The Impact of Sustainable Development on Financial Performance: Listed Companies in Vietnam

Abstract

n the context of increasing pressure from stakeholders regarding social and environmental responsibilities, sustainable development (SD) has become a strategic trend among businesses in Vietnam. This study applies the Difference-in-Differences (DiD) method to evaluate the impact of SD on the financial performance of 147 listed companies during the period 2016–2024, with the SD group identified based on the 2020 VCCI sustainable business ranking. The results show that, after being recognized as sustainable, the ROA and ROE of these firms tend to decline, and the SD variable is not statistically significant. Meanwhile, internal financial factors such as the equity-to-total assets ratio (EAR) and the quick ratio (QR) have a positive impact on ROA. The study provides empirical evidence from the Vietnamese context and offers managerial implications for selecting the appropriate timing and approach to implementing SD strategies.