Foreign Direct Investment and the vulnerability of domestic migrant workers in FDI areas in Vietnam and some policy implications

Tóm tắt

In the context of globalization and the increasing demand for sustainable development, governance in line with Environmental, Social, and Governance (ESG) standards has become an inevitable trend in the operations of major financial institutions, especially commercial banks. This study aims to assess the impact of ESG factors on liquidity risk in Vietnam's banking system, thereby determining the role of sustainable management in stabilizing banks' financial stability. Based on data collected from Vietnamese commercial banks during 2015–2024, a panel regression model was used to examine the relationship between the overall ESG score and liquidity risk and to analyze the performance of each environmental, social, and governance component separately. The results show that banks with high ESG performance tend to have lower liquidity risk, reflecting their ability to manage capital and assets more effectively, especially during periods of economic volatility. In particular, the governance factor plays the most prominent role in reducing liquidity risk, followed by the social factor, while the environmental factor has a positive effect but at a slower rate, contributing to the study to supplement empirical evidence on the benefits of ESG in the banking sector in