Implication of ESG-related factors with social and economic intermediary variables affecting investment decisions of investors on the Vietnamese stock market

Abstract

This research delves into the ramifications of Environmental, Social, and Governance (ESG) factors, alongside the moderating influences of self-efficacy and investment terms, on the stock investment decisions made by individual investors in Vietnam. The impetus for this research arises from the imperative to attain a deeper comprehension of how psychological constructs shape investment behaviors, with the aim of furnishing pertinent insights that could enhance investment efficacy. The primary aim of the study is to ascertain the degree to which these two factors exert influence over investment decisions, evaluated through the lenses of effectiveness and participation. This endeavor seeks to elucidate the existing research gap concerning the ramifications of psychological factors on investment choices within the Vietnamese context. The methodological framework employed in this research incorporates a variance-based structural equation modeling (SEM) technique to scrutinize data obtained from 400 individual investors, facilitated by the utilization of SPSS and Smart PLS 4.0 software. This methodological approach enables a comprehensive and precise evaluation of the effects of ESG factors, as moderated by investment terms and investment awareness, on investment decision-making processes. The findings of this research indicate that ESG factors, moderated by investment term and investment awareness, significantly influence the investment decisions of individual investors in Vietnam. The implications derived from this study hold considerable significance for individual investors as well as fund managers, enhancing their awareness regarding the ESG factors and moderating variables that impact investment decisions and optimize investment strategies. Furthermore, the study proffers avenues for subsequent research into additional moderating variables that may also affect investment decision-making processes.