Factors influencing the outsourcing decisions and the importance of outsourcing on financial performance of SMEs in Can Tho City

The present study aimed to examine factors that affect the outsourcing decisions, and the importance of outsourcing on the financial performance of SMEs in Can Tho city. The data was collected by interviewing 153 SMEs who used outsourcing. The research methodology included Cronbach’s alpha test, Confirmatory factor analysis (CFA) and Structural equation modeling (SEM). The results showed that outsourcing services had a stronger impact on the financial performance of SMEs in Can Tho city including (1) the Return on Sales ratio - ROS, (2) the Return on Assets ratio - ROA and (3) the Return On common Equity ratio - ROE. Particularly, the use of outside resources had the strongest effect on ROA and ROE ratio.