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Asian Business Research Journal 
Vol. 10, No. 5, 64-80, 2025 
ISSN: 2576-6759 
DOI: 10.55220/25766759.437 
© 2025 by the author; licensee Eastern Centre of Science and Education, USA 

 
 

 

 
Epistemological Reconfiguration of ESG Integration: A Multi-Theoretical Analysis 
of Investor Decision-Making Paradigms in Vietnam's Emergent Sustainable Finance 
Ecosystem 

 
Minh Khue Nguyen 
 

 
 
 United Nations International School of Hanoi, Vietnam. 

Email: minhkhuenguyen847@gmail.com  

 
Abstract 

This research investigates the epistemological reconfiguration of Environmental, Social, and 
Governance (ESG) integration within Vietnam's nascent sustainable finance ecosystem, 
examining investor decision-making paradigms through a multi-theoretical analytical framework. 
Employing a quantitative methodological approach utilizing Partial Least Squares Structural 
Equation Modeling (PLS-SEM) with complementary fuzzy-set Qualitative Comparative Analysis 
(fsQCA), this study analyzed data collected from 287 institutional investors operating within 
Vietnam's financial markets. The findings reveal significant relationships between institutional 
isomorphic pressures, ESG information asymmetry, perceived ESG value attribution, and 
sustainable investment decision-making behaviors. The research identified four distinct 
configurational pathways to ESG integration, with market knowledge sophistication 
demonstrating significant moderating effects on the relationship between ESG performance 
assessment and investment allocation decisions. This study contributes to sustainable finance 
literature by advancing a novel multi-theoretical integration model that synthesizes institutional 
theory, stakeholder theory, and behavioral finance perspectives, offering both theoretical 
extensions and practical implications for emerging market sustainable finance ecosystem 
development. The empirical evidence establishes Vietnam as a compelling contextual case for 
examining sustainable investment paradigm evolution within transitional economic frameworks. 

 
Keywords: ESG integration, Information asymmetry, Institutional isomorphism, Investment decision-making, Sustainable finance. 

 
1. Introduction 

Sustainable finance has witnessed unprecedented acceleration, fundamentally reconfiguring global capital 
allocation paradigms through Environmental, Social, and Governance (ESG) integration into mainstream 
investment frameworks (Amel-Zadeh & Serafeim, 2017). This paradigmatic shift necessitates critical scholarly 
examination as markets increasingly acknowledge sustainability parameters' material significance in asset 
valuation. Whilst developed financial ecosystems have experienced substantial ESG integration progression, 
emerging markets present distinctive transitional contexts where theoretical frameworks require considerable 
recalibration to account for distinct institutional configurations and evolutionary market dynamics (Esty & 
Karpilow, 2014). Vietnam's emergent sustainable finance ecosystem offers a particularly compelling analytical 
context for examining the epistemological reconfiguration of ESG integration paradigms. 

Hermeneutic analysis of contemporary sustainable finance literature reveals significant theoretical and 
empirical lacunae concerning the complex interplay of institutional forces, information asymmetries, and cognitive 
biases shaping investor decision-making in emerging market contexts (Crifo et al., 2015). Whilst substantial 
scholarly attention has examined ESG integration within developed markets (Eccles & Serafeim, 2013), transitional 
economies' distinctive characteristics necessitate specialised theoretical frameworks accounting for contextual 
variability in regulatory environments, market sophistication, and cultural determinants. The current research 
paradigm exhibits particular limitations in explicating configurational pathways through which institutional 
pressures translate into operational ESG integration within investment architectures in emergent financial markets 
(Doh et al., 2010). 

Vietnam represents an exemplary case for examining sustainable finance evolution within transitional 
economic frameworks. Its accelerated economic liberalisation coupled with increasing global market integration 
has catalysed heightened ESG awareness among institutional investors (Oh et al., 2013). However, 
transdisciplinary scholarship posits that significant institutional barriers persist, including regulatory 
fragmentation, information asymmetry challenges, and limited market knowledge sophistication (Sharma, 2013). 
These structural limitations manifest in heterogeneous ESG integration practices, necessitating theoretical 
frameworks that elucidate the multidimensional influences shaping sustainable investment behaviours within this 
specific context. 

mailto:minhkhuenguyen847@gmail.com
https://doi.org/10.55220/25766759.437


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The theoretical urgency for this research emerges from three interrelated conceptual limitations. First, current 
theoretical frameworks predominantly adopt siloed analytical perspectives, failing to synthesise institutional, 
stakeholder, and behavioural finance paradigms into cohesive explanatory frameworks (Kitzmueller & Shimshack, 
2012). Second, extant research exhibits limited empirical investigation of configurational pathways through which 
institutional pressures translate into operational ESG integration (Campbell, 2007). Third, market knowledge 
sophistication's moderating role in shaping the relationship between ESG performance assessment and investment 
allocation decisions remains insufficiently examined, particularly within emerging market contexts (Crifo & Forget, 
2015). 

This research's novelty lies in developing a multi-theoretical integration model synthesising institutional 
theory, stakeholder theory, and behavioural finance perspectives to elucidate the complex determinants of ESG 
integration within Vietnam's sustainable finance ecosystem. This integrated framework enables nuanced analysis of 
how institutional isomorphic pressures, ESG information asymmetry, and perceived value attribution interact to 
shape sustainable investment behaviours (Attig et al., 2013). Furthermore, methodological innovation through 
complementary application of PLS-SEM and fsQCA analytical approaches facilitates both variance-based and 
configurational examinations of ESG integration phenomena. 

The research significance extends beyond its empirical context, contributing theoretical advancements that 
enhance understanding of sustainable finance evolution within transitional economic frameworks. By elucidating 
the complex interplay of institutional forces, information environments, and cognitive factors shaping ESG 
integration, this study provides valuable insights for policymakers, market regulators, and institutional investors 
navigating sustainable finance in emerging markets (Ioannou & Serafeim, 2015). The multi-theoretical integration 
model offers a conceptual foundation for future empirical investigations across diverse institutional contexts. 

Transdisciplinary scholarship posits that ESG integration represents a transformative reconfiguration 
transcending traditional financial analysis (Cheng et al., 2014). However, translation into operational investment 
practices remains highly variable across institutional contexts, with particular heterogeneity in emerging markets 
(Margolis et al., 2009). Within Vietnam, institutional investors navigate complex trade-offs between short-term 
performance imperatives and long-term sustainability considerations within information environments 
characterised by significant asymmetries (Dhaliwal et al., 2011). 

This research contributes to theoretical advancement through three principal mechanisms: empirical validation 
for an integrated theoretical framework demonstrating the explanatory value of multi-theoretical approaches to 
complex financial phenomena (Godfrey et al., 2009); identification of distinct configurational pathways illuminating 
the equifinality characterising sustainable investment evolution (Surroca et al., 2010); and establishing market 
knowledge sophistication's critical moderating role in determining relationships between ESG assessment and 
investment outcomes (Luo et al., 2015). 

The practical significance extends to multiple stakeholder groups. For policymakers, findings inform 
regulatory frameworks addressing information asymmetry challenges (Dhaliwal et al., 2012). For institutional 
investors, strategic insights optimise ESG integration within contexts characterised by information constraints 
and institutional complexities (Flammer, 2015). For corporations, findings illuminate the critical importance of 
robust ESG disclosure practices in addressing information asymmetry challenges inhibiting effective market 
valuation of sustainability performance (Dhaliwal et al., 2011). 
 

2. Foundational Theories and Literature Review 
2.1. Foundational Theories 
2.1.1. Institutional Theory 

Institutional theory provides a robust theoretical foundation for examining the complex dynamics shaping 
ESG integration within investment decision frameworks. This paradigm elucidates how organisational behaviours 
are influenced by normative pressures, social expectations, and legitimacy considerations rather than purely 
economic rationality (DiMaggio & Powell, 1983). Within sustainable finance contexts, institutional theory 
illuminates how regulatory, normative, and cognitive institutional forces shape the evolution of ESG integration 
practices among investment actors (Campbell, 2007). The theory's emphasis on institutional isomorphism—the 
process through which organisations within a field adopt increasingly similar structures and practices—offers 
essential conceptual tools for analysing how sustainable investment approaches diffuse throughout financial 
ecosystems (Scott, 1995). 

DiMaggio and Powell's (1983) seminal work identifies three primary mechanisms driving organisational 
homogenisation: coercive, mimetic, and normative pressures. In sustainable finance contexts, coercive isomorphism 
manifests through regulatory frameworks mandating ESG disclosure, while mimetic isomorphism operates 
through imitation of successful sustainable investment practices during periods of uncertainty (Matten & Moon, 
2008). Normative isomorphism emerges through professionalisation processes as investment professionals 
increasingly incorporate sustainability considerations into accepted standards of practice (Doh et al., 2010). 

Institutional theory further illuminates how organisations navigate legitimacy challenges associated with 
evolving sustainability expectations. Suchman (1995) defines legitimacy as "a generalized perception or assumption 
that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, 
values, beliefs, and definitions" (p. 574). For investment organisations, establishing legitimacy increasingly requires 
demonstrating appropriate consideration of ESG factors, particularly as stakeholder expectations regarding 
sustainable finance practices continue to evolve (Sharma, 2013). 

The concept of decoupling provides valuable insights regarding potential divergence between formal ESG 
integration structures and actual investment practices. Meyer and Rowan (1977) introduce decoupling as the 
process through which organisations adopt ceremonial structures that conform to institutional expectations while 
maintaining operational practices that substantively differ from these formal structures. In sustainable finance 
contexts, decoupling may manifest as investment organisations implementing superficial ESG integration 
procedures to enhance legitimacy while maintaining substantive investment decisions based primarily on 
traditional financial metrics (Westphal & Zajac, 2001). 



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North's (1990) institutional economics framework enhances understanding of how formal and informal 
constraints shape sustainable investment behaviours. The interaction between formal constraints (explicit 
regulatory requirements) and informal constraints (cultural norms, values, and beliefs) creates complex incentive 
structures that influence ESG integration approaches (Peng et al., 2009). In emerging markets such as Vietnam, 
understanding these institutional dynamics is particularly critical for analysing sustainable finance evolution within 
transitional economic contexts. 

Institutional logics represent another valuable theoretical construct for examining ESG integration. Thornton 
and Ocasio (1999) define institutional logics as "the socially constructed, historical patterns of material practices, 
assumptions, values, beliefs, and rules by which individuals produce and reproduce their material subsistence, 
organize time and space, and provide meaning to their social reality" (p. 804). Within financial markets, competing 
institutional logics—such as short-term profit maximisation versus long-term sustainability—create complex 
tensions that investment actors must navigate (Lounsbury, 2007). 

Oliver's (1991) strategic responses framework provides additional analytical tools for understanding how 
investment organisations navigate institutional pressures regarding ESG integration. Organisations may adopt 
responses ranging from acquiescence to defiance, depending on factors such as perceived legitimacy benefits, 
consistency with organisational goals, and institutional enforcement capacity. Institutional complexity theory 
further elucidates how organisations navigate environments characterised by multiple, potentially competing 
institutional demands (Greenwood et al., 2011), while institutional entrepreneurship provides frameworks for 
understanding how certain actors drive sustainable finance innovation within established environments (DiMaggio, 
1988; Maguire et al., 2004). 
 

2.1.2. Stakeholder Theory 
Stakeholder theory provides essential theoretical frameworks for conceptualising how investment 

organisations navigate complex relationships with diverse stakeholders holding varying expectations regarding 
ESG integration. Freeman's (1984) seminal work defines stakeholders as "any group or individual who can affect or 
is affected by the achievement of the organization's objectives" (p. 46). This theoretical perspective emphasises that 
organisational success requires effective management of relationships with multiple stakeholders beyond 
shareholders, including employees, customers, communities, and regulators (Freeman et al., 2010). 

The normative foundation of stakeholder theory asserts that stakeholders possess intrinsic value deserving 
moral consideration beyond instrumental utility (Donaldson & Preston, 1995). For investment organisations, this 
normative perspective suggests ethical obligations to consider how investment decisions impact diverse 
stakeholders, providing philosophical justification for ESG integration beyond pure financial materiality (Phillips et 
al., 2003). Stakeholder theory's instrumental dimension provides complementary frameworks emphasising how 
effective stakeholder management enhances organisational performance outcomes (Jones, 1995), with empirical 
research indicating positive relationships between corporate sustainability performance and financial outcomes 
(Margolis et al., 2009). 

Mitchell et al.'s (1997) stakeholder salience framework offers valuable analytical tools for understanding how 
investment organisations prioritise attention to various stakeholders within ESG integration processes. 
Stakeholder salience—determined by perceived power, legitimacy, and urgency—influences which sustainability 
considerations receive priority within investment decision frameworks. In sustainable finance contexts, evolving 
stakeholder salience dynamics—such as increasing regulatory attention to climate risks or growing client demand 
for social impact consideration—significantly shape ESG integration evolution (Agle et al., 1999). 

Berman et al. (1999) distinguish between instrumental stakeholder orientation—focused primarily on financial 
benefits derived from stakeholder management—and intrinsic stakeholder orientation emphasising moral 
obligations toward stakeholders independent of performance benefits. Jones and Wicks' (1999) convergent 
stakeholder theory synthesises normative and instrumental stakeholder perspectives, recognising both the moral 
foundations of stakeholder consideration and the performance benefits derived from effective stakeholder 
management. Within ESG integration contexts, this convergent perspective helps reconcile potential tensions 
between fiduciary obligations and sustainability considerations (Crifo & Forget, 2015). 

The concept of stakeholder value creation provides frameworks for understanding how investment decisions 
can simultaneously generate financial returns while creating value for diverse stakeholders (Freeman et al., 2010), 
challenging zero-sum conceptualisations of financial versus sustainability objectives (Porter & Kramer, 2011). 
Stakeholder network theory extends traditional stakeholder frameworks by examining complex interdependencies 
among stakeholders rather than focusing exclusively on bilateral organisation-stakeholder relationships (Rowley, 
1997), while stakeholder dialogue offers theoretical frameworks regarding engagement processes that address 
sustainability concerns while potentially enhancing investment outcomes (Dimson et al., 2015; Gifford, 2010). 

Post et al.'s (2002) stakeholder view emphasises that organisational wealth creation capacity depends 
fundamentally on relationships with critical stakeholders who provide essential resources, capabilities, and support. 
For investment organisations, this theoretical lens illuminates how effective ESG integration may enhance critical 
stakeholder relationships—such as client trust or regulatory relationships—that fundamentally determine 
organisational success (Brammer & Millington, 2008). 
 

2.2. Review of Empirical and Relevant Studies 
2.2.1. ESG Information Asymmetry in Investment Decision-Making 

Empirical research consistently identifies information asymmetry as a critical challenge impeding effective 
ESG integration within investment decision frameworks. Information asymmetry—where certain market 
participants possess superior information compared to others—creates significant barriers to efficient capital 
allocation in sustainable finance contexts (Akerlof, 1970). Unlike traditional financial information subject to 
standardised reporting requirements, ESG information frequently lacks consistency in measurement, reporting 
frameworks, and verification processes (Cheng et al., 2014). 



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Research examining ESG disclosure quality reveals significant heterogeneity in reporting practices across 
organisations and markets. Dhaliwal et al. (2011) document substantial variation in voluntary sustainability 
disclosure practices, finding that firms with higher disclosure costs and poorer financial performance are more 
likely to initiate stand-alone sustainability reporting. This strategic disclosure pattern creates challenges for 
investors attempting to compare ESG performance across potential investments (Cho et al., 2015). In emerging 
markets specifically, Oh et al. (2013) find particularly pronounced heterogeneity in ESG disclosure quality, with 
significant implications for investor ability to effectively incorporate sustainability considerations. 

The relationship between information asymmetry and cost of capital provides important evidence regarding 
the financial materiality of ESG disclosure quality. Dhaliwal et al. (2011) document that initiation of voluntary 
ESG disclosure is associated with subsequent reductions in cost of capital, particularly for firms with superior 
sustainability performance. This suggests that improved sustainability transparency reduces information 
asymmetry that would otherwise manifest in higher risk premiums demanded by investors (El Ghoul et al., 2011). 
Complementary research by Cheng et al. (2014) establishes that superior ESG performance is associated with 
enhanced capital access through reduced capital constraints. 

Crifo et al. (2015) document that investors respond heterogeneously to different sustainability dimensions, with 
governance and environmental factors typically receiving greater consideration than social factors due to perceived 
financial materiality and information reliability differentials. In emerging market contexts, Xiao et al. (2017) find 
that information asymmetry regarding ESG factors creates particularly significant barriers to sustainable 
investment, as concerns regarding information reliability amplify inherent evaluation challenges. 

The role of information intermediaries in addressing ESG information asymmetry represents another 
important research stream. Chatterji et al. (2009) examine the relationship between external sustainability ratings 
and actual corporate environmental performance, finding significant variation in rating methodologies and 
reliability. Complementary research by Ioannou and Serafeim (2015) demonstrates that investment analysts' 
interpretation of sustainability information has evolved over time, with increasing recognition of the financial 
materiality of ESG factors. 

Elliott et al. (2014) document that investors' willingness to incorporate sustainability information into 
investment decisions is significantly influenced by whether this information is explicitly linked to financial 
performance. This finding highlights how framing effects shape investor responses to ESG information (Hockerts 
& Moir, 2004). Research on mandatory versus voluntary ESG disclosure regimes provides valuable insights 
regarding potential regulatory approaches to addressing information asymmetry. Ioannou and Serafeim (2014) 
analyse the impact of mandatory sustainability reporting regulations across multiple countries, finding that such 
requirements increase disclosure quantity and quality while improving sustainability performance. 
 

2.2.2. Institutional Isomorphic Pressures in Sustainable Finance 
Empirical research examining institutional isomorphic pressures provides valuable insights regarding how 

coercive, mimetic, and normative forces shape ESG integration. Coercive isomorphism manifests in sustainable 
finance contexts through regulatory requirements, client mandates, and societal expectations regarding ESG 
consideration (DiMaggio & Powell, 1983). Matten and Moon (2008) document how regulatory frameworks 
significantly influence corporate sustainability practices. In emerging markets specifically, Jamali and Neville 
(2011) find that regulatory environments exhibit particularly powerful influence on ESG-related practices due to 
their formative role in shaping market development trajectories. 

Mimetic isomorphism—the tendency to imitate other organisations during periods of uncertainty—represents 
another significant force shaping sustainable finance evolution. Doh et al. (2010) document how investment 
organisations frequently adopt ESG integration practices established by industry leaders, particularly when facing 
uncertainty regarding appropriate sustainability evaluation methodologies. Zhao et al. (2017) find that mimetic 
isomorphism is particularly pronounced in emerging market contexts, as investment organisations with limited 
ESG experience frequently emulate practices established in more developed financial markets. 

Normative isomorphism—emerging through professionalisation processes and shared educational 
backgrounds—increasingly influences sustainable finance practices as ESG considerations become integrated into 
professional investment standards (DiMaggio & Powell, 1983). Louche et al. (2012) document the evolution of 
responsible investment norms within the investment profession, finding that normative frameworks regarding 
ESG integration have strengthened significantly over time. In emerging market contexts, Xiao et al. (2017) find 
that international professional networks play particularly important roles in transmitting sustainable investment 
norms to developing financial ecosystems. 

Hoffman (1999) analyses how organisational fields evolve in response to emerging environmental 
considerations, finding that field reconfiguration processes significantly influence how organisations interpret and 
respond to sustainability imperatives. Comparative research examining sustainable finance evolution across 
different institutional contexts provides important insights regarding how national institutional environments 
shape ESG integration. Ioannou and Serafeim (2012) analyse how country-level institutions influence corporate 
sustainability performance, finding that political, labour, education, and cultural systems significantly impact ESG 
practices. 

Research examining decoupling phenomena provides valuable insights regarding potential divergence between 
formal ESG structures and actual investment practices. Westphal and Zajac (2001) document how organisations 
frequently adopt ceremonial structures that symbolically conform to institutional expectations while maintaining 
substantive practices aligned with traditional objectives. Within sustainable finance specifically, Dumas and Louche 
(2016) find evidence of decoupling in responsible investment implementation, with some organisations adopting 
formal ESG policies that have limited influence on actual investment decision-making. 
 

2.2.3. Market Knowledge Sophistication and ESG Value Attribution 
Empirical research examining market knowledge sophistication provides valuable insights regarding how 

investor expertise and cognitive frameworks influence sustainable investment behaviours. Market knowledge 



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sophistication encompasses both technical expertise regarding ESG assessment methodologies and cognitive 
frameworks for interpreting sustainability information within investment contexts (Meehan et al., 2006). Research 
indicates that knowledge sophistication significantly influences how investors attribute value to ESG factors and 
incorporate sustainability considerations into decision frameworks (Slager & Chapple, 2016). 

Amel-Zadeh and Serafeim (2017) survey global investment professionals regarding ESG integration, finding 
that perceived importance of sustainability information is strongly associated with understanding of financial 
materiality pathways. Investors with more sophisticated knowledge frameworks demonstrate greater ability to 
identify materiality connections between specific ESG factors and financial performance outcomes (Eccles et al., 
2011). In emerging market contexts specifically, Esty and Karpilow (2014) find that knowledge limitations 
regarding ESG materiality represent particularly significant barriers to sustainable investment. 

Research examining cognitive biases in sustainable investment provides important insights regarding how 
psychological factors influence ESG integration. Hirshleifer (2001) documents how various cognitive biases affect 
investor decision-making, creating systematic deviations from rational information processing that particularly 
impact evaluation of complex or unfamiliar factors. Within sustainable finance specifically, Glac (2009) finds that 
framing effects significantly influence how investors interpret and respond to ESG information. 

Slager and Chapple (2016) find that investors with longer time horizons demonstrate greater propensity to 
incorporate ESG considerations, reflecting alignment between sustainability's long-term materiality and extended 
investment perspectives. Knowledge sophistication regarding intertemporal ESG value attribution significantly 
influences how investors perceive the relevance of sustainability factors within their specific investment contexts 
(Busch et al., 2016). 

Chava (2014) documents that perceived relationships between environmental performance and financial 
outcomes significantly influence investor responses to sustainability information. Knowledge sophistication 
regarding specific value-creation mechanisms—such as risk mitigation, efficiency improvements, or stakeholder 
relationships—shapes how investors interpret ESG information within decision frameworks (Clark et al., 2015). 
Delmas and Blass (2010) document the methodological challenges associated with comprehensive ESG assessment, 
finding that effective sustainability evaluation requires significant technical expertise regarding appropriate metrics 
and analytical frameworks. 

Dimson et al. (2015) analyse successful ESG engagement initiatives, finding that investor knowledge regarding 
specific sustainability issues significantly influences engagement effectiveness. More knowledgeable investors 
demonstrate greater capacity to identify material ESG concerns, engage constructively with companies regarding 
improvement opportunities, and effectively monitor subsequent performance (Gifford, 2010). 
 

2.2.4. Sustainable Investment Decision-Making Behaviour 
Empirical research examining sustainable investment decision-making behaviours provides valuable insights 

regarding how investors operationalise ESG considerations within investment processes. Sustainable investment 
decision-making encompasses multiple dimensions including screening practices, integration methodologies, active 
ownership approaches, and thematic allocation strategies (Eurosif, 2016). Research indicates significant 
heterogeneity in these operational behaviours, reflecting varying motivations, capabilities, and institutional 
contexts (Amel-Zadeh & Serafeim, 2017). 

Hong and Kacperczyk (2009) document the financial implications of exclusionary screening, finding that "sin 
stocks" historically outperformed comparable investments due to investor aversion creating undervaluation. More 
recent research indicates increasing adoption of inclusionary screening approaches that favour sustainability 
leaders rather than simply excluding problematic sectors (Durand et al., 2013). 

Eccles and Serafeim (2013) analyse best practices in ESG integration, finding increasing incorporation of 
material sustainability factors within fundamental valuation models rather than as separate overlay processes. This 
integration evolution reflects growing recognition of ESG financial materiality (Khan et al., 2016). In emerging 
market contexts, van der Ahee and Schulschenk (2013) find that integration practices remain less developed, with 
investors frequently relying on simplified approaches due to information constraints. 

Dimson et al. (2015) analyse successful ESG engagement initiatives, finding that collaborative approaches, 
clear objectives, and home-country investor involvement significantly enhance effectiveness. In emerging markets 
specifically, Gifford (2010) finds that engagement practices require significant adaptation to account for distinct 
ownership structures, governance norms, and relationship expectations within different institutional contexts. 

Kaminker and Stewart (2012) analyse green bond markets, documenting growing institutional investor 
allocation to specifically environmental financing instruments. Chava (2014) documents the relationship between 
environmental risk exposure and financing costs, finding that firms with higher environmental concerns face 
significantly higher cost of debt. In emerging market contexts specifically, Oh et al. (2013) find that governance 
risk factors receive particular attention from investors, reflecting perceived materiality of governance 
considerations within developing market environments. 
 

2.3. Proposed Research Model 
The proposed research model integrates multiple theoretical perspectives to examine the complex 

determinants of ESG integration within Vietnam's emergent sustainable finance ecosystem. The model examines 
relationships among institutional isomorphic pressures, ESG information asymmetry, perceived ESG value 
attribution, market knowledge sophistication, and sustainable investment decision-making behaviours, with specific 
hypothesised relationships informed by existing literature and contextual considerations. 

Institutional isomorphic pressures represent a critical independent variable, reflecting the coercive, mimetic, 
and normative forces that shape organisational approaches to ESG integration. Drawing on DiMaggio and 
Powell's (1983) institutional isomorphism framework, this construct encompasses regulatory requirements, peer 
imitation processes, and professional normative expectations regarding sustainability consideration within 
investment frameworks. Previous research indicates that these institutional pressures significantly influence 
organisational adoption of ESG practices (Doh et al., 2010). The research model hypothesises that institutional 



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isomorphic pressures positively influence sustainable investment decision-making behaviours, with this 
relationship mediated by perceived ESG value attribution. 

ESG information asymmetry constitutes another important independent variable, reflecting the challenges 
investment organisations face in accessing, evaluating, and comparing sustainability information across potential 
investments. This construct encompasses multiple dimensions including information availability, quality, 
comparability, and verification (Cheng et al., 2014). Previous research indicates that information asymmetry creates 
significant barriers to effective ESG integration, particularly in emerging market contexts characterised by less 
developed sustainability disclosure practices (Oh et al., 2013). The research model hypothesises that ESG 
information asymmetry negatively influences sustainable investment decision-making behaviours, with this 
relationship mediated by perceived ESG value attribution and moderated by market knowledge sophistication. 

 

 
Figure 1. Proposed Research Model. 

 
Perceived ESG value attribution represents a mediating variable, reflecting how investment organisations 

interpret the financial implications and materiality of sustainability factors. This construct encompasses 
perceptions regarding how specific ESG considerations create or protect value through mechanisms such as risk 
mitigation, efficiency enhancement, reputation protection, or opportunity identification (Clark et al., 2015). 
Previous research indicates that these value attribution processes significantly influence how investors 
operationalise sustainability considerations within investment frameworks (Amel-Zadeh & Serafeim, 2017). The 
research model hypothesises that perceived ESG value attribution positively influences sustainable investment 
decision-making behaviours, mediating the relationships between institutional pressures, information asymmetry, 
and operational sustainable investment practices. 

Market knowledge sophistication constitutes an important moderating variable, reflecting investment 
organisations' technical expertise and cognitive frameworks regarding sustainability assessment and integration. 
This construct encompasses multiple dimensions including understanding of ESG financial materiality pathways, 
technical capability for sustainability evaluation, and cognitive frameworks for interpreting sustainability 
information (Meehan et al., 2006). Previous research indicates that knowledge sophistication significantly 
influences how investors interpret and respond to sustainability information (Eccles et al., 2011). The research 
model hypothesises that market knowledge sophistication moderates the relationship between ESG information 
asymmetry and perceived ESG value attribution, with higher knowledge sophistication reducing the negative 
impact of information challenges on value perception. 

Sustainable investment decision-making behaviour represents the dependent variable, reflecting the operational 
approaches through which investment organisations incorporate ESG considerations into investment processes. 
This construct encompasses multiple dimensions including screening practices, integration methodologies, active 
ownership approaches, and thematic allocation strategies (Eurosif, 2016). The research model examines how 
institutional pressures, information environments, value perceptions, and knowledge sophistication collectively 
shape these sustainable investment behaviours within Vietnam's emerging market context. 

The model addresses significant gaps in existing literature by developing an integrated theoretical framework 
that synthesises institutional, stakeholder, and behavioural perspectives on sustainable investment (Kitzmueller & 
Shimshack, 2012). The model advances understanding of sustainable finance evolution within emerging market 
contexts, addressing the notable lack of empirical research examining ESG integration within developing financial 
ecosystems (Xiao et al., 2017). 

The model employs Partial Least Squares Structural Equation Modeling (PLS-SEM) with complementary 
fuzzy-set Qualitative Comparative Analysis (fsQCA) as primary analytical approaches. PLS-SEM offers particular 
advantages for this research due to its capacity to examine complex relationship networks, test mediating and 



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moderating effects, and accommodate both formative and reflective measurement models (Hair et al., 2014). The 
complementary fsQCA approach enables identification of configurational pathways to sustainable investment 
outcomes, recognising the potential equifinality that characterises ESG integration within complex institutional 
environments (Fiss, 2011). 

Based on the theoretical foundations and empirical evidence presented, the research model examines the 
following specific hypotheses: 

H1: Institutional isomorphic pressures positively influence sustainable investment decision-making behaviours.  
H2: Institutional isomorphic pressures positively influence perceived ESG value attribution.  
H3: ESG information asymmetry negatively influences perceived ESG value attribution.  
H4: ESG information asymmetry negatively influences sustainable investment decision-making behaviours.  
H5: Perceived ESG value attribution positively influences sustainable investment decision-making behaviours.  
H6: Perceived ESG value attribution mediates the relationship between institutional isomorphic pressures and sustainable 

investment decision-making behaviours.  
H7: Perceived ESG value attribution mediates the relationship between ESG information asymmetry and sustainable 

investment decision-making behaviours.  
H8: Market knowledge sophistication moderates the relationship between ESG information asymmetry and perceived ESG 

value attribution, such that higher knowledge sophistication reduces the negative impact of information asymmetry. 
These hypothesised relationships collectively constitute a comprehensive theoretical framework for examining 

the complex determinants of ESG integration within Vietnam's emergent sustainable finance ecosystem. 
 

3. Research Methodology 
3.1. Research Design 

This study employs a quantitative research design utilising a cross-sectional survey methodology to 
investigate ESG integration determinants within Vietnam's emergent sustainable finance ecosystem. This approach 
aligns with the research objectives of examining relationships among key variables and testing specific hypotheses 
regarding sustainable investment behaviours (Creswell, 2014), whilst providing valuable insights regarding 
sustainable finance evolution within this transitional economic context (Amel-Zadeh & Serafeim, 2017). 

The research design incorporates complementary variance-based and configurational analytical approaches, 
enabling examination of direct relationships among variables whilst identifying distinct pathways to ESG 
integration. The primary analytical framework utilises Partial Least Squares Structural Equation Modelling (PLS-
SEM) to test hypothesised relationships (Hair et al., 2014), offering advantages through its capacity to examine 
complex relationship networks, test mediating and moderating effects, and accommodate both formative and 
reflective measurement models (Hair et al., 2012). The complementary fuzzy-set Qualitative Comparative Analysis 
(fsQCA) enables identification of configurational pathways to sustainable investment outcomes, recognising the 
potential equifinality characterising ESG integration within complex institutional environments (Fiss, 2011). 

Several mechanisms address potential methodological limitations: incorporation of both perceptual measures 
and objective indicators facilitates triangulation across measurement approaches (Jick, 1979); rigorous validity and 
reliability assessment procedures ensure measurement quality (Bagozzi et al., 1991); and multiple control variables 
account for potential confounding factors such as investor characteristics, portfolio composition, and international 
exposure (Podsakoff et al., 2003). 

The design reflects theoretical considerations regarding appropriate methodological approaches. Testing 
specific hypothesised relationships necessitates a quantitative approach capable of statistical inference and 
hypothesis testing (Creswell, 2014), whilst developing generalisable insights aligns with quantitative 
methodologies enabling systematic examination across a substantial institutional investor sample (Johnson & 
Onwuegbuzie, 2004). 

Several innovative methodological elements address limitations in previous sustainable finance research: 
complementary application of PLS-SEM and fsQCA enables both variance-based and configurational examination, 
providing more comprehensive insights than either approach individually (Woodside, 2013); sophisticated 
measurement approaches for key constructs capture the complex nature of these phenomena (Edwards, 2001); and 
rigorous moderation analysis techniques examine how market knowledge sophistication influences the relationship 
between information challenges and value attribution processes (Hayes, 2013). 
 

3.2. Data Collection 
The study employed a systematic data collection approach targeting institutional investors operating within 

Vietnam's financial markets. The population comprised investment organisations actively managing portfolios 
within Vietnam, including fund management companies, securities firms, insurance companies, pension funds, and 
banking institutions with investment operations (Crifo et al., 2015). The sampling frame was constructed using 
multiple authoritative sources including the Vietnam Securities Depository, State Securities Commission, and 
Vietnam Association of Financial Investors membership directories. 

Stratified random sampling ensured proportional representation across investor categories. Stratification 
variables included investor type, asset size, and ownership structure, enhancing sample representativeness through 
inclusion of diverse investor categories (Cochran, 1977). Within each stratum, random selection identified specific 
organisations for inclusion, enhancing generalisability to the broader institutional investor population (Lohr, 
2009). 

The primary data collection instrument comprised a structured questionnaire administered to senior 
investment professionals. Developed through comprehensive literature review, expert panel consultation, and pilot 
testing, the instrument ensured content validity, clarity, and contextual appropriateness (DeVellis, 2016). It 
incorporated multi-item Likert scales for key theoretical constructs and objective indicators regarding ESG 
integration practices, enabling triangulation across measurement approaches (Jick, 1979). 

The data collection process involved multiple stages to maximise response quality and participation. Initial 
contact established appropriate respondents based on involvement in investment decision processes and familiarity 



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with organisational ESG practices (Kumar et al., 1993). Mixed-mode administration involved both electronic 
distribution and in-person collection based on respondent preferences (Dillman et al., 2014). Follow-up 
communications at two and four weeks encouraged participation among non-respondents (Baruch & Holtom, 
2008). 

The final sample comprised 287 completed questionnaires, representing a 64.2% response rate from 447 
organisations initially contacted. This substantial response rate enhances confidence in sample representativeness 
(Baruch & Holtom, 2008). Respondent characteristics indicate balanced representation: 32.4% from fund 
management companies, 28.6% from securities firms, 18.5% from insurance companies, 12.2% from banking 
institutions, and 8.3% from pension funds. Asset size distribution includes 38.7% small investors (under USD 100 
million AUM), 42.5% medium investors (USD 100-500 million AUM), and 18.8% large investors (over USD 500 
million AUM). Ownership structure representation includes 58.2% domestic organisations, 27.5% foreign 
institutions, and 14.3% joint ventures. 

Data collection procedures incorporated specific mechanisms addressing methodological limitations: non-
response bias assessment compared early and late respondents, with no significant differences identified 
(Armstrong & Overton, 1977); common method bias mitigation included respondent anonymity, varied response 
formats, and separation of predictor and criterion measures (Podsakoff et al., 2003); and key informant bias was 
addressed through screening questions assessing position, experience, and involvement in ESG-related decision 
processes (Kumar et al., 1993). 

 

3.3. Measurement and Validation 
The measurement approach incorporated multi-item scales for key theoretical constructs, ensuring 

comprehensive coverage of complex phenomena whilst enabling rigorous reliability and validity assessment 
(Churchill, 1979). All instruments were adapted from established scales with modifications ensuring contextual 
appropriateness for Vietnam's sustainable finance ecosystem through expert panel review and pilot testing with 15 
investment professionals (DeVellis, 2016). 

The institutional isomorphic pressures construct was measured using a 12-item scale adapted from Kostova 
and Roth (2002) and Doh et al. (2010), encompassing coercive, mimetic, and normative dimensions. Coercive 
pressure items addressed regulatory requirements, client expectations, and societal demands; mimetic pressure 
items examined imitation of successful peer practices and industry standards; and normative pressure items 
assessed professional expectations and legitimacy considerations (DiMaggio & Powell, 1983). 

The ESG information asymmetry construct was measured using a 9-item scale adapted from Dhaliwal et al. 
(2011) and Cheng et al. (2014), addressing information availability, quality, and comparability dimensions. This 
approach captured multifaceted information challenges facing investors incorporating sustainability considerations 
(Amel-Zadeh & Serafeim, 2017). 

The perceived ESG value attribution construct was measured using a 10-item scale adapted from Eccles et al. 
(2011) and Clark et al. (2015), examining perceptions regarding financial materiality of sustainability 
considerations through risk mitigation, efficiency enhancement, reputation effects, competitive positioning, and 
market valuation mechanisms. 

The market knowledge sophistication construct was measured using an 8-item scale adapted from Meehan et 
al. (2006) and Slager and Chapple (2016), examining technical expertise regarding ESG metrics and evaluation 
methodologies, alongside cognitive frameworks for interpreting sustainability information (Eccles et al., 2011). 

The sustainable investment decision-making behaviour construct was measured using both perceptual and 
objective indicators. The perceptual component employed a 15-item scale adapted from Eurosif (2016) and Amel-
Zadeh and Serafeim (2017), examining screening practices, integration methodologies, active ownership 
approaches, and thematic allocation strategies. The objective component collected specific indicators regarding 
ESG policy formalisation, dedicated sustainable investment products, staff resources, and portfolio ESG score 
measurement. 

Control variables included investor characteristics, portfolio composition, ownership structure, and 
international exposure (Podsakoff et al., 2003). All measurement instruments underwent rigorous validation 
procedures: exploratory factor analysis examined initial factor structures (Conway & Huffcutt, 2003); confirmatory 
factor analysis validated the measurement model structure (Anderson & Gerbing, 1988); internal consistency 
reliability was assessed using Cronbach's alpha and composite reliability, with values exceeding 0.7 deemed 
acceptable (Nunnally, 1978); indicator reliability was evaluated through factor loadings exceeding 0.7 (Chin, 1998); 
convergent validity was assessed using average variance extracted exceeding 0.5 (Fornell & Larcker, 1981); and 
discriminant validity was evaluated using both the Fornell-Larcker criterion and heterotrait-monotrait ratio below 
0.85 (Henseler et al., 2015). 
 

3.4. Analytical Procedure 
The analytical procedure involved multiple stages examining the theoretical model and testing specific 

hypotheses. The primary analytical approach utilised Partial Least Squares Structural Equation Modelling 
implemented through SmartPLS 4 software (Ringle et al., 2015), following established procedural guidelines (Hair 
et al., 2014). 

The initial stage involved measurement model assessment, evaluating indicator reliability through factor 
loadings, internal consistency through Cronbach's alpha and composite reliability, convergent validity through 
average variance extracted, and discriminant validity through the Fornell-Larcker criterion and heterotrait-
monotrait ratio (Hair et al., 2014). 

The second stage examined the structural model, assessing path coefficients, significance levels, and R² values 
of endogenous constructs. Bootstrapping with 5,000 resamples tested significance of path coefficients (Davison & 
Hinkley, 1997). Effect sizes (f²) determined practical significance of relationships, with values of 0.02, 0.15, and 0.35 
indicating small, medium, and large effects respectively (Cohen, 1988). Predictive relevance was evaluated using 
Stone-Geisser Q² values through blindfolding procedures (Geisser, 1974; Stone, 1974). 



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The third stage focused on mediating effects, assessing specific indirect effects using bootstrapping procedures 
to determine whether perceived ESG value attribution mediates relationships between institutional pressures, 
information asymmetry, and sustainable investment behaviours (Preacher & Hayes, 2008). Both direct and indirect 
effects were examined to determine mediation type and significance (Zhao et al., 2010). 

The fourth stage examined the moderating effect of market knowledge sophistication on the relationship 
between ESG information asymmetry and perceived ESG value attribution, using the product indicator approach 
and creating interaction terms between moderator and predictor variables (Chin et al., 2003). Simple slope analysis 
visualised the moderation effect, examining relationships at different levels of market knowledge sophistication 
(Aiken & West, 1991). 

The fifth stage employed fuzzy-set Qualitative Comparative Analysis to identify configurational pathways to 
sustainable investment outcomes, examining how different combinations of causal conditions collectively lead to 
sustainable investment behaviours (Ragin, 2008). The procedure involved calibration of construct measures into 
fuzzy-set membership scores, truth table analysis to identify consistent causal configurations, and examination of 
necessary and sufficient conditions (Schneider & Wagemann, 2012). 

The final stage included supplementary analyses enhancing robustness: multi-group analysis examined 
potential heterogeneity across investor categories (Henseler et al., 2009); control variable examination, alternative 
model specification testing, and common method bias assessment through Harman's single-factor test and the 
unmeasured latent method construct approach were conducted (Podsakoff et al., 2003). Throughout all stages, 
established procedural guidelines ensured methodological rigour and result validity, supporting valid inferences 
regarding ESG integration determinants within Vietnam's sustainable finance ecosystem. 
 

4. Research Findings 
4.1. Measurement Model Assessment 

The measurement model assessment examined reliability and validity of all construct measures prior to 
substantive hypothesis testing. This comprehensive assessment ensures that measurement instruments 
appropriately capture the theoretical constructs under investigation, providing a solid foundation for subsequent 
structural model analysis. The assessment procedure followed established guidelines for evaluating PLS-SEM 
measurement models, incorporating multiple criteria to ensure measurement quality (Hair et al., 2014). 

Exploratory factor analysis (EFA) employing principal component analysis with varimax rotation was initially 
conducted to examine factor structures and identify potentially problematic items. This analysis revealed a clear 
five-factor structure corresponding to the theoretical constructs, with all indicators loading primarily on their 
intended factors. Two items demonstrated problematic cross-loadings exceeding 0.40 on multiple factors and were 
subsequently removed from further analysis to ensure construct unidimensionality (Conway & Huffcutt, 2003). The 
final measurement model retained 52 indicators across the five theoretical constructs, with each indicator 
demonstrating primary loading on its intended factor and minimal cross-loadings on other factors. 

Confirmatory factor analysis (CFA) was subsequently performed to validate the measurement model structure 
and formally assess construct validity. This analysis confirmed appropriate indicator alignment with theoretical 
constructs, with all items demonstrating significant loadings on their respective factors (p < 0.001). The CFA 
model demonstrated satisfactory fit with the empirical data according to established criteria, with Standardized 
Root Mean Square Residual (SRMR) of 0.058 below the recommended threshold of 0.08 (Hu & Bentler, 1999). This 
confirmation of measurement model structure supports subsequent reliability and validity assessments for 
individual constructs. 

Table 1 presents comprehensive reliability and validity statistics for all theoretical constructs, including 
Cronbach's alpha, composite reliability, average variance extracted (AVE), and the square root of AVE for 
comparison with inter-construct correlations. Internal consistency reliability was assessed using both Cronbach's 
alpha and composite reliability, with all constructs demonstrating values exceeding the recommended threshold of 
0.70 (Nunnally, 1978). Cronbach's alpha values ranged from 0.837 to 0.926, while composite reliability values 
ranged from 0.875 to 0.942, indicating strong internal consistency across all measurement scales. 
 

Table 1. Reliability and Validity Assessment. 

Construct Cronbach's Alpha Composite Reliability AVE 1 2 3 4 5 

1. IIP 0.892 0.917 0.648 0.805 
    

2. EIA 0.837 0.875 0.584 -0.314 0.764 
   

3. PEVA 0.904 0.926 0.714 0.512 -0.487 0.845 
  

4. MKS 0.857 0.891 0.623 0.278 -0.224 0.392 0.789 
 

5. SIDM 0.926 0.942 0.698 0.524 -0.463 0.597 0.415 0.835 
Note: Bold diagonal elements represent the square root of AVE for each construct. Off-diagonal elements represent inter-construct 
correlations. IIP = Institutional Isomorphic Pressures; EIA = ESG Information Asymmetry; PEVA = Perceived ESG Value Attribution; 
MKS = Market Knowledge Sophistication; SIDM = Sustainable Investment Decision-Making Behavior. 

 
Indicator reliability was evaluated through factor loadings, with all indicators demonstrating loadings above 

the recommended threshold of 0.70 on their respective constructs (Chin, 1998). Factor loadings ranged from 0.723 
to 0.894 across all measurement items, indicating that indicators appropriately reflect their associated theoretical 
constructs. These strong factor loadings support the reliability of individual measurement items in capturing their 
intended constructs, enhancing confidence in subsequent construct-level analyses. 

Convergent validity was assessed using the average variance extracted (AVE), with all constructs 
demonstrating values exceeding the recommended threshold of 0.50 (Fornell & Larcker, 1981). AVE values ranged 
from 0.584 to 0.714 across constructs, indicating that each construct explains more than 50% of the variance in its 
respective indicators. These results support convergent validity of the measurement scales, demonstrating that 
indicators effectively capture their associated theoretical constructs. 

Discriminant validity was evaluated using both the Fornell-Larcker criterion and the heterotrait-monotrait 
(HTMT) ratio of correlations. The Fornell-Larcker assessment indicates that the square root of AVE for each 



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construct (bold diagonal elements in Table 1) exceeds its correlations with all other constructs (off-diagonal 
elements), supporting discriminant validity according to this criterion (Fornell & Larcker, 1981). The HTMT 
analysis presented in Table 2 further confirms discriminant validity, with all HTMT ratios below the conservative 
threshold of 0.85 recommended by Henseler et al. (2015). These results collectively support discriminant validity of 
the measurement scales, indicating that constructs are empirically distinct from one another. 
 

Table 2. Heterotrait-Monotrait (HTMT) Ratio Analysis. 

Construct 1 2 3 4 5 

1. IIP 
     

2. EIA 0.358 
    

3. PEVA 0.568 0.549 
   

4. MKS 0.326 0.267 0.436 
  

5. SIDM 0.573 0.517 0.647 0.471 
 

Note: IIP = Institutional Isomorphic Pressures; EIA = ESG Information Asymmetry; PEVA = Perceived ESG 
Value Attribution; MKS = Market Knowledge Sophistication; SIDM = Sustainable Investment Decision-Making 
Behavior. 

 
The common method bias assessment through Harman's single-factor test indicated that the first factor 

accounted for 28.7% of total variance, substantially below the 50% threshold indicative of significant common 
method bias (Podsakoff et al., 2003). The unmeasured latent method construct approach provided further evidence 
against significant common method influence, with method factor loadings non-significant and explaining minimal 
indicator variance compared to substantive constructs. These results collectively suggest that common method bias 
does not significantly influence the measurement model, enhancing confidence in subsequent structural analyses. 
 

4.2. Structural Estimation Model Assessment 
The structural model assessment examined hypothesized relationships among theoretical constructs following 

confirmation of measurement model quality. This analysis evaluated the structural model based on path 
coefficients, their significance levels, and the R² values of endogenous constructs to determine relationship strength 
and explanatory power. Bootstrapping with 5,000 resamples was employed to test the significance of path 
coefficients, providing robust standard errors and confidence intervals for statistical inference (Hair et al., 2014). 

Table 3 presents the direct effects results, including standardized path coefficients, t-values, p-values, and 95% 
confidence intervals for all hypothesized direct relationships. The results indicate significant support for all direct 
effect hypotheses, with all relationships demonstrating statistical significance (p < 0.01) in the hypothesized 

directions. Institutional isomorphic pressures positively influence both perceived ESG value attribution (β = 0.397, 

p < 0.001) and sustainable investment decision-making behaviors (β = 0.237, p < 0.001), supporting hypotheses H1 

and H2. ESG information asymmetry negatively influences both perceived ESG value attribution (β = -0.362, p < 

0.001) and sustainable investment decision-making behaviors (β = -0.185, p < 0.01), supporting hypotheses H3 and 

H4. Perceived ESG value attribution positively influences sustainable investment decision-making behaviors (β = 
0.343, p < 0.001), supporting hypothesis H5. 
 

Table 3. Direct Effects Results. 

Hypothesis Relationship Path Coefficient t-value p-value 95% CI Support 

H1 IIP → SIDM 0.237 4.182 <0.001 [0.134, 0.340] Yes 

H2 IIP → PEVA 0.397 7.826 <0.001 [0.298, 0.488] Yes 

H3 EIA → PEVA -0.362 6.874 <0.001 [-0.465, -0.258] Yes 

H4 EIA → SIDM -0.185 3.142 0.002 [-0.297, -0.073] Yes 

H5 PEVA → SIDM 0.343 5.687 <0.001 [0.226, 0.458] Yes 
Note: IIP = Institutional Isomorphic Pressures; EIA = ESG Information Asymmetry; PEVA = Perceived ESG Value Attribution; 
SIDM = Sustainable Investment Decision-Making Behavior.. 

 
The assessment of explanatory power indicates that the structural model explains substantial variance in the 

endogenous constructs. The R² value for perceived ESG value attribution is 0.426, indicating that institutional 
isomorphic pressures and ESG information asymmetry collectively explain 42.6% of the variance in value 
attribution perceptions. The R² value for sustainable investment decision-making behavior is 0.512, indicating that 
the model explains 51.2% of the variance in sustainable investment practices. According to established guidelines, 
these R² values represent moderate to substantial explanatory power, supporting the theoretical model's ability to 
explain significant variance in the focal constructs (Chin, 1998). 

Table 4 presents the predictive relevance assessment through the Stone-Geisser Q² values for endogenous 
constructs. This assessment employed a blindfolding procedure with an omission distance of 7 to evaluate the 
model's predictive capability beyond in-sample estimation (Hair et al., 2014). The Q² values for both endogenous 
constructs substantially exceed zero, with values of 0.298 for perceived ESG value attribution and 0.352 for 
sustainable investment decision-making behavior. These results indicate strong predictive relevance of the 
structural model for both endogenous constructs, further supporting the theoretical framework's explanatory value 
(Geisser, 1974; Stone, 1974). 
 

Table 4. Predictive Relevance Assessment. 

Endogenous Construct R² R² Adjusted Q² Effect Size 

PEVA 0.426 0.418 0.298 Medium 
SIDM 0.512 0.503 0.352 Large 

    Note: PEVA = Perceived ESG Value Attribution; SIDM = Sustainable Investment Decision-Making Behavior. 

 
The effect size (f²) analysis assessed the practical significance of each predictor variable's influence on 

endogenous constructs. For perceived ESG value attribution, institutional isomorphic pressures demonstrated 



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medium effect size (f² = 0.218), while ESG information asymmetry showed medium effect size (f² = 0.181). For 
sustainable investment decision-making behavior, institutional isomorphic pressures demonstrated small effect size 
(f² = 0.084), ESG information asymmetry showed small effect size (f² = 0.053), and perceived ESG value attribution 
demonstrated medium effect size (f² = 0.172). These effect sizes indicate that beyond statistical significance, the 
theoretical constructs demonstrate practically meaningful influence on their respective outcome variables (Cohen, 
1988). 

Table 5 presents the specific indirect effects (path coefficients) for the hypothesized mediating relationships. 
The results indicate significant mediation of perceived ESG value attribution in the relationships between both 
exogenous variables and sustainable investment behavior. The indirect effect of institutional isomorphic pressures 

on sustainable investment decision-making through perceived ESG value attribution is positive and significant (β 
= 0.136, p < 0.001), supporting hypothesis H6. The indirect effect of ESG information asymmetry on sustainable 

investment decision-making through perceived ESG value attribution is negative and significant (β = -0.124, p < 
0.001), supporting hypothesis H7. These mediation results provide important insights regarding the mechanisms 
through which institutional forces and information environments influence operational sustainable investment 
practices. 
 

Table 5. Specific Indirect Effects (Path Coefficients). 

Hypothesis Indirect Path Path Coefficient t-value p-value 95% CI Support 

H6 IIP → PEVA → SIDM 0.136 4.592 <0.001 [0.083, 0.196] Yes 

H7 EIA → PEVA → SIDM -0.124 4.318 <0.001 [-0.181, -0.073] Yes 
Note: IIP = Institutional Isomorphic Pressures; EIA = ESG Information Asymmetry; PEVA = Perceived ESG Value Attribution; SIDM = 
Sustainable Investment Decision-Making Behavior. 

 
Table 6 presents the moderation analysis results examining hypothesis H8 regarding the moderating effect of 

market knowledge sophistication on the relationship between ESG information asymmetry and perceived ESG 

value attribution. The interaction term (EIA × MKS) demonstrates positive and significant effect (β = 0.172, p < 
0.001), supporting hypothesis H8 that market knowledge sophistication moderates the relationship between 
information asymmetry and value attribution. The positive coefficient indicates that higher knowledge 
sophistication reduces the negative impact of information asymmetry on value attribution, consistent with the 
theoretical expectation that greater expertise enhances investor ability to interpret sustainability information 
despite information challenges. 
 

Table 6. Moderation Analysis Results. 

Hypothesis Interaction Effect Path Coefficient t-value p-value 95% CI Support 
H8 EIA × MKS → PEVA 0.172 3.946 <0.001 [0.087, 0.258] Yes 

Note: EIA = ESG Information Asymmetry; MKS = Market Knowledge Sophistication; PEVA = Perceived ESG Value Attribution. 

 
Simple slope analysis was conducted to visualize the moderation effect, examining the relationship between 

ESG information asymmetry and perceived ESG value attribution at different levels of market knowledge 
sophistication (±1 standard deviation from the mean). The results indicate that at low knowledge sophistication, 

information asymmetry demonstrates stronger negative effect on value attribution (β = -0.534, p < 0.001) 

compared to high knowledge sophistication (β = -0.190, p < 0.01). This pattern confirms that higher knowledge 
sophistication buffers the negative impact of information challenges on sustainability value perceptions, 
highlighting the importance of investor expertise in navigating information-constrained environments. 

Control variable analysis revealed several significant relationships with sustainable investment behaviors. 

Investor size demonstrated positive influence (β = 0.138, p < 0.01), indicating that larger investment organizations 

exhibit greater ESG integration. Foreign ownership also showed positive influence (β = 0.154, p < 0.01), 
suggesting that international institutional connections enhance sustainable investment adoption. These control 
variable findings provide additional contextual insights regarding organizational factors influencing ESG 
integration beyond the focal theoretical constructs. 
 

4.3. Supplementary Analyses 
The supplementary analyses provided additional insights regarding ESG integration determinants through 

alternative analytical approaches. These complementary analyses enhance understanding of sustainable investment 
evolution within Vietnam's financial ecosystem by examining heterogeneity across investor subgroups, identifying 
configurational pathways to ESG integration, and visualizing moderation effects through simple slope analysis. 

Multi-group analysis (MGA) was conducted to examine potential heterogeneity in relationship patterns across 
different investor categories. Table 7 presents PLS-MGA results comparing path coefficients between key investor 
subgroups defined by size (small versus large) and ownership structure (domestic versus foreign). The results 
indicate significant differences in certain relationship patterns across these organizational contexts, highlighting 
important contingencies in ESG integration determinants. 
 
 
 
 
 
 
 
 
 
 
 



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Table 7. Multi-Group Analysis (MGA) Results. 

Path Small vs. Large 
  

Domestic vs. Foreign 
  

 
Path Diff p-value Significant? Path Diff p-value Significant? 

IIP → SIDM 0.037 0.352 No 0.144 0.038 Yes 

IIP → PEVA 0.029 0.382 No 0.018 0.428 No 

EIA → PEVA 0.212 0.007 Yes 0.186 0.022 Yes 

EIA → SIDM 0.075 0.175 No 0.034 0.347 No 

PEVA → SIDM 0.184 0.018 Yes 0.067 0.231 No 

EIA × MKS → PEVA 0.225 0.004 Yes 0.195 0.015 Yes 
Note: IIP = Institutional Isomorphic Pressures; EIA = ESG Information Asymmetry; PEVA = Perceived ESG Value Attribution; MKS = Market Knowledge 
Sophistication; SIDM = Sustainable Investment Decision-Making Behavior. 

 
Comparing small versus large investors reveals significant differences in three relationships. The negative 

relationship between ESG information asymmetry and perceived ESG value attribution is significantly stronger for 
small investors compared to large investors (path difference = 0.212, p < 0.01), indicating that information 
challenges create greater barriers to value perception for smaller organizations. The positive relationship between 
perceived ESG value attribution and sustainable investment behavior is significantly stronger for large investors 
compared to small investors (path difference = 0.184, p < 0.05), suggesting that larger organizations more 
effectively translate value perceptions into operational practices. Additionally, the moderating effect of market 
knowledge sophistication is significantly stronger for small investors compared to large investors (path difference 
= 0.225, p < 0.01), indicating that expertise plays particularly crucial role in helping smaller organizations navigate 
information challenges. 

Comparing domestic versus foreign investors reveals significant differences in two relationships. The positive 
relationship between institutional isomorphic pressures and sustainable investment behavior is significantly 
stronger for foreign investors compared to domestic investors (path difference = 0.144, p < 0.05), suggesting that 
international organizations demonstrate greater responsiveness to institutional sustainability expectations. The 
negative relationship between ESG information asymmetry and perceived ESG value attribution is significantly 
stronger for domestic investors compared to foreign investors (path difference = 0.186, p < 0.05), indicating that 
local organizations experience greater difficulty interpreting sustainability information within information-
constrained environments. The moderating effect of market knowledge sophistication is also significantly stronger 
for domestic investors compared to foreign investors (path difference = 0.195, p < 0.05), highlighting the particular 
importance of expertise development among local investment organizations. 

Fuzzy-set Qualitative Comparative Analysis (fsQCA) was conducted to identify configurational pathways to 
sustainable investment outcomes. This analysis examined how different combinations of causal conditions 
(institutional pressures, information environments, value perceptions, knowledge sophistication) collectively lead to 
sustainable investment behaviors. Table 8 presents the fsQCA results, including four distinct configurational 
pathways demonstrating consistency scores exceeding the recommended threshold of 0.80 (Ragin, 2008). 
 

Table 8. Fuzzy-Set Qualitative Comparative Analysis (fsQCA) Results. 

Solution Path 1 Path 2 Path 3 Path 4 

IIP ⚫ ⚫ ⚫ ⚪ 
EIA ⚪ ⊗ ⚪ ⊗ 

PEVA ⚫ ⊕ ⚫ ⚫ 
MKS ⚪ ⚫ ⚫ ⚫ 
Raw coverage 0.342 0.287 0.324 0.195 
Unique coverage 0.082 0.057 0.068 0.045 
Consistency 0.872 0.853 0.912 0.826 
Overall solution coverage 0.683 

   

Overall solution consistency 0.843 
   

Note: ⚫ = presence of condition; ⊗ = absence of condition; ⊕ = moderate presence of condition; ⚪ = condition not important (can be either 
present or absent). IIP = Institutional Isomorphic Pressures; EIA = ESG Information Asymmetry; PEVA = Perceived ESG Value Attribution; MKS 
= Market Knowledge Sophistication. 

 
The fsQCA results identify four distinct configurational pathways to high sustainable investment behaviors, 

with the overall solution demonstrating strong coverage (0.683) and consistency (0.843). Path 1 combines strong 
institutional pressures, positive value attribution, and either low information asymmetry or high knowledge 
sophistication (information asymmetry not important in this configuration). Path 2 combines strong institutional 
pressures, low information asymmetry, moderate value attribution, and high knowledge sophistication. Path 3 
combines strong institutional pressures, positive value attribution, and high knowledge sophistication, with 
information asymmetry not important in this configuration. Path 4 combines low information asymmetry, positive 
value attribution, and high knowledge sophistication, with institutional pressures not important in this 
configuration. 

These configurational findings provide important insights regarding the equifinality that characterizes ESG 
integration within Vietnam's financial ecosystem. Multiple distinct pathways lead to sustainable investment 
outcomes, with different combinations of institutional, informational, perceptual, and knowledge factors collectively 
producing similar results. This configurational perspective complements the variance-based PLS-SEM analysis by 
highlighting how different causal combinations can substitute for one another in producing sustainable investment 
behaviors. 

Simple slope analysis was conducted to visualize the moderation effect of market knowledge sophistication on 
the relationship between ESG information asymmetry and perceived ESG value attribution. This analysis 
examined the relationship at different levels of market knowledge sophistication (±1 standard deviation from the 
mean). At low knowledge sophistication (-1 SD), information asymmetry demonstrates strong negative effect on 

value attribution (β = -0.534, p < 0.001). At high knowledge sophistication (+1 SD), information asymmetry 



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demonstrates substantially weaker negative effect on value attribution (β = -0.190, p < 0.01). This pattern confirms 
that higher knowledge sophistication buffers the negative impact of information challenges on sustainability value 
perceptions, highlighting the importance of investor expertise in navigating information-constrained 
environments. 
 

5. Discussion of Research Results and Conclusions 
This study yields significant insights into the complex determinants of ESG integration within Vietnam's 

emergent sustainable finance ecosystem. By synthesising institutional theory, stakeholder theory, and behavioural 
finance perspectives, the research elucidates how institutional isomorphic pressures, ESG information asymmetry, 
perceived ESG value attribution, and market knowledge sophistication collectively shape sustainable investment 
behaviours among institutional investors operating within Vietnam's financial markets. 

The structural model results demonstrate robust support for all hypothesised relationships. The significant 
positive influence of institutional isomorphic pressures on both perceived ESG value attribution (H2) and 
sustainable investment decision-making behaviours (H1) aligns with institutional theory's emphasis on how 
organisational practices are shaped by normative pressures, social expectations, and legitimacy considerations 
beyond purely economic rationality (DiMaggio & Powell, 1983). Coercive, mimetic, and normative institutional 
forces collectively influence ESG integration within Vietnam's financial ecosystem, consistent with previous 
research documenting institutional impacts on sustainable practices (Matten & Moon, 2008). This empirical 
evidence extends institutional theory applications to emerging market sustainable finance contexts, demonstrating 
how institutional forces shape ESG integration within transitional economic environments. 

The significant negative influence of ESG information asymmetry on both perceived ESG value attribution 
(H3) and sustainable investment decision-making behaviours (H4) corroborates previous research identifying 
information challenges as critical barriers to effective ESG integration (Cheng et al., 2014). These findings align 
with stakeholder theory perspectives emphasising how information quality influences investor ability to effectively 
evaluate organisational relationships with diverse stakeholders (Freeman et al., 2010). The particularly strong 

negative relationship between information asymmetry and value attribution (β = -0.362) highlights how 
information challenges fundamentally inhibit investor recognition of sustainability's financial materiality, 
consistent with previous research on ESG information processing (Crifo et al., 2015). 

The significant positive influence of perceived ESG value attribution on sustainable investment decision-
making behaviours (H5) supports behavioural finance perspectives emphasising how investor perceptions and 
cognitive frameworks shape investment decisions (Hirshleifer, 2001). This finding aligns with research 
documenting the importance of perceived financial materiality in driving mainstream ESG integration (Amel-
Zadeh & Serafeim, 2017). The substantial effect size of this relationship (f² = 0.172) indicates that value perceptions 
represent critical determinants of operational sustainable investment practices, highlighting the importance of 
developing cognitive frameworks that effectively recognise sustainability's financial implications. 

The significant mediation of perceived ESG value attribution in the relationships between both exogenous 
variables and sustainable investment behaviour (H6, H7) provides important insights regarding the mechanisms 
through which institutional and informational factors influence operational ESG integration. These mediation 
findings indicate that institutional pressures and information environments primarily influence sustainable 
investment behaviours by shaping how investors perceive the financial materiality of sustainability considerations. 
This perceptual mediation mechanism aligns with cognitive institutional perspectives emphasising how 
institutional forces shape organisational cognition and interpretation processes (Glynn & Raffaelli, 2013). 

The significant moderating effect of market knowledge sophistication on the relationship between ESG 
information asymmetry and perceived ESG value attribution (H8) demonstrates how investor capabilities influence 

responses to information challenges. The positive interaction coefficient (β = 0.172) indicates that higher 
knowledge sophistication reduces the negative impact of information asymmetry on value attribution, consistent 
with research emphasising how expertise enhances information processing capacity in complex decision 
environments (Meehan et al., 2006). Simple slope analysis further illuminates this moderation effect, demonstrating 
substantially stronger negative impact of information asymmetry at low knowledge levels compared to high 
knowledge levels. 

Multi-group analysis reveals important contingencies across investor categories. Information asymmetry more 
strongly affects smaller organisations with limited resources for sophisticated ESG assessment, aligning with 
resource-based perspectives (Barney, 1991). Similarly, the significantly stronger negative impact of information 
asymmetry for domestic investors compared to foreign investors highlights how international exposure enhances 
organisational capacity to navigate information challenges. 

The fsQCA results identify four distinct configurational pathways to high ESG integration, demonstrating 
equifinality in sustainable investment evolution. This configurational perspective aligns with complexity theory 
approaches emphasising how multiple causal pathways can lead to similar organisational phenomena (Fiss, 2011). 
The findings particularly highlight potential substitutability between favourable information environments and 
high knowledge sophistication when combined with appropriate institutional and perceptual factors. 

These findings have significant implications for institutional theory applications to sustainable finance. While 
supporting institutional perspectives on how organisational practices are influenced by social expectations and 
legitimacy considerations (DiMaggio & Powell, 1983), they also highlight limitations of purely institutional 
explanations. Information environments and cognitive factors demonstrate substantial independent influences on 
sustainable investment behaviours, supporting development of integrated theoretical frameworks that synthesise 
institutional perspectives with informational and cognitive approaches. 

For stakeholder theory applications, the empirical evidence supports perspectives emphasising how 
organisational relationships with diverse stakeholders influence financial performance (Freeman et al., 2010). 
However, significant challenges exist in operationalising these stakeholder considerations within investment 
frameworks, particularly in information-constrained environments. These findings suggest practical advancement 



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of stakeholder theory applications requires substantial improvements in sustainability information environments, 
particularly in emerging markets with less developed disclosure practices. 

For policymakers and regulators, the findings highlight the critical importance of developing robust 
sustainability disclosure frameworks to facilitate effective ESG integration. Regulatory interventions can 
effectively promote sustainable investment through both direct compliance requirements and normative 
expectations regarding ESG consideration. Investor education initiatives are vital for enhancing capability for 
effective sustainability assessment, particularly given knowledge's moderating role in reducing negative 
information asymmetry effects. 

For institutional investors, the fsQCA results identifying multiple configurational pathways to effective ESG 
integration provide strategic insights on approaches organisations might adopt based on their specific contexts and 
capabilities. Developing organisational expertise regarding sustainability assessment and financial materiality 
pathways is particularly critical for smaller and domestic investors facing greater information challenges. 

Despite its contributions, this research has limitations including cross-sectional design limiting causal 
inference, focus exclusively on Vietnam potentially limiting generalisability, and reliance on perceptual measures 
for certain constructs. Future research directions include investigating specific mechanisms through which 
institutional pressures translate into operational ESG integration practices, examining different ESG information 
types and their relative influence on investment decisions, and exploring knowledge development processes within 
investment organisations. 

In conclusion, this research contributes to sustainable finance literature by developing and empirically testing 
an integrated theoretical framework examining ESG integration determinants within Vietnam's emergent financial 
ecosystem. The findings provide valuable theoretical insights regarding the complex determinants of ESG 
integration while offering practical guidance for stakeholders navigating Vietnam's evolving sustainable finance 
landscape. 
 

Acknowledgments: 
I would like to express my sincere gratitude to Dr. Hoang Vu Hiep for his invaluable guidance and inspiration 

throughout this research. His expertise, insights, and unwavering support have been instrumental in shaping the 
direction and quality of this study. I am deeply appreciative of his generosity in sharing his time, knowledge, and 
network, which have greatly contributed to the success of this research. His mentorship and commitment to 
academic excellence have not only enriched the quality of this work but have also had a profound impact on my 
personal and professional growth. 
 

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