REGRESSION MODELS FOR DETERMINING FOREIGN OWNERSHIP RATIO IN VIETNAMESE LISTED FIRMS: THE ROLE OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) SCORES

Abstract

This paper proposes regression models to investigate the impact of ESG
scores and other factors on foreign ownership in Vietnamese listed firms. ESG
scores, as a valuable tool for measuring a firm's environmental, social, and
governance performance, provide foreign investors with insights into
investment risks and potential, enabling them to determine optimal
ownership levels for maximising returns. This study contributes to the
growing body of research on the role of ESG scores in foreign ownership by
developing models to explore the relationship between ESG scores, other
relevant factors, and foreign ownership. The authors address the endogeneity
issue between firm-specific control variables and ESG scores using a 2SLS-IV
approach. Our proposed models serve as a foundation and reference point for
future research examining the influence of ESG scores and other factors on
foreign ownership in Vietnamese listed firms.