Factors affecting the choice of delivery terms under Incoterms 2020 of export enterprises in Vietnam

Abstract

Due to international economic integration, import and export activities between Vietnam and other countries are increasing recently, playing an increasingly important role in the economic development of the country. Operating in the field of import and export is growing and expanding in size and stature for both businesses in the world in general and enterprises in Vietnam in particular. However, the more strongly international trade activities are promoted, the increasing number of exporters and importers, the more complicated transaction and transportation processes, leading to many problems and disputes arising related to obligations, risks and costs between the two parties - the contents are summarized in the Incoterms rules. Since then, understanding and choosing delivery terms according to Incoterms becomes even more essential, becoming effective support for businesses if appropriate and beneficial terms are selected. This improvement led to the critical need about how to choose appropriate delivery terms under Incoterms 2020 of enterprises, especially exporters in Vietnam. Many researchers from all over the world have been interested in this topic over the years. However, there are still few studies that clearly define the factors affecting the choice of delivery terms under the latest version of Incoterms (Incoterms 2020), specifically with the exporting environment of Vietnam and how to improve it. In this study, the authors have tried to study the influence of these factors on the choice of delivery terms under Incoterms 2020 in Vietnam’s export activities. The authors applied the research model of Unal and Metin (2021) in our thesis research and carried out not only by the quantitative method but also by the qualitative methods to ensure both objective and subjective views. In addition, the author team also collects opinions of export businesses in Vietnam by conducting an online survey. After 263 responses from export enterprises in Vietnam, the study identified three main factors which influence the choice of delivery terms under Incoterms 2020: Resource-Advantage (RA), Efficiency-Cost (EC), Legitimacy – Environment (LE). Then, after collecting other qualitative data from reliable sources, analyzing, discussing, the authors suggest some possible recommendations to improve the effectiveness of choosing delivery terms under Incoterms 2020 of export enterprises in Vietnam.