The impact of equity in FDI firms on accountants' loyalty: Application of equity theory and creative application in economics sociological knowledge

the hotly debated issues in companies as well as FDI firms in particular. A large portion of 
the accountants in FDI firms have graduated from university and had the ability to use English or other foreign languages. They 
are an intellectual team in society with high sensitivity and high demand for equality at work. They are also a class of people 
with a wide knowledge base and a high need for process control. Hence, it can be said that accountants in FDI firms have greater 
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sensitivity to equality than others from sectors of the enterprise. The question is, how equality in an organization affects their 
loyalty and concretes expression of their attitude and behavior. Therefore, the study of the effects of equality on the loyalty of 
accountants is necessary. 
2. Equity theory 
One of the first studies on organizational equity belongs to Adams (1963, 1965). Nowadays, the theory of equity has been 
researched and developed by many different authors, including Greenberg (1990) and Lind and Tyler (1988). Equity theory was 
explained by Adams (1965) through the comparison with what is relevant to others, groups of people, other organizations, etc. 
and fairness is a factor that builds up the satisfaction of the participants in that relationship. The concept of organizational equity 
refers to employees' perceptions of the degree to which they are treated equally within the organization and how these 
perceptions affect the organization's performance as a commitment and satisfaction (Greenberg, 1990). According to Coetzee 
(2004), descriptions and explanations of equality in the workplace are called organizational equity, which shows the fair and 
respectful treatment of the managers towards employees. The organizational equity is also understood that everything in the 
workplace is expressed through the management decisions, which leads to the employees’ feeling of reasonableness, equality, 
clearance and unbiased (Greenberg, 2005; Lee (2007). There are many aspects of the equity theory related to the organization's 
main outcomes such as employee behavior in the organization (Moorman, 1991), commitment, job satisfaction and trust in 
management (Alexander & Ruderman, 1987), work style, management style and managerial judgment (Colquitt, 2001). The 
equity theory in the organization has been widely applied in practice and research, especially in the field of human resource 
management. In Vietnam, Nguyen (2010) tested a sample of 528 marketing employees in businesses in Ho Chi Minh City, 
applying the equity theory of Adams (1965) to identify the attributes (indicators) of factor “equity in firms”. The finding is that 
“equity in a firm” includes three attributes: (i) I never feel that I am being used in the company, (ii) I have been adequately 
compensated when working overtime; (iii) In general, I am treated fairly within the company. Nguyen (2015) asserted that the 
decisions of managers always have two factors: technical factors (technical and financial calculations, etc.) and human factors. 
Both of these factors need to be addressed well. If managers only consider technical factors and disregard or ignore human 
factors, there will be no room for success in management because the human factor is the main issue bringing about consensus 
and support, which is a sufficient condition for the success of the organization. 
3. Research Methodology 
Inheriting the results of previous studies by Adams (1963, 1965); Greenberg (1990); Alexander & Ruderman (1987), Moorman 
(1991), Lind & Tyler (1988); Colquitt (2001). Coetzee (2004), Lee (2007), Nguyen (2010), Nguyen (2015) and by using a 
qualitative research approach namely interviews with selected experts to perform a quantitative research, we have identified 
equity in FDI firms (E) to determine the loyalty of accountants in Thanglong industrial park (LA). Then, we made a questionnaire 
consisting of 5 observation variables in a 5-point Likert scale. Independent variables are measured from 1 “without effect” to 5 
“strongly” (see Table 1). The collection of data was accomplished through a survey of 150 accountants in Thanglong industrial 
park, for the period 2018-2019, close to this study period. Therefore, their feedback on the loyalty of accountants is considered 
very appropriate. Out of 150 questionnaires we sent, we received the feedback of 130 respondents. After checking the 
information on the returned questionnaires, we had only 105 questionnaires with full information for data entry and analysis, 
the size of this sample was consistent with study of Hair et al. (1998), namely n = 5 × m = 5 × 5 = 25. Therefore, the rest of 
observations for model 1 are 105 surveys (70.0%). Most respondents have bachelor degree or higher (91.7%). As can be seen, 
all participants are at high quality knowledge, and this makes the survey reliable. We then used the EFA analysis and correlation 
analysis to determine the influence of equity in FDI firms determinant on the loyalty of accountants in Thanglong industrial 
park. 
Dependent variable: The loyalty of accountants. 
Independent variable: The independent variables are described in Table 1. 
Table 1 
Determinants and Its Coding 
Code Scale Source 
Equity in FDI firms (E) 
E1 Managers respect and treat me fairly. Coetzee (2004), Nguyen (2010) 
E2 The management decisions of businesses are felt by accountants as reasonable, equal, clear and 
unbiased. 
Greenberg (2005); Lee (2007) 
E3 Accountants have commitment, satisfaction with the job and put their trust in the management levels. Alexander & Ruderman (1987) 
E4 Managers have appropriate working methods and assessments. Colquitt (2001) 
E5 I will be paid overtime bonuses when it is necessary to work overtime. Nguyen (2010) 
D.H. Nguyen and D.T. Do /Accounting 6 (2020) 217
3.1 Research Model 
From the above analysis, we have designed a research model as shown in Fig. 1. 
Fig. 1. Research model 
4. Research results 
4.1. Descriptive Statistics 
Fig. 2 presents details of the personal characteristics of the participants in this survey. 
Gender Age 
Seniority work Job description 
Fig. 2. Respondents by gender, age, job description, seniority work 
Data in Fig. 2 show that among the 105 respondents, 25.7% of the participants were male while the remaining 78 were female, 
representing for 74.3%. Of these, 48 of them aged 22 to 27, accounting for 45.7%; and 54.3% of the participants were over 27 
years old. Among the 105 respondents, accounting staff, general accounting were represented for 35.2% and 32.4%, respectively 
while the remaining 34(32.4%) were chief accountant. Of these, 35.2% of the participants have had from 1 to 5 years and the 
remining 64.8% had more than 5 years of job experience. 
27
78
Male Female
48
57
22--27 <27
37
68
1--5 <5
34
34
37
General accountants Chief accountants
Accounting staff
Equity in FDI firms (E) 
The loyalty of 
accountants (LA)	
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Table 2 
Descriptive Analysis of Attributes of Equity in FDI firms 
 N Minimum Maximum Mean Std. Deviation 
E1 105 2.0 5.0 4.24 .658 
E2 105 2.0 5.0 4.01 .803 
E3 105 2.0 5.0 4.03 .657 
E4 105 1.0 5.0 3.90 1.028 
E5 105 2.0 5.0 3.57 .949 
Valid N (listwise) 105 3.95 
Data in Table 2 illustrate that the respondents agree with the dependent variable of “Equity in FDI firms” where five attributes 
were quite high with an average of 3.95 compared with the highest of the Likert 5-point scale. All 5 attributes were rated at an 
average of 3.57 or higher. 
4.2. Cronbach’s Alpha 
Equity in FDI firms has been measured by the Cronbach's Alpha with coefficient of 0.736. Results of testing Cronbach’s alpha 
of attributes are presented in Table 3 as follows, 
Table 3 
Results of Cronbach’s Alpha Testing of Attributes 
Scale Mean if 
Item Deleted 
Scale Variance if 
Item Deleted 
Corrected Item-
Total Correlation 
Cronbach's Alpha if 
Item Deleted 
E1 15.50 6.349 .495 .696 
E2 15.73 6.178 .401 .724 
E3 15.71 6.110 .579 .671 
E4 15.85 5.130 .480 .707 
E5 16.17 4.970 .603 .645 
The results also show that attributes of the independent variable had a Cronbach's Alpha coefficient greater than 0.6; the 
correlation coefficient of all attributes was greater than 0.3, so all the attributes of the independent variable were statistically 
significant (Hoang & Chu, 2008). 
4.3. Exploratory Factor Analysis (EFA) 
We then conducted Exploratory Factor Analysis (EFA) where the method of extracting coefficients were component and 
Varimax analyses of the 5 observed independent variables. As can be seen in Table 4, the results of the EFA show that 0.5<KMO 
= 0.648 < 1. Bartlett’s testimony shows sig. = 0.000 < 0.05, which means that all variables are interrelated. 
Table 4 
KMO and Bartlett's Test 
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .648 
Bartlett's Test of Sphericity Approx. Chi-Square 194.898 
Df 10 
Sig. 0.000 
After implementing the rotation matrix, we got the followings: one determinant with factor load > 0.5, Eigenvalues > 1, and the 
variance explained = 50.465%. It demonstrates that the factor analysis of the research data is appropriate. Through the quality 
assurance of the scale and the test of the EFA model, one factor that influence on the loyalty of accountants of, i.e. Equity in 
FDI firms (E) was identified. 
4.4. Correlation analysis 
Table 5 presents the results of the correlation matrix of the factors. The correlation coefficient of one factor with dependent 
variable is 0.380 > 0, reflect a positive relationship, sig. = 0.026 < 0.05. It means that all variables are interrelated (Hoang & 
Chu, 2008). 
D.H. Nguyen and D.T. Do /Accounting 6 (2020) 219
Table 5 
Correlations 
 The loyalty of accountants Equity in FDI firms 
The loyalty of accountants Pearson Correlation 1 .380 
Sig. (2-tailed) .026 
N 105 105 
Equity in FDI firms Pearson Correlation .380 1 
Sig. (2-tailed) .026 
N 105 105 
5. Discussion and suggestions for governance implications 
The application of equity theory in management shows that the sense of fairness has a positive impact on the work efficiency, 
creates good relationships in the organization, builds trust and personal commitment to organizations. These are the main factors 
that affect organizational stability. Implementing equity also creates innovation for the organization (Kim & Mauborgne, 1991). 
This is essential for human resource management, especially in the accounting sector, when there are many studies indicating 
that accounting personnel in Vietnam still have drawbacks, accountants do not meet practical requirements and the development 
of the integration economy in the future. Besides, Vietnam has not widely applied IFRS in the accounting system, in addition, 
there are few studies using equity theory to explain issues related to employees' loyalty, especially in the accounting sector when 
accounting and auditing is one of eight fields that have movability in the global integration era. Therefore, the application of 
this theory can shed light into in human resources management issues in general and accounting personnel management in 
particular. For the relationship between accountants and businesses, it is should be understood that once accountants feel the 
fairness in enterprises, they see what they receive is commensurate with what they contribute to businesses, their satisfaction 
level will improve, which creates favorable conditions for them to engage with their jobs and businesses. Therefore, FDI firms 
need to improve an equal environment in enterprises to stimulate employees’ motivation in general and accountants, in 
particular, to engage with enterprises. Regular assessment in the perceptions of employees, including accountants about 
organizational equity should be taken into consideration. Moreover, FDI firms also need to compare fairness in their working 
environment with competitors, thereby making appropriate adjustments. 
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