the Creative Commons Attribution 4.0 License.
the Creative Commons Attribution 4.0 License.
| 04 Oct 2023
Micro business participation in collective flood adaptation. Lessons from scenario-based analysis in Ho Chi Minh City, Vietnam
Abstract. Although research on the impacts of climate change on small and medium-sized enterprises (SMEs) and their adaptation to climate change risks has recently received more attention, the focus on micro and household businesses is still very limited. Micro and household businesses are adversely affected by compound flooding events - a situation that will become more acute in the future – but there is little attention in the scientific literature on their adaptation options and actual implementation. Against this background, the paper analyzes the following research questions How are micro-businesses already responding to flooding? Are micro-businesses willing to collectively invest in future proactive adaptation efforts in their neighborhood? What are the key drivers and barriers to adaptation? Based on scenario-based field experiments in Ho-Chi-Minh City, our results show that micro-businesses could play a much larger role in collective adaptation. Often overlooked in adaptation research, their willingness to engage in collective action under severe constraints is surprising. The conceptual framework presented in this paper helps us to understand the key drivers and barriers of micro-businesses' willingness to participate in collective adaptation activities. The most important key barriers for micro-businesses are limited financial capacity and lack of support from local authorities. However, micro-businesses are willing to contribute depending on the concrete adaptation measure and financing options. If no financial contribution is expected, almost 70 % are willing to participate in awareness raising campaigns. And although their financial capacity is very limited, 39 % of micro-businesses would contribute financially if the costs were shared with other businesses in their neighborhood and with local authorities. In this context, micro-businesses should be much more involved in adaptation plans and measures. Through their local embeddedness, they can be important multipliers in strengthening adaptive capacity at the local level.
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Notice on discussion status
The requested preprint has a corresponding peer-reviewed final revised paper. You are encouraged to refer to the final revised version.
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Preprint
(924 KB)
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The requested preprint has a corresponding peer-reviewed final revised paper. You are encouraged to refer to the final revised version.
- Preprint
(924 KB) - Metadata XML
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- Final revised paper
Journal article(s) based on this preprint
Interactive discussion
Status: closed
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RC1: 'Comment on egusphere-2023-2185', Anonymous Referee #1, 22 Dec 2023
The authors have presented survey results from micro businesses in HCMC in Vietnam regarding their willingness to participate and contribute toward combined flood adaptation and mitigation measures. The survey results are presented clearly and the authors' conclusions match those in previous similar research cited by them. I have only minor comments and few spelling errors for further improving the manuscript:
- The authors have made a distinction between micro businesses and SMEs in the first sentence of their Introduction. However, later paragraphs apply the conclusions drawn by other authors for SMEs to micro businesses. A brief description of the distinction between micro business and SMEs, along with a short explanation of similarities that enable drawing the same conclusions would eliminate any confusion for the reader.
- The authors have highlighted the importance of micro and small businesses by referring to them as building up the "social and economic fabric". A brief quantifiable description of their importance, such as, the percentage of people employed in them or percent of GDP that they contribute in HCMC, will help bolster the author's statement.
- Line 24 - ...following research questions *:* How...
- Line 54 - "...challenges *in* respect to climate change" can be changed to "...challenges with respect to climate change"
- Line 117 - "...weather event *led* to long-lasting negative impacts" can be changed to "...weather event can lead to long-lasting negative impacts"
- Line 137 - ...Neise and Revilla Diez (2019) *emphazise* that...
- Line 229 - ...small rivers and *chanels* result...
- Line 365 - ...in Vietnam *being a member the party’s own social* organization...
- Line 457 - The term "slightly significantly" appears contradictory and could be further clarified.
- Line 533 - "...*result* clearly..." can be changed to "...results clearly..."
Citation: https://doi.org/10.5194/egusphere-2023-2185-RC1 -
AC1: 'Reply on RC1', Javier Revilla Diez, 15 Feb 2024
We express our gratitude to you for conducting a thorough and positive review of our initial manuscript. Your comments and observations will definitely improve the paper’s coherence. Of course, we plan to take them up in our revisions.
Response in respect to the differences between micro-businesses and SMEs: As micro businesses are a specific subset of small and medium-sized enterprises (SMEs), micro-businesses have both similarities and differences with larger small and medium-sized enterprises. Both micro-businesses and SMEs are characterized by their relatively smaller size compared to larger firms, are typically privately owned and operated by entrepreneurs or a small group of individuals, and have a local or regional focus, serving a specific market or community. However, the literature suggests that micro-businesses, by definition, are even smaller in terms of the number of employees, have lower sales and profits, and have limited assets. A systematic literature review by Gheres et al. (2016) shows that micro businesses often lack growth ambitions because owners tend to be growth averse and are constrained by underdeveloped skills in key business areas such as networking, marketing, business planning, and human resources. Due to time constraints, micro businesses are locked into day-to-day operations rather than investing time in long-term strategic business management. In addition, institutional bottlenecks place an additional burden on micro-enterprises. As a result, they have limited access to higher-skilled labor, face a "closed" business environment as a result of negative external perceptions stemming from the stigmatization of their location, and find it more difficult to access finance and other support mechanisms than larger small and medium-sized enterprises.
In order to emphasize the uniqueness of micro-enterprises in the revision, we will try to make the distinction between micro-enterprises and larger SMEs clearer and be more cautious when referring to general SME studies.
Response to your comment on the importance of micro-businesses: In the revision we will take this up. Here, the suggested statistics: The VN Census in 2020 shows that micro and small businesses still play an important role in Ho Chi Minh City. Alone, 86 % of the firms are micro-businesses. Small and medium sized businesses account for another 11 % meaning that micro businesses and SME represent 97% of the firms in HCMC. In respect to employment, micro businesses account for 19 % and SMEs for another 25% of the total employment, summing up to 1,3 Mio. Out of 2.9 Mio employees in HCMC.
However, as in many fast-growing countries, official statistics about micro and small businesses in Vietnam in general and in Ho Chi Minh City specifically is limited and fragmented. This implies that the sector might be still undervalued.
Many thanks for the editing suggestions which we all tackle in the revision.
Citation: https://doi.org/10.5194/egusphere-2023-2185-AC1
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RC2: 'Comment on egusphere-2023-2185', Anonymous Referee #2, 26 Dec 2023
The authors have presented a study micro businesses located in HCMC (Vietnam) concerning their willingness to participate and contribute toward collective flood adaptation measures. This study builds upon existing work while providing a new perspective on the capacity of micro SME to act rather than a stock take of their behaviour/actions. The survey results are presented clearly and is not "surprising" given the knowledge present in the current (limited) body of literature. Overall, I do not have major comments to make. However, I can suggest the following considerations:
1) Given that the methodology is in effect a choice experiment? Why was such an approach not considered for this paper formally?
2) This is in effect a stated preference study (i.e., you ask the respondents to state if they would or would want a hypothetical outcome), what steps were taken to minimize the potential hypocritical bias in the respondents choices? While hypothetical bias cannot be eliminated in a stated preference study, did you take any steps to limit the potential degree of hypothetical bias in terms of the construction of the scenarios or research processing? I understand that you mention external validity, which is true for the transference of the results but hypothetical bias would have possibly introduced an upwards bias in responses.
Citation: https://doi.org/10.5194/egusphere-2023-2185-RC2 -
AC2: 'Reply on RC2', Javier Revilla Diez, 15 Feb 2024
We express our gratitude to you for conducting a thorough and positive review of our initial manuscript. Your comment and observations will definitely improve the paper’s quality. Of course, we plan to take them up in our revisions and will provide more clarification.
1) Given that the methodology is in effect a choice experiment? Why was such an approach not considered for this paper formally?
You are right, basically, this study is based on the rationales of discrete choice experiments. However, our research design explicitly emphasizes the following two specifics: To explore the participants individual contribution to a public good, and to explore whether the participant is willing to contribute financially to the public good or free-ride on the others contributions (see e.g., Ones and Putterman 2007). The rationale behind such contributions is called the voluntary contribution mechanism. In our case study, flood adaptation is further defined as a so-called discrete public good, whose provision is only guaranteed if several actors cooperate and individually provide certain financial contributions (i.e., threshold value). Hence, the public-good game implies that if the provision point of the adaptation measure is not reached, then a money-back guarantee is applied. In this case, the individual contribution of each actor in the experiment is refunded. In Behavioral economics, these underlying rationales and mechanisms are applied in so-called public good games. Overall, they try to explain why collective actions variously succeed or fail. Given our specific research design, we therefore focused on public good games as the complementary theoretical background.
2) This is in effect a stated preference study (i.e., you ask the respondents to state if they would or would want a hypothetical outcome), what steps were taken to minimize the potential hypocritical bias in the respondents choices? While hypothetical bias cannot be eliminated in a stated preference study, did you take any steps to limit the potential degree of hypothetical bias in terms of the construction of the scenarios or research processing? I understand that you mention external validity, which is true for the transference of the results but hypothetical bias would have possibly introduced an upwards bias in responses.
Many thanks for this very valuable comment. Here our answer to concerns raised by your comment which will elaborate further in our revision.
We spent a lot of time in advance to make the scenarios as realistic as possible by visiting and interviewing flood-affected businesses, which were then discussed with local experts. We also conducted a qualitative survey of business owners about the actual impacts and adaptation measures. This helped us minimize hypothetical bias, although it cannot be completely eliminated. In the revision we will be more specific on our methodological approach, its strengths and weaknesses.
Citation: https://doi.org/10.5194/egusphere-2023-2185-AC2
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AC2: 'Reply on RC2', Javier Revilla Diez, 15 Feb 2024
Interactive discussion
Status: closed
-
RC1: 'Comment on egusphere-2023-2185', Anonymous Referee #1, 22 Dec 2023
The authors have presented survey results from micro businesses in HCMC in Vietnam regarding their willingness to participate and contribute toward combined flood adaptation and mitigation measures. The survey results are presented clearly and the authors' conclusions match those in previous similar research cited by them. I have only minor comments and few spelling errors for further improving the manuscript:
- The authors have made a distinction between micro businesses and SMEs in the first sentence of their Introduction. However, later paragraphs apply the conclusions drawn by other authors for SMEs to micro businesses. A brief description of the distinction between micro business and SMEs, along with a short explanation of similarities that enable drawing the same conclusions would eliminate any confusion for the reader.
- The authors have highlighted the importance of micro and small businesses by referring to them as building up the "social and economic fabric". A brief quantifiable description of their importance, such as, the percentage of people employed in them or percent of GDP that they contribute in HCMC, will help bolster the author's statement.
- Line 24 - ...following research questions *:* How...
- Line 54 - "...challenges *in* respect to climate change" can be changed to "...challenges with respect to climate change"
- Line 117 - "...weather event *led* to long-lasting negative impacts" can be changed to "...weather event can lead to long-lasting negative impacts"
- Line 137 - ...Neise and Revilla Diez (2019) *emphazise* that...
- Line 229 - ...small rivers and *chanels* result...
- Line 365 - ...in Vietnam *being a member the party’s own social* organization...
- Line 457 - The term "slightly significantly" appears contradictory and could be further clarified.
- Line 533 - "...*result* clearly..." can be changed to "...results clearly..."
Citation: https://doi.org/10.5194/egusphere-2023-2185-RC1 -
AC1: 'Reply on RC1', Javier Revilla Diez, 15 Feb 2024
We express our gratitude to you for conducting a thorough and positive review of our initial manuscript. Your comments and observations will definitely improve the paper’s coherence. Of course, we plan to take them up in our revisions.
Response in respect to the differences between micro-businesses and SMEs: As micro businesses are a specific subset of small and medium-sized enterprises (SMEs), micro-businesses have both similarities and differences with larger small and medium-sized enterprises. Both micro-businesses and SMEs are characterized by their relatively smaller size compared to larger firms, are typically privately owned and operated by entrepreneurs or a small group of individuals, and have a local or regional focus, serving a specific market or community. However, the literature suggests that micro-businesses, by definition, are even smaller in terms of the number of employees, have lower sales and profits, and have limited assets. A systematic literature review by Gheres et al. (2016) shows that micro businesses often lack growth ambitions because owners tend to be growth averse and are constrained by underdeveloped skills in key business areas such as networking, marketing, business planning, and human resources. Due to time constraints, micro businesses are locked into day-to-day operations rather than investing time in long-term strategic business management. In addition, institutional bottlenecks place an additional burden on micro-enterprises. As a result, they have limited access to higher-skilled labor, face a "closed" business environment as a result of negative external perceptions stemming from the stigmatization of their location, and find it more difficult to access finance and other support mechanisms than larger small and medium-sized enterprises.
In order to emphasize the uniqueness of micro-enterprises in the revision, we will try to make the distinction between micro-enterprises and larger SMEs clearer and be more cautious when referring to general SME studies.
Response to your comment on the importance of micro-businesses: In the revision we will take this up. Here, the suggested statistics: The VN Census in 2020 shows that micro and small businesses still play an important role in Ho Chi Minh City. Alone, 86 % of the firms are micro-businesses. Small and medium sized businesses account for another 11 % meaning that micro businesses and SME represent 97% of the firms in HCMC. In respect to employment, micro businesses account for 19 % and SMEs for another 25% of the total employment, summing up to 1,3 Mio. Out of 2.9 Mio employees in HCMC.
However, as in many fast-growing countries, official statistics about micro and small businesses in Vietnam in general and in Ho Chi Minh City specifically is limited and fragmented. This implies that the sector might be still undervalued.
Many thanks for the editing suggestions which we all tackle in the revision.
Citation: https://doi.org/10.5194/egusphere-2023-2185-AC1
-
RC2: 'Comment on egusphere-2023-2185', Anonymous Referee #2, 26 Dec 2023
The authors have presented a study micro businesses located in HCMC (Vietnam) concerning their willingness to participate and contribute toward collective flood adaptation measures. This study builds upon existing work while providing a new perspective on the capacity of micro SME to act rather than a stock take of their behaviour/actions. The survey results are presented clearly and is not "surprising" given the knowledge present in the current (limited) body of literature. Overall, I do not have major comments to make. However, I can suggest the following considerations:
1) Given that the methodology is in effect a choice experiment? Why was such an approach not considered for this paper formally?
2) This is in effect a stated preference study (i.e., you ask the respondents to state if they would or would want a hypothetical outcome), what steps were taken to minimize the potential hypocritical bias in the respondents choices? While hypothetical bias cannot be eliminated in a stated preference study, did you take any steps to limit the potential degree of hypothetical bias in terms of the construction of the scenarios or research processing? I understand that you mention external validity, which is true for the transference of the results but hypothetical bias would have possibly introduced an upwards bias in responses.
Citation: https://doi.org/10.5194/egusphere-2023-2185-RC2 -
AC2: 'Reply on RC2', Javier Revilla Diez, 15 Feb 2024
We express our gratitude to you for conducting a thorough and positive review of our initial manuscript. Your comment and observations will definitely improve the paper’s quality. Of course, we plan to take them up in our revisions and will provide more clarification.
1) Given that the methodology is in effect a choice experiment? Why was such an approach not considered for this paper formally?
You are right, basically, this study is based on the rationales of discrete choice experiments. However, our research design explicitly emphasizes the following two specifics: To explore the participants individual contribution to a public good, and to explore whether the participant is willing to contribute financially to the public good or free-ride on the others contributions (see e.g., Ones and Putterman 2007). The rationale behind such contributions is called the voluntary contribution mechanism. In our case study, flood adaptation is further defined as a so-called discrete public good, whose provision is only guaranteed if several actors cooperate and individually provide certain financial contributions (i.e., threshold value). Hence, the public-good game implies that if the provision point of the adaptation measure is not reached, then a money-back guarantee is applied. In this case, the individual contribution of each actor in the experiment is refunded. In Behavioral economics, these underlying rationales and mechanisms are applied in so-called public good games. Overall, they try to explain why collective actions variously succeed or fail. Given our specific research design, we therefore focused on public good games as the complementary theoretical background.
2) This is in effect a stated preference study (i.e., you ask the respondents to state if they would or would want a hypothetical outcome), what steps were taken to minimize the potential hypocritical bias in the respondents choices? While hypothetical bias cannot be eliminated in a stated preference study, did you take any steps to limit the potential degree of hypothetical bias in terms of the construction of the scenarios or research processing? I understand that you mention external validity, which is true for the transference of the results but hypothetical bias would have possibly introduced an upwards bias in responses.
Many thanks for this very valuable comment. Here our answer to concerns raised by your comment which will elaborate further in our revision.
We spent a lot of time in advance to make the scenarios as realistic as possible by visiting and interviewing flood-affected businesses, which were then discussed with local experts. We also conducted a qualitative survey of business owners about the actual impacts and adaptation measures. This helped us minimize hypothetical bias, although it cannot be completely eliminated. In the revision we will be more specific on our methodological approach, its strengths and weaknesses.
Citation: https://doi.org/10.5194/egusphere-2023-2185-AC2
-
AC2: 'Reply on RC2', Javier Revilla Diez, 15 Feb 2024
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Javier Revilla Diez
Roxana Leitold
Van Tran
Matthias Garschagen
The requested preprint has a corresponding peer-reviewed final revised paper. You are encouraged to refer to the final revised version.
- Preprint
(924 KB) - Metadata XML