The impact of ESG investing on corporate profitability: Evidence from publicly-owned enterprises in emerging markets

Journal title ECONOMIA PUBBLICA
Author/s Minh Vinh Vo, Thuy Vi Le, Cao Ky Anh Dang, Thanh Vinh Nguyen
Publishing Year 2026 Issue 2025/3
Language English Pages 36 P. 347-382 File size 219 KB
DOI 10.3280/EP2025-003002
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This study investigates the influence of ESGlinked investment instruments, specifically Green Financing and Socially Responsible Investing (SRI) on commercial profitability of publiclyowned enterprises (POEs) in emerging markets. The authors examine the moderating part of Regulatory Framework Strength in these connections predicated in Legitimacy Theory and Institutional Theory, the exploration seeks to determine whether sustainable finance strategies can meaningfully enhance financial performance under varying institutional conditions. Employing a quantitative exploration design, the authors distributed an online check via Google Forms using a 5point Likert scale, performing in 385 valid responses from five stakeholder groups directly involved in ESGrelated financial opinions across emerging markets. The retrogression analysis reveals that Green Financing exerts the strongest influence on commercial profitability (ß = 0.68), followed by SRI essentials (ß = 0.62). Furthermore, Regulatory Framework Strength moderates the connections between Green Financing and profitability (ß = 0.54), and between SRI and profitability (ß = 0.65). The authors affirm that their findings give new perceptivity into the effectiveness of ESG investment strategies in emerging markets, an area frequently overlooked in mainstream ESG converse. By integrating empirical substantiation with theoretical perspectives, this study underscores the critical moderating part of regulatory strength and contributes to bridging the gap between sustainability practices and profitability issues of POEs in under regulated economies.

Keywords: corporate profitability of POEs, emerging markets, green financing, socially responsible investing, regulatory frameworks

Jel codes: G30, L32

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Minh Vinh Vo, Thuy Vi Le, Cao Ky Anh Dang, Thanh Vinh Nguyen, The impact of ESG investing on corporate profitability: Evidence from publicly-owned enterprises in emerging markets in "ECONOMIA PUBBLICA " 3/2025, pp 347-382, DOI: 10.3280/EP2025-003002