Study on Factors Influencing Business Growth in the Service Sector in Lao PDR

Abstract

This research aims to analyze the significance level of factors influencing business growth in the service sectors in Lao PDR, conduct Confirmatory Factors Analysis (CFA) of these factors, and explore the structural equation modeling (SEM) of business growth in the services sector in Lao PDR. This study employs a quantitative approach, using a questionnaire distributed to 373 respondents from the services sector in Lao PDR. The data were analyzed using structural equation modeling for hypothesis testing. The study finds that the importance level of factors influencing business growth in services sectors has a mean of 3.40 (SD=0.79), while competitive advantage has a mean of 3.20 (SD=0.86). The Confirmatory Factors Analysis (CFA) result for the measurement model indicates the following values: χ^2/df =2.747. χ2=21.980, GFI=0.98, AGFI=0.95, CFI=0.99, RMSEA=0.069. Hypothesis testing results show that E-Human resource management factors have a positive influence on competitive advantage, Supporting the hypothesis with a t-value of 14.70, an influence coefficient of β=0.84, and P<0.001. Competitive advantage factors positively influence business growth in the services sector in Lao PDR, supporting the hypothesis with a value of 6.14, and influence coefficient β=0.58, and P<0.001. Additionally, E-Human resource management factors positively influence business growth in the services sector in Lao PDR, Supporting the hypothesis of t-value=4.65, and influence coefficient of β =0.41, and P<0.001. The structural equation model for business growth in services sectors is a good fit, with the value of χ^2/df=2.001, χ2=42.018 (insignificant), GFI=0.98, AGFI=0.95, CFI=0.99, and RMSEA=0.052, meeting the specified criteria for structural equation model. Hypothesis testing results confirm the acceptance of two hypotheses. First, there is a positive and significant relation between E-Human resource management and Competitive advantage, with R2=0.70. Second, the results show a positive relationship between E-Human resource management, Competitive advantage, and business growth, with R2=0.9.