Geopolitical Risk and Environmental, Social, and Governance (ESG) practices of listed companies in Vietnam

ESG could be driven by regulation as per the legitimacy view, realized benefits as per stakeholders and resource-based views, or by governance problems as per managerial agency view. This paper examines the motivations driving Environmental, Social, and Governance (ESG) practices among firms in Vietnam. Using a panel data of 833 firm-year observations of listed companies in the VNX-All shares during the period from 2018 to 2023 and using the method to decompose ESG into three separate areas and linking them to the development of regulations, it is found that firms tend to engage in ESG practices primarily to comply with regulations. Specifically, the findings indicate that firms in environmentally sensitive industries, which must implement and disclose their environmental practices, are more committed to ESG initiatives than their peers. The findings imply that ESG compliance is especially prominent for companies subject to regulatory requirements. Further analysis reveals that while ESG practices typically benefit firms, these advantages are not fully realized through mere compliance. Our evidence yields support for both the stakeholder and resource-based views. The study illustrates that going beyond compliance can substantially benefit firms; however, this is not necessarily true for ESG initiatives motivated by managerial agency-driven considerations. The findings have important implications for regulators, investors, and corporate boards in understanding the motivations and identifying mechanisms to enhance ESG toward sustainable development.

ESG practices mitigating geopolitical risks: Implications for sustainable environmental management

PurposeThis study aims to investigate the relationship between geopolitical risk (GPR) and gold price bubbles to determine whether rising GPR can drive deviations in the fundamental value of gold, thus leading to speculative bubbles.Design/methodology/approachUsing a data set that spans from January 2002 to December 2023 and covers both GPR data and gold price data, this study applies the log-periodic power law singularity (LPPLS) model to identify gold price bubbles. The analysis explores the effects of GPR and its sub-indices – geopolitical risk–acts (GPRA) and geopolitical risk–threats (GPRT) – on gold price bubbles. The causal relationships are examined through logistic regression, Tobit modelling and machine learning, with a focus on different countries, including major gold producers and consumers.FindingsThe results indicate a significant relationship between GPR and gold price bubbles, particularly with GPRA, which exerts a stronger influence than GPRT does. Peaks in GPR often align with the formation of gold price bubbles, both positive and negative. Additionally, geopolitical instability in Russia has a significant effect on US gold price bubbles.Practical implicationsThe findings provide valuable insights for investors and policymakers by emphasizing the importance of GPR in shaping gold price dynamics. Investors are advised to consider the nuanced roles of GPRA and GPRT when using gold as a hedge during periods of heightened geopolitical tension.Social implicationsUnderstanding the role of GPR in gold price bubbles can help mitigate the financial risk associated with speculative bubbles, thereby offering a better framework for managing assets during geopolitical crises.Originality/valueThis study extends existing research by directly linking GPR with gold price bubbles via the LPPLS model, with a novel emphasis on the differentiation between GPRA and GPRT, providing new perspectives on the safe-haven role of gold during geopolitical uncertainty.

Geopolitical risks and tensions are nowadays regularly presented by policymakers and analysts as key conditioning factors of economic activity in both the short and the medium-run. Widely accepted operational measures of geopolitical risks tend to be based on counting the number of newspaper articles related to adverse geopolitical events, in particular following the ground-breaking paper of Caldara and Iacoviello (2022) in which they build their Geopolitical Risk (GPR) indexes. In this paper we propose one avenue to make further progress in the measurement of such risks. We provide a decomposition of GPR by exploiting the idea that the geopolitical risks that a country faces can be traced back to the countries or entities that are the source of those risks. In this regard, we exploit the idea that geopolitical risk linked to a specific geography or political entity can be interpreted as a “bilateral GPR”, and that the aggregation of such bilateral GPRs provides a natural way of interpreting the overall GPR index. We show that our indexes add distinct information from the benchmark GPR, and together form a more accurate representation of the geopolitical tensions currently present between the major economies. We also show that the geographical origin of a given GPR shock determines its macroeconomic effect in a given economy (as computed from standard VAR models), both in terms of the intensity of such effect and even its sign (i.e. whether a particular GPR shock causes GDP to increase or decrease).

A number of studies in environmental disclosure have suggested that corporates accountable for environmental responsibility practice have lower cost of capital. However, this relationship has not yet been discovered in Vietnam. The purpose of this study is to examine the relationship between environmental disclosure and the equity cost of 115 non-financial companies listed on Vietnamese stock market from 2014 to 2017 with 460 observations. This study uses the panel data regression model (the fixed effects model (FEM) and the random effects model (REM)) to assess the impact of environmental disclosure on the equity cost of listed companies in Vietnam. Content analysis method according to GRI guidelines is used to measure the level of the environmental responsibility practice and Easton’s model (2004) is used to estimate firms’ ex ante cost of equity. The research results show that the level of environmental information disclosure of listed companies in Vietnam is not high and there is a negative relationship with statistical significance between the environmental disclosure and cost of equity of listed companies in Vietnam. The findings suggest that environmental practice can be profitable and beneficial to Vietnamese listed companies. Therefore, companies in Vietnam need to change their awareness of social and environmental responsibility practices. This study also shows that the suitable model for listed companies in Vietnam is the FEM.

The purpose of this study is to examine the impact of geopolitical risks on natural resource rents in BRICS countries. The current study uses wavelet analysis to examine the relationship between geopolitical risks and natural resource rents in BRICS (China, India, Russia, Brazil, and South Africa) economies over time-frequency space from 1990 to 2020. The wavelet-based analysis results reveal that the co-movement between natural resource rents and geopolitical instability in BRICS countries appears to be changing simultaneously over different time periods and different frequencies. More importantly, our empirical results highlight that these geopolitical risks negatively impact natural resource rents at medium and low frequencies in China, India, Russia, and Brazil, while geopolitical risks positively impact natural resource rents in South Africa over the sample period. From the research results, some policy implications related to sustainable development or conservation of natural resources for future generations are suggested.

This paper sets out to explore the nexus between Russia and Turkey regarding their geopolitical uncertainty measures (GPR) during the Putin Administration era in Russia. The innovative Caldara and Iacoviello indices and the Vector Autoregressive (VAR) methodology are adopted. This study sheds light on the series of geopolitical events that have taken place in Russia and Turkey in recent decades. Empirical outcomes reveal that Turkish geopolitical uncertainty is a weak influencer that increases Russian GPR in the short-term while decreasing it in the medium-term. The reverse effect does not hold. The nexus between geopolitical risk in Turkey and Russia is found to be unstable. Uncertainty in Turkey constitutes both a negative and a positive determinant of geopolitical stability in Russia, depending on the time horizon of the impact. Russia could take advantage of Turkish positive effects in the medium-run. This could be alarming for investors but could also prove beneficial as they should not invest in Russian assets when the country’s geopolitical risk is elevated due to Turkey’s geopolitical instability. Additionally, it is documented that energy financial markets in Russia are not influential on geopolitical uncertainty.

Background/Objectives: This paper presents an analysis of birth rate statistics, specifically focusing on recorded births in Scotland. The main research objective focuses on investigating the influence of geopolitical concerns on birth rate forecasts. Specifically, we examine whether individuals may choose to postpone or abstain from having children during times of conflict or political turmoil due to concerns about personal safety, the welfare of their children, or uncertainty about the future caused by geopolitical risks. Additionally, this study examines how disruptions to healthcare services, such as limited access to prenatal care and maternal health facilities, can affect birth outcomes and lead to changes in birth rates. Methods: To approach the research objective both machine learning algorithms and classical statistical procedures. Also, as part of the current analysis, the Geopolitical Risk Index has been applied as an extra factor to predict the birth rate. Results: The results of our study demonstrate the effectiveness of machine learning in producing precise predictions in this field, while emphasizing the significant influence of geopolitical risk on comprehending the dynamics of birth rates in Scotland. Conclusions: This study examines the effectiveness of several machine learning regression models in accurately predicting the number of births in Scotland using data that is not included in the model training process. Findings show promising outcomes in predicting births, while geopolitical instability has been indicated as a substantial influence on birth rates and fertility rates.

Given the increasing reliance on public-private partnerships (PPP) in energy infrastructure across emerging economies, understanding how geopolitical instability influences these investments is crucial. This study aims to assess the impact of geopolitical risk (GPR) on PPP investments in the energy sector (PPE). The study employs a panel dataset covering BRICS economies from 1985 to 2023 and utilizes the CS-ARDL model to capture both short-run and long-run effects while addressing cross-sectional dependence and heterogeneity. To ensure robustness, the GMM model is applied. The empirical results indicate that GPR has a significantly negative impact on PPE, implying that heightened uncertainty discourages private sector participation in large-scale energy projects. The causality analysis confirms a bidirectional relationship between GPR and PPP energy investments, indicating that geopolitical instability not only affects investment decisions but may also be influenced by energy sector dynamics. The findings emphasize the need for strong institutional frameworks, risk mitigation mechanisms, and strategic financial incentives to sustain PPP investments in energy despite geopolitical uncertainty. Additionally, regional cooperation and GPR insurance mechanisms could help mitigate uncertainties, ensuring long-term sustainability of energy infrastructure development. This study contributes to the literature by integrating geopolitical risk into the discourse on energy financing through PPP, a largely overlooked aspect in prior research.

Purpose This study aims to investigate the impact of geopolitical risks (GPRs) on the ethical commitments of companies, specifically focusing on environmental, social, and governance (ESG) performance in USA. By leveraging institutional theory and resource dependence theory, the research seeks to understand how external risks influence companies’ compliance with sustainability responsibilities and their effect on ESG performance across its three dimensions. Design/methodology/approach An unbalanced sample of 2,862 US-based companies was selected for this study, covering the period from 2002 to 2019. The research uses a dual theoretical approach, integrating institutional and resource dependence theories, to analyse how GPRs affect companies’ ESG performance. Quantitative methods are used to examine the relationship between GPRs and ESG outcomes, assessing both individual and collective dimensions of ESG. Findings The findings reveal that GPRs significantly influence companies’ ethical commitments towards ESG performance. These risks can lead to institutional changes, altering norms and expectations and causing companies to adopt practices to mitigate risks and meet external demands. Consequently, companies may divert resources from ESG initiatives to manage GPRs, impacting their ability to achieve ESG goals. Originality/value This study offers a novel perspective by examining the intersection of GPRs and ESG performance through institutional and resource dependence theoretical lenses. It provides valuable insights into how external risks influence corporate ethical commitments and the strategies organizations can adopt to navigate these challenges. The research contributes to the existing literature by highlighting the importance of transparency and accountability in managing GPRs and advancing sustainability initiatives.

The objective of the study is to identify how geopolitical risk (GPR) influences tax avoidance behavior in Turkey over the period of 2007-2022. The findings of the study, which integrates financial and GPR data and runs panel data analysis, reveal that GPR has a detrimental effect on firms’ tax avoidance activities. The negative relationship between tax avoidance and GPR is consistent with the agency theory view of tax avoidance. According to the agency theory view of tax avoidance, this finding suggests that Turkish firms do not prefer to engage in tax avoidance activities when GPR arises since saving cash through tax avoidance increases agency costs. A series of robustness tests with alternative measures of tax avoidance and GPR also provide evidence that an increase in GPR leads to lower engagement in tax avoidance both in the short run and long run. According to the findings, policymakers should evaluate the economic impacts of GPR and promote good governance practices to improve tax system efficiency and reduce tax avoidance costs, while managers should address agency problems to maximize the value-enhancing benefits of tax avoidance.

The impact of geopolitical risks (GPR) on enterprises is significant, yet the existing literature lacks a comprehensive understanding of how GPR affects environmental, social, and governance (ESG) performance. This study addresses this gap by analysing data from Chinese enterprises over the period 2009 to 2021. It empirically examines the impact of GPR on ESG performance and explores the underlying mechanisms. Specifically, the analysis considers the roles of investor attention and government subsidies as moderating factors. The results indicate that GPR inhibits corporate ESG performance. State-owned enterprises are found to mitigate these adverse effects, while privately-owned enterprises tend to exacerbate them. Mechanism tests reveal that GPR negatively impacts ESG performance by increasing financing constraints and reducing financial performance. Furthermore, increased investor attention and government subsidies can alleviate the negative effects of GPR on ESG performance. These findings offer valuable insights for organisations, governments, and stakeholders, enabling them to better respond to GPR and achieve sustainable development.

This study examines the relationship between geopolitical risk (GPR) and the investment levels of non-financial listed firms in Vietnam during the period 2007–2022, while also assessing the role of information asymmetry. Utilizing the Entropy method to construct an index measuring the degree of information asymmetry, the results reveal that GPR does not reduce investment through capital expenditure cuts, contrary to previous studies. However, information asymmetry significantly influences investment decisions when GPR increases. Specifically, firms facing high levels of information asymmetry tend to reduce their investments, whereas firms with low levels of information asymmetry continue to maintain their investment projects despite geopolitical risks. Based on these results, the authors propose policy implications aimed at promoting investment and contributing to national economic growth.

Objectives: Workplace productivity has always been affected by a high-stress level and lack of sports activities. This aspect requires the researchers' emphasis and the present research performs this role by examining the much neglected impact of sports activities, stress management, and work-life balance on workplace productivity of manufacturing firms in Vietnam. The study also investigated the mediating impact of stress management and work-life balance among sports activities and workplace productivity of manufacturing firms in Vietnam. Methods: The primary data was collected through survey questionnaires from the employees of manufacturing companies in Vietnam. The research also applied the PLS-SEM using Smart-PLS to check the reliability and association among variables. Results: The outcomes indicated that sports activities, stress management, and work-life balance have a positive linkage with the workplace productivity of manufacturing firms in Vietnam. The outcomes also revealed that stress management and work-life balance significantly mediate among sports activities and workplace productivity of manufacturing firms in Vietnam. Conclusion: This research guides the policymakers in making policies related to workplace productivity improvement using sports activities, work-life balance, and stress management.

Research aims: Amid rising global geopolitical upheaval, geopolitical risks progressively influence market volatility, particularly in Indonesia. This study examined the relationship between sustainable performance and stock price crash risk (SPCR), with geopolitical risk as a moderating variable.Design/Methodology/Approach: Data were collected from companies with environment, social, and governance (ESG) scores in the Refinitiv database over 2019-2023, resulting in 236 observations. Data analysis was conducted using the system generalized method of moments (GMM) approach, effectively addressing small sample size and endogeneity.Research findings: ESG performance imposed a negative and significant impact on SPCR. Furthermore, integrating ESG and geopolitical risk could reduce a stock market crash risk. A robustness test using coarsened exact matching provided consistency in these results.Theoretical contribution/Originality: This study introduces geopolitical risk as a moderating variable in the ESG-SPCR relationship, an area underexplored in current literature, particularly within Indonesia’s stock market. The results support the buffering hypothesis, reinforcing the need to incorporate geopolitical risk assessment while mitigating market crashes through ESG practices.Practitioner/Policy implication: Insights from this study guide policymakers and investors in mitigating market risks by integrating ESG performance and geopolitical risk assessment, particularly in environmental management,Research limitation/Implication: Reliance on a single ESG rating source may limit generalizability. Future research should incorporate multisource databases to capture measurement divergence.