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The Influence of Financial Indicators on Vietnamese Enterprise’s Sustainability Reports Disclosing Process

Author

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  • Nguyen Thi Mai Anh

    (Department of Financial Accounting, School of Accounting and Auditing, National Economics University, Hanoi 100000, Vietnam)

  • Nguyen Thanh An

    (School of Advanced Education Programs, National Economics University, Hanoi 100000, Vietnam)

  • Nguyen Thi Minh Ngoc

    (School of Advanced Education Programs, National Economics University, Hanoi 100000, Vietnam)

  • Vu Ngoc Xuan

    (Department of Microeconomics, Faculty of Economics, National Economics University, Hanoi 100000, Vietnam)

Abstract

Sustainability reporting has become increasingly crucial for businesses worldwide, communicating environmental, social, and governance (ESG) performance to stakeholders. Despite the growing importance of sustainability reporting, there remains a gap in understanding how financial indicators influence the disclosure process, particularly in Vietnamese enterprises. This paper aims to address this gap by investigating the influence of financial indicators on the sustainability reporting practices of Vietnamese companies. Employing a mixed-methods approach, combining a quantitative analysis of financial data with a qualitative assessment of sustainability reports, the research seeks to uncover the nuanced relationship between financial performance metrics and the quality and extent of sustainability disclosures. The research was conducted to identify, evaluate, and measure financial factors affecting the quality of companies’ sustainability reports in Vietnam. The research is based on scoring the sustainable development reports of the top 100 listed joint stock companies on the HOSE—Ho Chi Minh City Stock Exchange. Based on the research model of Dissanayake, in the case of Vietnam, we build a scoring model for the sustainable development report based on GRI standards and add additional criteria appropriate to the situation of each listed company on the Vietnam stock exchange. Based on the research overview, our team tested hypotheses related to the short-term current ratio, total asset turnover ratio (AT), return on equity ratio (ROE), and debt-to-equity ratio (DE). The empirical results show that the AT and ROE significantly positively affect the sustainability reports; the DE hurts the sustainability reports. The findings are expected to provide valuable insights into the factors shaping sustainability reporting practices in Vietnam and contribute to the existing literature on corporate disclosure and sustainability.

Suggested Citation

  • Nguyen Thi Mai Anh & Nguyen Thanh An & Nguyen Thi Minh Ngoc & Vu Ngoc Xuan, 2024. "The Influence of Financial Indicators on Vietnamese Enterprise’s Sustainability Reports Disclosing Process," JRFM, MDPI, vol. 17(4), pages 1-21, April.
    • Handle: RePEc:gam:jjrfmx:v:17:y:2024:i:4:p:146-:d:1370360
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    References listed on IDEAS

    as
    1. Nguyen Thi Mai Anh & Le Thi Khanh Hoa & Lai Phuong Thao & Duong Anh Nhi & Nguyen Thanh Long & Nguyen Thanh Truc & Vu Ngoc Xuan, 2024. "The Effect of Technology Readiness on Adopting Artificial Intelligence in Accounting and Auditing in Vietnam," JRFM, MDPI, vol. 17(1), pages 1-15, January.
    2. Tarek Eldomiaty & Islam Azzam & Mostafa Fouad & Yasmeen Said, 2024. "The Use of Economic Indicators as Early Signals of Stock Market Progress: Perspectives from Market Potential Index," IJFS, MDPI, vol. 12(1), pages 1-18, February.
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