COMPARATIVE ANALYSIS OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE DISCLOSURE AND FINANCIAL PERFORMANCE: EVIDENCE FROM THAI AND VIETNAMESE LISTED COMPANIES

Abstract

This study investigates the impact of Environmental, Social, and Governance Disclosure (ESGD) on financial performance—measured by Return on Assets (ROA) and Tobin’s Q (TBQ)—of publicly listed firms in Thailand (1131 observations) and Vietnam (186 observations) from 2012 to 2023, using data from Bloomberg and employing OLS, fixed effects, and random effects models. The findings reveal pronounced cross-country heterogeneity. For Thai firms, ESGD is significantly and negatively associated with both ROA and TBQ, suggesting that higher disclosure levels may reduce short-term profitability and market valuation. In contrast, for Vietnamese firms, ESGD shows a significant positive effect on TBQ, indicating that robust ESG practices enhance market perception, yet its negative impact on ROA implies that the financial benefits of ESG may be delayed. Additionally, while liquidity (current ratio) and leverage (debtto-equity) significantly influence ROA in Thailand, the models for Vietnamese firms demonstrate greater explanatory power, reflecting the more consistent role of ESGD within their performance structure. By highlighting these context-specific repercussions, this study contributes to the literature on ESG in Southeast Asia and underscores the necessity for customized ESG strategies that account for local regulatory, economic, and cultural factors.