Doing Well by Doing Good? Green Innovation-Led Financial Performance of Vietnamese Listed Manufacturing Firms

This study examines whether green innovation is associated with superior profitability among Vietnamese listed manufacturing firms. Using a balanced panel of 86 firms listed on HOSE and HNX over 2016-2024 (774 firm-year observations), we construct five disclosure-based green innovation indices—green management, green process, green product, green technology, and green marketing—via an entropy-weighting approach applied to annual-report information. We estimate panel regressions with firm and year fixed effects, cluster-robust standard errors at the firm level, and additional pooled OLS, random-effects, and feasible GLS specifications as robustness checks. Across estimators, all five green dimensions exhibit positive and statistically significant associations with return on assets, indicating that firms with stronger green-oriented practices tend to report higher profitability. The estimated links are economically more pronounced for green process and green product innovation, consistent with efficiency and product-differentiation channels. Liquidity is positively related to profitability, while leverage is negatively related, and firm age shows limited explanatory power. The findings suggest that, in Vietnam’s listed manufacturing sector, green upgrading is more consistent with value creation than with a pure compliance-cost narrative, and that policy efforts to improve disclosure comparability and verification can help channel capital toward firms with substantive green execution.