innovative and noninnovative
French micro-start-ups. Small Business Economics, 42(4), 669-683. doi:10.1007/s11187-013-
9522-8

Budhwar, P., & Cumming, D. (2020). New directions in management research and
communication: lessons from the COVID-19 pandemic. British Journal of Management, 31(3),
441-443. doi:10.1111/1467-8551.12426

Cefis, E., & Marsili, O. (2006). Survivor: The role of innovation in firms' survival. Research
Policy, 35(5), 626-641. doi:10.1016/j.respol.2006.02.006

Cefis, E., & Marsili, O. (2012). Going, going, gone. Exit forms and the innovative capabilities
of firms. Research Policy, 41(5), 795-807. doi:10.1016/j.respol.2012.01.006

Communist Party of Vietnam (2016). Political Report of the XI Party Central Committee at the
XIIth National Congress.

Communist Party of Vietnam (2021). Political Report of the XII Central Committee at the XIII
National Congress.

Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
15
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

Ejermo, O., & Xiao, J. (2014). Entrepreneurship and survival over the business cycle: how do
new technology-based firms differ?. Small Business Economics, 43, 411–426.
doi:10.1007/s11187-014-9543-y

Hair, J., Black, W., Babin, B., & Anderson, R. (2009). Multivariate Data Analysis (7th Edition
ed.): Pearson Prentice Hall.

Isenberg, D. J. (2011). The entrepreneurship ecosystem strategy as a new paradigm for
economy policy: principles for cultivating entrepreneurship. Babson Entrepreneurship
Ecosystem Project, Babson College, Babson Park: MA.

Irastorza, N. (2006). The liability of foreignness: Survival differences between foreign-and
native-owned firms in the Basque Country. Vancouver Centre of Excellence working paper
series #06-18.

Kato, M., & Honjo, Y. (2015). Entrepreneurial human capital and the survival of new firms in
high-and low-tech sectors. Journal of Evolutionary Economics, 25(5), 925-957.
doi:10.1007/s00191-015-0427-3

Moore, J. (1993). Predators and Prey: A New Ecology of Competition. Harvard Business
Review.

Muldoon, J., Bauman, A., & Lucy, C. (2018). Entrepreneurial Ecosystem: do you trust or
distrust?. Journal of Enterprising Communities: People and Places in the Global Economy, 12
(2), 158-177. doi.org/10.1108/JEC-07-2017-0050

Nunnally, J.C., & Bernstein, I.R. (1994). Psychometric theory (3rd ed.). New York: McGraw-
Hill

Nguyen Thi Thao (2020). Situation and needs of entrepreneurial enterprises, solutions and
policies to promote entrepreneurship in Dak Lak Province. Service of Science and Technology
of Dak Lak province.

OECD (2021). COVID-19 Government Financing Support Programmes for Businesses: 2021
Update.

OECD (2021). COVID-19 Government Financing Support Programmes for Businesses: 2021
Update. OECD Paris Retrieved from 'https://www.oecd.org/finance/COVID-19-Government-
FinancingSupport-Programmes-for-Businesses-2021-Update.pdf'

OWID (2022). Coronavirus Pandemic (COVID-19). Retrieved from:
'https://ourworldindata.org/coronavirus'

Pallant, J. (2001). SPSS survival manual - a step-by-step guide to data analysis using SPSS for
Windows (version 10). Buckingham: Buckingham Open University Press.

People's Committee of Dak Lak (2018). The Plan 2722/KH-UBND supports innovative
entrepreneurial businesses in Dak Lak province until 2020, oriented to 2025. Dak Lak, Viet
Nam

Porter, M. E. (1990). The competitive advantage of nations: with a new introduction. New
York: The Free Press.
Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
16
Tan, B. N., Niem, L. D. (2023)
Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak
Province, Vietnam

Rukumnuaykit, P., Pholphirul, P., & Kwanyou, A. (2022). Business Survival in Times of
COVID-19: Empirical Evidence from Tourism Enterprises in Thailand. Global Business
Review. doi:10.1177/09721509221116002

Shankar, K. (2020). The impact of COVID-19 on IT services industry - expected
transformations. British Journal of Management, 31(3), 450-452. doi:10.1111/1467-
8551.12423

Shiferaw, A. (2009). Survival of Private Sector Manufacturing Establishments in Africa: The
Role of Productivity and Ownership. In World Development, 37(3), 572-584.
doi:10.1016/j.worlddev.2008.08.004

Stam, F. C. & Spigel, B. (2016). Entrepreneurial ecosystems. USE Discussion paper series, 16,
1-18

Subashini, G., Sofia, R., Gade, S., Sadhwani, R., & Bansal, R. (2023). A Study on the
Association of Entrepreneurship Ecosystem with Financial Inclusion. International Journal of
Professional Business Review, 8(4), e01241. doi:10.26668/businessreview/2023.v8i4.1241

VTC Now (2021). Broadcasting Program on August 13, 2021: Retrieved from
'https://www.youtube.com/watch?v=LtejIGFWUqo'

Zhao, C., & Burt, R. S. (2018). A note on business survival and social network. Management
and Organization Review, 14(2), 377-394. doi:10.1017/mor.2018.12

Intern. Journal of Profess. Bus. Review. | Miami, v. 8 | n. 11 | p. 01-17 | e03134 | 2023.
17

File and source

File: tan-2023-entrepreneurial-ecosystem-and-tourism-firms-survival-in-the-covid-19-pandemic-cri.pdf
Size: 459,147 bytes
SHA-256: 517b23bd4d20c874641378aa8c465d44c8349f778c561d497712da8b17591359
Our copy: tan-2023-entrepreneurial-ecosystem-and-tourism-firms-survival-in-the-covid-19-pandemic-cri.pdf
Original: openaccessojs.com