Abstract
The purpose of this research is to investigate the relationship between green investment and firm value, and most importantly, to analyze the moderating influence of audit firm industry specialization among listed real estate and construction companies in Vietnam, where there are significant concerns regarding information asymmetry and issues of “greenwashing.” Using a panel data set that covers 1,285 firm-year observations from 2015 to 2024, the research utilizes a Fixed Effects Model (FEM) with a variable interaction term and Driscoll-Kraay standard errors, as well as robustness checks (System GMM used to test for endogeneity, and quantile regression to detect heterogeneous effects).
From the results, it is shown that the phenomenon of green investment, on its own, has no significant linear effect on firm value and is consistent with market doubt; moreover, it is an inverted U-shape relationship. More importantly, the main result shows that the positive effect of green investment on firm value only achieves statistical significance when the indirect validation of an industry-savvy auditor is “activated”; this effect is largest for undervalued firms.
From this study, we find that in an information-asymmetric system, the strength of green signals is conditionally attached to the credibility of an external validation mechanism. These results add pioneering empirical evidence in Vietnam on the role of auditing quality in validating the worth of green signals. In a practical sense, this means that to create value, managers need to align green investment with a strategic selection of a specialist auditor to ensure that sustainability pledges become commercial entities on a balance sheet-wide footing, and to signal to decision-makers the need to increase transparency in the audit market.