Determinants of Business Performance of Medicinal Plant Cooperatives in Northern Mountainous Provinces of Vietnam

Tran Thi Dien, Pham Duy Hung and Nguyen Van Thang
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Tran Thi Dien: Faculty of Economics and Business Administration, Tan Trao University, Tuyen Quang, Vietnam.
Pham Duy Hung: Tan Trao University, Tuyen Quang, Vietnam.
Nguyen Van Thang: Tan Trao University, Tuyen Quang, Vietnam.

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Abstract: Medicinal plant cooperatives contribute to rural livelihoods and the organisation of medicinal plant production in Vietnam, but evidence on the determinants of their business performance remains limited. This study examines the factors associated with business performance among 150 medicinal plant cooperatives in eight provincial clusters in the Northern Mountainous Provinces of Vietnam. Business performance is measured by Return on Sales (ROS), while nine explanatory factors cover cooperative governance, managerial capacity, market linkage, government support, product quality, technology and digital transformation, member participation, the market and production environment, and governance effectiveness. Survey data were analysed using descriptive statistics, reliability and exploratory factor analyses, and Ordinary Least Squares regression. The regression model is statistically significant (p < 0.001) and explains 38.0% of the variation in ROS after adjustment (Adjusted R² = 0.380). All nine explanatory variables have positive coefficients and are statistically significant at the 5% level or better. Governance effectiveness shows the strongest standardised association with business performance (β = 0.219), followed by managerial capacity (β = 0.204), product quality (β = 0.193), and cooperative governance (β = 0.187). The remaining factors also show positive associations of smaller magnitude. The findings indicate that strengthening governance, managerial capability, product quality, market linkages, technology adoption, and member participation may support the business performance and longer-term sustainability of medicinal plant cooperatives in Northern Vietnam.

Date: 2026-08-18
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Published in Asian Journal of Current Research, 2026, 11 (3), pp.467-478

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