Estimating the capital assets of Laotian entrepreneurial families to compete in the garment industry

Abstract

PurposeThe Lao People's Democratic Republic (Lao PDR) has a socialist transition economy with a high growth rate of entrepreneurial families compared to other member states of the Association of Southeast Asian Nations (ASEAN) Economic Community. A significant challenge for entrepreneurial family growth includes vigorously seeking the capital assets necessary for their survival, due to ongoing competition. The purpose of this paper is to estimate the capital assets of Laotian entrepreneurial families require to be competitive in the garment industry.Design/methodology/approachThe study adopted a multi-stage sampling technique, with a representative sample size of 350 Laotian entrepreneurial families. The approach was a structural schedule interview at participating families home addresses between August and December 2017. The study uses a three-stage least squares (3SLS) regression model to estimate whether capital assets have a positive association with competition and was organised with the assistance of Stata 16, a software programme.FindingsThe main findings show that, using the 3SLS regression model as the instrument, the values are almost identical and fit the data well. The model shows that capital assets (human, financial, social, physical and natural) have a positive and significant relationship with competition. The study suggests that financial capital is a major determinant of the capital assets to build competitive advantage.Originality/valueTo the best of the authors' knowledge, this is the first research to estimate the capital assets of Laotian entrepreneurial families in Vientiane, Lao PDR. The findings contribute to research about existing optimal capital assets that can be used to maintain long-term competitive advantage.