Thesis Public Defense | VNP30 - Hồ Ngọc Linh

The impact of ESG practices on GRDP growth in Vietnam at the provincial level

Student: Hồ Ngọc Linh, VNP-30

Supervisor: Dr. Đặng Lê Hoa

Abstract:

 Vietnam’s economy is growing fast and the regional disparity is large. This study investigates the impact of Environmental, Social, and Governance (ESG) practices on economic growth, measured by the growth in Gross Regional Domestic Product (GRDP) per capita across Vietnamese provinces. This study is conducted using a panel dataset analysis of 63 Vietnamese provinces over the period 2019-2023. The study applies Principal Component Analysis (PCA) to construct composite ESG indices from multiple standardized indicators and employs fixed-effects panel regressions to estimate their effects on economic performance.
The empirical findings reveal that the three ESG pillars exert heterogeneous and asymmetrical impacts on economic growth. The Social pillar shows a strong, positive, and statistically significant effect on GRDP, with evidence of increasing returns. it indicates improvements in health, education, and social protection generate compounding economic gains. The Environmental pillar exhibits a small negative short-run effect. It suggests that provinces may face transitional adjustment costs associated with pollution control, regulatory compliance, or resource-management efforts. Meanwhile, the Governance pillar is statistically insignificant in the short term, consistent with the slow-moving nature of institutional reforms and their predominantly long-term influence. The results highlight that economic growth alone does not ensure sustainable development. To sustain long-term growth, provincial governments should strategically reinvest GRDP gains into social infrastructure, environmental protection, and institutional capacity. Embedding ESG principles into provincial planning provides a viable pathway toward narrowing regional disparities and promoting inclusive, sustainable transformation across Vietnam. 

Keywords: ESG practices, GRDP per capita growth, panel data analysis, Vietnamese provinces
JEL Classification Codes: C23, F43, O11, O44, Q56