Generalized Method Of Moments Research Articles

Boosting the efficacy of green accounting for better firm performance: artificial intelligence and accounting quality as moderators

Purpose This study aims to deepen our understanding of how conventional technologies and robust accounting education standards can impact the effectiveness of green accounting practices in enhancing firm performance. To achieve this, the paper explores the moderating effects of artificial intelligence (AI) and accounting education quality on the relationship between green accounting and firm performance. Design/methodology/approach Using generalized method of moments estimation, this research uses a comprehensive dataset comprising 32,680 firm-year observations of listed companies from ten prominent countries – Canada, the UK, the USA, China, France, Germany, India, Japan, South Korea and Italy – over the period from 2012 to 2022. These countries, selected based on their high gross domestic product rankings as reported by the International Monetary Fund, ensure a diverse representation of economic strengths and capture a wide range of green accounting practices. Findings The study shows that green accounting practices positively impact current firm performance. Country-level AI positively moderates this relationship, suggesting that advanced AI infrastructure enhances the benefits of green accounting through improved data accuracy and decision-making. However, country-level accountancy education quality negatively moderates the relationship, indicating that stringent implementation of green accounting standards in these regions may introduce complexities and costs that reduce firm performance. Practical implications Integrating AI enhances data processing, predictive analytics and decision-making, improving green accounting effectiveness. High-quality accounting education ensures accurate reporting and greater transparency. These insights, when applied, can empower businesses to optimize sustainability strategies, assist policymakers in developing targeted regulations and guide educators in preparing accountants for the evolving demands of green accounting. Originality/value To the best of the authors’ knowledge, this study is the first to explore the combined moderating effects of AI and accounting education quality on the relationship between green accounting and firm performance. By highlighting the synergistic role of digital innovation and robust educational standards, this research offers novel insights into how these factors can enhance the effectiveness of green accounting practices and improve financial outcomes.

Identifying policy determinants of bank default risk during the COVID-19 pandemic: empirical evidence from the U.S. and Canada

ABSTRACT This study examines the policy determinants of bank default risk, proxied by credit default swap (CDS) spreads, using quarterly data from the U.S. and Canada for the period 2020 to 2022. The analysis considers four determinant groups: the COVID-19 pandemic shock, aggressive monetary and fiscal policy responses, macroprudential-related bank financial fundamentals, and macroeconomic and market conditions. Utilizing General Least Squares (GLS) and dynamic panel models with system General Method of Moments (GMM), the findings reveal that rising COVID-19 deaths significantly widen CDS spreads. Expansionary monetary policies reduce bank default risk, though the effectiveness under conventional monetary policy is reduced by increasing COVID-19 deaths. In contrast, expansionary fiscal policies and inflation broaden CDS spreads. The combined analysis highlights policy stances as dominant factors, with macroprudential-related fundamentals having minimal impact. The findings are robust using both 5-year and 10-year CDS measures. This study has significant policy implications during health and economic crises. For financial stability, policymakers should prioritize reducing pandemic-related deaths, utilize expansionary monetary policies with health support strategies, balance fiscal support to avoid excessive government spending, and implement measures to control inflation. It is essential to enhance coordination between healthcare, fiscal, and monetary authorities for effective policy implementation.

Financial inclusion and stability in Ethiopia using bank-level data: A two-step system GMM estimation

Background This paper examines the impact of financial inclusion on bank stability within Ethiopian context, using panel data from 17 commercial banks over the period 2015-2023. Given the scarcity of research focused on the relationship between financial inclusion and bank stability in Ethiopia, this paper seeks to address a crucial gap by analyzing both conventional and digital aspects of financial inclusion in relation with bank stability. Methods A two-stage principal component analysis (PCA) was conducted to construct a composite financial inclusion index, integrating 10 conventional and 5 digital indicators. The study applied a two-step robust system generalized method of moments (GMM) to examine the effects of financial inclusion on bank stability, complemented by Granger causality testing to examine the directionality of this relationship. Results The result reveals a significant positive effect of financial inclusion on bank stability and Granger causality tests confirms a bi-directional relationship between financial inclusion and stability, indicating that improvements in financial inclusion foster greater stability and vice versa. Our results also highlight that while bank efficiency and GDP growth rate positively effect stability, total assets and income diversification exhibit detrimental effects. Conclusions It is essential to capitalize policy synergies to promote bank stability and to enhance financial inclusion through conventional and digital channels, while carefully managing the implications of risks associated with income diversification and asset distribution. Ensuring inclusive financial system is vital for maintaining bank stability, thus positioning it as a key priority for financial institutions.

Understanding Multi‐horizon Forecasts: Identification, Estimation and Testing

The properties of multi‐horizon forecasts are investigated by specifying and estimating a model nesting rational forecasts, as well as deviations from rationality resulting from horizon‐specific biases and idiosyncratic errors. Identification of the model's parameters is achieved by combining information on forecasts for a given point in time with different information sets, and forecasts at different points in time based on the same information set. Both sets of forecasts are used to estimate the model's parameters by generalised method of moments. A test of rationality is proposed with the twin advantages of circumventing parameter identification and boundary issues. The finite sample properties of the GMM estimator and the rationality test are also investigated. Applying the approach to US GDP growth forecasts of the Survey of Professional Forecasters, the empirical results show that forecasts deviate from rationality over all forecast horizons, with the strength of the deviations from rationality increasing with the forecast horizon.

The effect of energy poverty on gender inequality in Southern Asian countries

Purpose The purpose of this study is to explore the relationship between gender inequality and energy poverty in Southeast Asian countries from 2000 to 2020. The study aims to assess the long-term impact of gender inequality on energy poverty by considering factors such as per capita gross domestic production (GDP), population growth and gross capital formation. By analyzing these variables, the research seeks to shed light on the disproportionate burden women face in energy-poor regions and to provide insights into how addressing energy poverty can promote gender equality and sustainable development in the region. Design/methodology/approach This study uses a dynamic generalized method of moments (GMM) model to analyze the long-term cointegration between gender inequality and energy poverty in Southeast Asian countries. The data, sourced from World Data Indicators, spans from 2000 to 2020, including variables such as GDP, population growth and gross capital formation. Proxy measures for energy poverty and gender inequality were developed using access to electricity, clean cooking technologies and female employment statistics. Stationarity tests and cointegration analyses were conducted to ensure the validity of the results, confirming the relationships among the variables for the region studied. Findings The study finds a significant positive relationship between gender inequality and energy poverty in Southeast Asian countries. Higher levels of gender inequality are associated with increased energy poverty, with women disproportionately affected due to reliance on traditional cooking methods. The dynamic GMM model confirms this long-term cointegration, showing that economic growth initially increases energy poverty but reduces it as nations invest in sustainable energy. Population growth has a negative association with energy poverty, suggesting that development and infrastructure improvements mitigate its effects. These findings highlight the need for gender-sensitive energy policies in the region. Originality/value This study offers a novel contribution by empirically examining the long-term relationship between gender inequality and energy poverty in Southeast Asian countries, an underexplored area in existing literature. Using a dynamic GMM approach, it highlights the disproportionate burden women face due to energy poverty, particularly through traditional cooking methods. The research provides valuable insights into how addressing energy poverty can promote gender equality, offering practical policy recommendations for sustainable development. Its findings serve as a foundation for policymakers to craft gender-sensitive energy interventions that enhance both social equity and economic growth in developing regions.

Levels of mandatory CSR compliance and the payoff: evidence from India

Purpose This paper aims to examine the diverse levels of corporate social responsibility (CSR) expenditure among Indian companies and its influence on their performance. The study aims to determine whether exceeding the mandatory CSR spending limit provides an edge to companies that outperform in enhancing corporate firm value. Design/methodology/approach A dynamic model using system generalized method of moments (GMM) was used to analyze a balanced panel data set of 191 firms over seven years, spanning from 2016 to 2022. Return on assets was used as a proxy to gauge financial performance. At the same time, the study also examined the robustness of the results by considering return on equity and Tobin’s Q as additional measures. Findings The study results indicate that, in a mandatory CSR setting, all companies are generally perceived as performing and reporting on CSR equally. Hence, it will not make any payoff, although few companies outperform. Therefore, companies should differentiate themselves regarding CSR spending and reporting to claim a competitive advantage in the market. The study also suggests that the payoff of mandatory CSR expenditure for both performing and outperforming companies is reflected more in non-quantifiable firm characteristics than in measurable performance metrics. Research limitations/implications The period of study covers 7 years, i.e. 2015–2016 to 2022–2023. This may limit capturing long-term CSR practices and firm performance trends. Additionally, data from only 191 Indian companies restrict generalizability; future research should include diverse geographic regions with mandated CSR spending to provide a more comprehensive view. In subsequent studies, contextual factors like regulatory changes and macroeconomic conditions could be considered moderating variables. Practical implications The study provides valuable insights to top management, indicating that spending beyond the threshold limit of mandatory CSR spending does not enhance corporate firm value. Instead, this additional investment may yield benefits in the form of goodwill and reputation over the long term. Social implications This study assists corporations in optimizing their CSR strategies to enhance their social and financial performance impact. Moreover, the study suggests ways to improve the CSR payoff and the need for increasing stakeholder satisfaction. Originality/value The study provides original insights into the relationship between mandatory CSR spending and firm performance in the Indian context, revealing that CSR spending does not significantly impact financial metrics, and it highlights the importance of considering a non-quantitative matrix to enhance the firm value in a mandatory CSR setting.

Renewable energy, carbon footprints, natural resources depletion and economic growth in Africa

Purpose This study aims to examine the interplay between renewable energy consumption, carbon footprints, natural resources depletion and economic growth. Design/methodology/approach It engaged 45 African countries using the generalized method of moments (GMM) approach. Data from the World Development Indicators for the period 2000–2023 are used to analyse the relationships among these variables. Findings The result indicates a positive and significant effect of greenhouse gas emissions on economic growth in all regions of Africa, except for Southern Africa. Regarding the depletion of natural resources, the authors observe a dominant negative effect on economic growth. Thus, an increase in the depletion of natural resources contributes to the reduction of economic growth in most regions of Africa, notably West Africa, East Africa and sub-Saharan Africa as a whole. Moreover, the depletion of natural resources can also have negative social impacts, such as conflicts over access to remaining resources, which can indirectly influence economic stability and growth. Originality/value This study contributes to the existing literature by providing empirical evidence of the positive effects of renewable energy consumption on carbon footprints, natural resource depletion and economic growth. By quantifying these relationships, the study offers valuable insights into the potential of renewable energy to address pressing environmental and economic challenges.

Exploring the Relationship Between Technological Progress, Human Capital, Political Uncertain, Energy Consumption, and Economic Growth: Evidence from a Panel Data Analysis

AbstractThis study examines the determinants of economic growth by integrating technological progress, human capital, energy consumption, and monetary policy uncertainty in an extended theoretical model. The empirical investigation covers 18 economies from 2009 to 2019 and applies the Bias-Corrected Estimation (BC) and Generalized Method of Moments (GMM) techniques. The findings reveal that while gross capital formation is a significant growth driver, financial development has no meaningful impact. Notably, intermediate education contributes positively to growth, whereas advanced education surprisingly shows a negative effect. Additionally, the results indicate a direct relationship between renewable energy consumption and growth, with oil consumption having a negative impact. Political instability, measured by the Global Economic Policy Uncertainty (GEPU) index, also hinders growth.

Exploring Budget Surpluses: Budget Absorption Problems in Recently Decentralized Macedonian Municipalities

ABSTRACT This study treats operating budget surpluses as an absorption problem rather than a strategic fiscal policy. Applying a system generalized method of moments (GMM) model on panel data from 80 Macedonian municipalities for the period 2006–2020, the study examines the relation of decentralization and vertical fiscal imbalance with these systematic operating surpluses. The findings from the study are mixed. The findings from this study are relevant to all developing countries undergoing fiscal decentralization reforms, especially post-socialist countries. This study fills a void in the literature examining non-strategic surpluses in recently decentralized local governments.

Does ICT adoption influence the bank’s risk-taking behavior? Evidence from advanced, developing and emerging nations

PurposeThis is the first attempt to investigate the impact of information and communication technology (ICT) on the risk-taking behavior of banks.Design/methodology/approachThis study considers 74 advanced, developing and emerging countries in the period of 2010–2021. The study considers internet use, mobile subscriptions, broadband access and ATM availability as ICT indicators, while using bank Z_score as a proxy for risk-taking. To get comprehensive insights, pooled OLS, fixed effect models and generalized methods of moments (GMM) are applied.FindingsIt is found that ICT has a consistently positive influence on the risk-taking behavior of banks in advanced, developing and emerging countries. Notably, internet users and broadband access have a bigger impact in advanced economies, but mobile cellular subscriptions and ATMs are more significant in developing and emerging countries. Other factors, such as GDP growth and market capitalization, positively influence the bank’s risk-taking approaches, but the cost-to-income ratio and inflation have an inverse connection.Practical implicationsThis will provide useful advice to the government, bank executives, financial regulators, policymakers, regulators, academicians, technology developers and other relevant stakeholders who want to maximize the advantages of ICT in the banking sector while reducing related risks.Originality/valueThis is the first study to examine the impact of ICT on banks’ risk-taking approaches in advanced, developing and emerging countries.

The influence of blockchain technology on circular economy implementation in the automotive sector: From a GMM model to a new machine learning algorithm

AbstractThis investigation explores the integration of blockchain technology (BCT) with circular economy (CE) principles within the automotive sector, leveraging a dataset from the years 2011 to 2019. Employing advanced analytical techniques, including machine learning models and the system generalized method of moments (GMM), the study meticulously assesses BCT's impact on CE practices over the specified period. The dataset, curated from esteemed sources such as CSRHub, Thomson Reuters, and Bloomberg, enhances the reliability and validity of our analysis. Results indicate a positive influence of BCT on the adoption and effectiveness of CE practices in the automotive industry, suggesting that CE practices can bolster firm performance. Notably, the analysis reveals that support vector machines (SVM) and neural networks (NNs) exhibit superior efficacy over the random forest (RF) model in capturing the nuances of the BCT‐CE interplay. This is evidenced by their lower root‐mean‐square error (RMSE) and mean absolute error (MAE), signifying greater predictive accuracy. The findings illuminate BCT's potential to revolutionize CE practices, optimize resource use, and foster sustainability in the automotive field.

The synthesis of logistics performance and technological innovation on environmental quality

PurposeThis study aims to examine the impact of logistics performance and technological innovation on environmental quality in Africa, focusing on carbon dioxide (CO2) emissions and renewable energy consumption as indicators of environmental quality.Design/methodology/approachThe study employs a panel data analysis of 43 African countries over the period 1990–2021. Data on logistics performance, technological innovation, CO2 emissions, and renewable energy consumption are sourced from the World Development Indicators database of the World Bank. Grounded in the Triple Bottom Line (TBL) framework, which integrates economic, social and environmental dimensions of sustainability, the analysis utilises the generalised method of moments (GMM) technique to address the issue of endogeneity.FindingsThe regression results reveal significant relationships between logistics performance, technological innovation and environmental quality indicators. Logistics performance demonstrates a negative impact on CO2 emissions, while technological innovation positively influences renewable energy consumption. The interactive effect of logistics performance and technological innovation mitigates CO2 emissions, aligning with the TBL framework’s environmental dimension by promoting sustainability. Furthermore, trade openness exhibits a significant negative effect on both CO2 emissions and renewable energy consumption. The findings highlight the potential synergies between logistics performance and technological innovation in driving environmental sustainability while offering economic benefits and addressing social well-being.Practical implicationsThe findings suggest the importance of prioritising investments in enhancing logistics performance and fostering technological innovation to achieve environmental sustainability goals in Africa.Originality/valueTo the best of the researchers’ knowledge, this study presents an initial attempt to examine the nexus between logistics performance and environmental quality in Africa using the logistics performance index. Furthermore, beyond assessing the individual effects of logistics performance and technological innovation on environmental quality, we delve into their interactive dynamics, adding novelty to the study.

Still dare to be different? Peers' CSR engagement and analysts' response to focal firms' CSR strategies

AbstractThis study investigates how security analysts' response to focal firms' corporate social responsibility (CSR) strategies varies with the level of CSR engagement among peer firms, about which contradictory arguments can be drawn from the perspectives of legitimacy and competitive dynamics. Legitimacy theory underscores the importance of conformity to peers' behaviors, while the competitive dynamics perspective suggests that firms should differentiate from their peers. The optimal distinctiveness theory suggests an orchestration between CSR conformity and CSR differentiation, combining the arguments of legitimacy and competitive dynamics. Based upon a sample of Chinese listed companies from 2009 to 2018, this study uses a second‐hand panel dataset and employs three‐way interactions and the generalized method of moments (GMM) system. The empirical results show that as CSR engagement among peer firms increases, heavier legitimacy pressure is imposed on focal firms, and their CSR scope conformity attracts more analyst coverage, and this effect is more prominent for firms in institutionally developed regions. On the other hand, the competitive advantage gained from CSR emphasis differentiation is weakened by rivals' engagement in CSR, and the influence of CSR emphasis differentiation on analyst recommendation is weakened by peers' CSR engagement, and in highly competitive industries, this effect of peers' CSR engagement is stronger. We propose that peers' CSR engagement has different impacts on the importance of CSR conformity and differentiation. Finally, both the theoretical and practical implications are discussed.

Climate and political effects on agriculture: Empirical evidence from SSA

AbstractThe most of Sub‐Saharan African (SSA) countries have been affected by climate change and food insecurity problems due to the reduction of production and productivity of cereal crops in the continent. The purpose of this research was to examine the short‐run and long‐run effects of climate change on agricultural productivity in 24 selected SSA countries. In the study, a systematic Generalized Method of Moments (GMM) Model was used with recent data from 24 SSA countries from 2001 to 2020. The panel regression result revealed that temperature and precipitation showed positive significant effects whereas carbon dioxide emission had negatively influenced the cereal crop productivity in the region. Specifically, the empirical result indicates that a one percent increase in precipitation increases cereal crop productivity by 0.27%. The empirical result of the GMM model revealed that political stability, temperature, GDP per capita, trade openness, carbon dioxide emission, fertilizer consumption, and precipitation have both short‐run and long‐run effects, while precipitation has only a short‐run effect on agricultural productivity in the study area. A key implication of this work is the realization of the lagging effects of climate change in determining cereal crop production and productivity. This study was unable to include all SSA countries because the excluded countries did not have sufficient data on the selected variables in the study. Hence, adopting high‐temperature and drought‐resistant types of enhanced cereal crops is advised to combat the negative effects of climate change in the study area.

An analysis of the rebound impact of energy consumption and the factors that influence it in China's agricultural productivity

With China's agricultural sector being a major contributor to both the national economy and energy consumption, the rebound effect—the phenomenon where energy efficiency improvements lead to increased energy use—poses significant challenges to sustainable energy use. The motivation for this study stems from the need to understand the extent of this rebound impact and its underlying drivers, particularly in the context of China's agricultural modernization efforts. This study examines the rebound effect of energy consumption in China's agricultural productivity and the factors influencing it over the period from 1990 to 2023. Using a Generalized Method of Moments (GMM) model, this research analyzes the relationship between energy consumption, agricultural productivity, and several influencing factors, including technological innovation, rural-urban migration, and financial development. The results reveal that (1) energy efficiency improvements have led to a significant rebound effect in China's agricultural sector, limiting potential energy savings, (2) technological advancements have mitigated the rebound effect to some extent, but the effect remains substantial, (3) rural-urban migration has contributed to labor shortages, increasing mechanization and energy demand, and (4) financial development has positively influenced both agricultural productivity and energy use, exacerbating the rebound effect. The study suggests that policymakers should focus on developing stricter energy efficiency standards and promoting technological innovations that reduce energy intensity in agriculture, while also addressing labor migration challenges to curb the rebound impact and achieve more sustainable agricultural growth.

Tying energy resiliance and digital upgradation of technology transformation of electric power system: Does financial flexibility matters?

As the energy sector undergoes rapid technological transformation, the resilience of electric power systems has become a focal point in the context of climate change and energy security. This paper examines the interplay between energy resilience and the digital upgradation of electric power systems in China, with a particular emphasis on the role of financial flexibility. Using panel data from 2005 to 2023 across 30 provinces in China, we employ the Generalized Method of Moments (GMM) model to investigate how financial flexibility—measured through capital access and adaptive financial strategies—affects the integration of digital technologies such as smart grids, renewable energy systems, and advanced monitoring infrastructures. Our findings demonstrate that financial flexibility significantly enhances the resilience of electric power systems by facilitating quicker adoption of digital technologies and enabling systems to better withstand external shocks, such as fluctuating energy demands and environmental stressors. The study offers policy insights, underscoring the importance of supportive financial mechanisms to accelerate the digital transformation and sustainability of China's energy infrastructure. This research contributes to the ongoing discourse on energy resilience by highlighting the critical role of financial flexibility in enabling technological advancements within the power sector.

The role of government integrity in the impact of environmental taxes on comparative advantage in environmental goods and climate change in emerging markets

The goal of this study is to examine how environmental taxes influence the comparative advantage in environmental products and carbon emissions within emerging economies. To gain a better understanding, we examine whether this impact changes depending on the level of government integrity. This study utilizes panel autoregressive distributed lag (ARDL) techniques and a two-step generalized method of moments (GMM) dynamic panel model to ensure accuracy. The results indicate that increased environmental taxes mitigate the comparative advantage in environmental goods for emerging markets. However, for countries with high levels of government integrity, higher environmental taxes enhance their competitive edge in environmental goods. Additionally, our findings show that although a rise in environmental taxes is associated with higher carbon emissions, raising such taxes results in a reduction in carbon emissions for emerging economies with solid government integrity. These findings suggest that robust political institutions are crucial in promoting the comparative advantage of emerging markets in environmental goods and mitigating climate change. In the absence of substantial confidence in political or governmental institutions, the efficient implementation of climate taxes poses considerable challenges. Furthermore, we observe that an increase in the comparative advantage of environmental goods results in a decrease in carbon emissions.

Determinants of Banks Profitability: Evidence from Nigeria Banking Industry

The study, investigated determinants of banks profitability in Nigeria. Other studies in this area concentrated on other profitability notions, this study incorporated Economic Value Added (EVA). Due to the presence of endogeneity problems inherent in most panel data sets of this nature we employed a two-step system GMM estimator to produce a robust estimation and account for the endogeneity problem in the data. The study revealed that bank size has a positive and significant impact on all measures of bank profitability with the exception of Net Interest Margin (NIM). This result remained consistent after macroeconomic factors were introduced in the model. The outcome also indicated that capital adequacy significantly explains bank profitability in Nigeria, with a sign change in the case of Economic Value Added (EVA) only. It was also evident that financial structure (FS) has a positive and significant impact on Return on Assets (ROA), NIM, and EVA but no evidence of significant relationship was found with ROE. The result indicated that liquidity risk (LR) has a negative and significant impact on ROA and EVA but failed to provide a significant impact on ROE and NIM. The result of the macroeconomic factors included in the model indicated that Gross Domestic Product (GDP) has a positive and significant impact on NIM and EVA while no significant relationship was found when related to ROA and ROE. Inflation as a macroeconomic variable showed a significant relationship with ROA and ROE with no evidence of significant relationship with NIM and EVA. It was concluded that the impact of firm specific factors and macroeconomic variables on the profitability of the Nigerian banking sector differ according to the profitability measure employed.

Exploring the synergy of corporate gender diversity, sustainability committee, and reporting ESG practices: An international evidence

This study delves into how gender diversity on the corporate board shapes the reporting of Environmental, Social, and Governance (ESG) practices. Besides, it examines the moderating role of a sustainability committee in the nexus between gender diversity and reporting of ESG practices. It analyzes an international sample of the S&P Global 1200 index from 2011 to 2022. The ESG reporting is based on the Refinitiv disclosure index of the firm ESG scores. The study utilizes various statistical models to provide precise empirical evidence, including fixed effects, a two-stage least squares (2SLS), and a generalized method of moments (GMM). The results demonstrate that disclosing ESG practices is a positive function of the percentages of corporate female board members and executive female directors. This suggests that companies with greater gender diversity disseminate more information about their ESG practices. Besides, a corporate sustainability committee strengthens the positive nexus between reporting ESG performance and corporate female board members and executive female directors. This underscores the moderating role of the sustainability committee in simplifying the nexus between gender diversity and reporting ESG practices. The results offer substantial implications for the leverage of gender diversity on ESG reporting. Policy-setters should actively support and promote greater corporate gender diversity, recognizing its pivotal role in fostering transparency. Additionally, a dedicated sustainability committee is crucial in enhancing the reporting of ESG performance and aligning business practices with sustainable development goals.

Unveiling the Nexus: Foreign Ownership, Innovation Dynamics, and Firm Performance through a Resource-Based Lens in Vietnam

This study investigates the complex relationships between firm resources, innovation, foreign ownership, and firm performance in the context of Vietnam's emerging market. Using a comprehensive dataset of 17,430 firm-year observations from 1,245 manufacturing firms across Vietnam for the period 2010 to 2023, we employ system GMM estimation to address potential endogeneity concerns. Our findings reveal non-linear effects of firm resources and foreign ownership on performance, measured by both ROA and Tobin's Q. Specifically, we observe inverted U-shape relationships for human capital and foreign ownership, diminishing returns for physical capital, and a positive squared term for R&D intensity. Moreover, we find that foreign ownership positively moderates the effects of firm resources on performance. These results are robust to alternative measures and subgroup analyses. Our study contributes to the literature by providing a nuanced understanding of firm performance drivers in Vietnam's unique institutional context, extending the applicability of resource-based and knowledge-based views to this emerging market. The findings offer valuable insights for managers and policymakers in Vietnam, highlighting the importance of balanced resource allocation, strategic innovation investments, and the potential benefits of foreign ownership in enhancing firm performance.