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THE EFFECTS OF BUSINESS EFFICIENCY TO DISCLOSE
INFORMATION OF SUSTAINABLE DEVELOPMENT: THE CASE OF
VIETNAM
Nguyen Van Linh1
Dang Ngoc Hung2+
Dang Thai Binh3
Vu Thi Thuy Van4
Nguyen Thi Mai
Anh5
1,2Hanoi University of Industry, Vietnam
3Vietnam institute of Indian and Southwest Asian Studies, Vietnam
Cademy of Social, Vietnam
4,5National Economics University, Vietnam.
(+ Corresponding author)
ABSTRACT
Article History
Received: 15 February 2019
Revised: 18 March 2019
Accepted: 23 April 2019
Published: 8 May 2019
Keywords
Information disclosure
Business efficiency
Sustainable development
Social responsibility
Financial leverage
Vietnam.
JEL Classification:
G02; G03; G04.
This paper studies the impact of business efficiency on the level of sustainable
development information disclosure of Vietnamese enterprises by using path
structure model with the data of 294 enterprises listed on the stock market in 3
years from 2015 to 2017. Research results show that the level of sustainable
development information disclosure of Vietnamese enterprises listed on the stock
market is still quite low. This study has identified factors that positively influence
the level of sustainable development information disclosure including business
efficiency, firm size, Big4 and the number of members of the board of directors. The
negative influencing factors with the level of sustainable development information
disclosure are financial leverage and business sector. Based on the research results,
the study propose some recommendations to improve the level of sustainable
development information disclosure of enterprises in Vietnam: (i) promote
disclosure of sustainable development for their benefit to businesses; (ii) supplement
and improve the current legal system in Vietnam to create a solid legal basis for the
implementation of sustainable development information disclosure.
Contribution/ Originality: The contribution of this study is to apply path structure model with the data of 294
enterprises listed on the Vietnam stock market in 3 years from 2015 to 2017. This study has identified factors that
positively influence the level of sustainable development information disclosure including business efficiency, firm
size, Big4 and the number of members of the board of directors. The negative influencing factors with the level of
sustainable development information disclosure are financial leverage and business sector.
1. INTRODUCTION
In the 1990s, enterprises studies began to care about the inclusion of social and environmental aspects and
trends in enterprises' reports, while in the past the public only interested in information of financial statements.
How to develop the economy but not harm the environment? That is the big question that must be answered and
the solution is sustainable development. Sustainable development is currently an indispensable trend in the world
that large organizations such as the United Nations, European Union, and developed countries such as the US, UK,
Germany, and so on are interested in and implement. However, in developing countries and underdeveloped
countries, small enterprises are concerned about economic growth instead of the implementation of social
Asian Economic and Financial Review
ISSN(e): 2222-6737
ISSN(p): 2305-2147
DOI: 10.18488/journal.aefr.2019.94.547.558
Vol. 9, No. 4, 547-558
© 2019 AESS Publications. All Rights Reserved.
URL: www.aessweb.com
Asian Economic and Financial Review, 2019, 9(4): 547-558
548
© 2019 AESS Publications. All Rights Reserved.
responsibility or towards sustainable development because of some limitations. Therefore, it is necessary to have
empirical studies, surveys, and assessments on the relationship between business efficiency and sustainable
development.
Research on the relationship between business efficiency and sustainable development are variety which
attracts the attention of many leaders, managers, and researchers in many countries around the world. The impact
of sustainable development information disclosure on business efficiency is different between the study of
McWilliams and Siegel (2000) which investigated 524 enterprises in the US and the research of Nelling and Webb
(2009) which investigated more than 600 US enterprises. Burhan and Rahmanti (2012) use data of 32 companies
listed on the Indonesian stock market from 2006 - 2009 showed a positive relationship between business efficiency
and sustainable development information. However, there are also studies that have not found the relationship
between business efficiency and sustainable development information disclosure such us (Gnanaweera and Kunori,
2018) with the investigation of 85 enterprises listed on the Tokyo and Japan stock exchanges from 2008 to 2014. In
sum, there have been many studies on the relationship between sustainable development information and business
efficiency. However, there is still many controversy about the outcome of this relationship.
In Vietnam, the issue of sustainable development is a very new issue with little enterprises’ concern. In 2015,
when Ministry of Finance issued Circular 155, on information disclosure on the stock market, reporting of
sustainable development was really interested in many researchers. However, the studies in Vietnam on this issue is
only explanatory studies which clarify the report on the sustainable development and lack of empirical studies.
Previous studies mainly on social responsibility information, for example (Hoang et al., 2018) which investigate the
impact of diversity in the board of directors on the announcement of social responsibility of enterprises listed in
Vietnam stock market from 2008 to 2010. Research by Ha et al. (2019) which investigated listed companies on the
Vietnamese stock exchange and indicated the factors affecting social information disclosure to business efficiency.
Research on the relationship between social responsibility and financial efficiency by Trang and Yekini (2014)
investigated the 20 largest enterprises listed on Hanoi and Ho Chi Minh Stock Exchange from 2010 to 2012 and
the results show that there is a relationship between social responsibility and financial efficiency.
Thus, base on the literature review of international and domestic studies, the authors found the gap of previous
studies that are: (i) only focused on influencing factors as well as the level of social responsibility information
disclosure instead of sustainable development information disclosure; (ii) the relationship between the social
responsibility information disclosure and business efficiency are different. Therefore, it is necessary to expand the
research on the effect of business efficiency on sustainable development information of companies listed on the
Vietnamese stock market. (iii) new points in this study are that business efficiency was an intermediate variable,
structural regression estimation will result in a more comprehensive and complete result, with firm size large
enough in the period of 2015-2017.
2. THEORETICAL BASIC
2.1. Some Concepts
According to Brundtland's report presented at the World Environment Development Committee in 1987,
sustainable development is the development that meets the needs of the existing businesses but not affect the
development of future generations. This is considered as one of the most commonly used and acknowledged
concepts.
Sustainable development report is the measurement, information disclosure and is responsible for explaining to
internal and external stakeholders on the business performance that is towards the sustainable development goals
of enterprises.
Sustainable development information disclosure of enterprises includes detailed information disclosure of
environment, energy, human resources, products and community-related issues (Hackston and Milne, 1996).
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Vietnam also has many businesses which are aware of the importance of information disclosure and transparency of
sustainable development information. Because of many different reasons, this information has been published in the
Sustainable Development Report, annual report and on the website of the enterprise. Through sustainable
development information disclosure, businesses can have great opportunities in attracting investment capital from
socially and environmentally responsible investors, reinforcing the confidence of stakeholders in enterprises. The
information disclosure of companies listed on the stock market must ensure "full, accurate and timely". Sustainable
development information disclosure is acknowledged as a means to minimize information asymmetry and then,
helps investors strengthen monitoring role for enterprises.
2.2. Theoretical Framework
Sustainable development information disclosure is very useful for stock market members. However, in terms of
theoretical basis, the research in this field has not yet agreed to use any general theory; many different theories
were used to verify the level of sustainable development information disclosure. The theory that is frequently used
are theory of agency, signalling theory, Proprietary Cost Theory, and stakeholder theory.
Theory of agency identifies a representative relationship as a contract whereby one or many people commit to
others (representatives) to perform some services on their behalf (Jensen and Meckling, 1976). In the theory of
agency, the owner is a shareholder and the managers are representatives of the shareholders. The relationship
between shareholders and representatives will incur a loss due to the difference between the management
representative of the enterprise and the shareholders. Disagreements between owners and representatives can be
limited by providing detailed, transparent information about the company. Several factors related to theory of
agency are firm size, financial leverage, profitability.
Signaling theory indicates that asymmetric information between businesses and investors leads to an adverse
choice for investors. To avoid this situation, enterprises voluntarily disclose sustainable development information
and give positive signals to the market (Watts and Zimmerman, 1990). According to this theory, the larger the
enterprise is, the more asymmetric information is. In addition, the enterprise with higher profitability tends to
disclose more information to provide positive signals for investors about growth prospects, thereby positively
impact on stock prices of enterprises.
Proprietary cost is seen as an important limitation of the sustainable development information disclosure and
disclosure more information to investors can damage the company's competitive in the market. Darrough (1993)
argued that firms that restrict information disclosure to avoid reducing their competitive although capital
mobilization costs may be higher. Small enterprises are very sensitive, if the more sustainable development
information is disclosed, the more detrimental the competitive advantage of the company in the market will be.
Previous studies also consider costs derived from gathering and preparing information as an obstacle to voluntarily
disclose more information. According to this theory, scale and profitability encourage companies to disclose more
information to reduce these costs.
The stakeholder theory has many applications including applications in the field of accounting (Freeman, 2010).
According to this, the success of a company depends on the cooperation of stakeholders, because they provide
tangible or invisible resources to ensure the existence of any company. These resources can be financial resources
(shareholders), operating environment and public services (government agencies), labor (staff). Therefore, the
company is responsible for providing information that explains the company's operations to related parties, instead
of providing information to the owner only.
Thus, to what extent the enterprises disclose sustainable development information depend on the measurement
of enterprises' managers on costs and benefits related to the transmission of this information to users’ information,
importantly the capital investors. The application of agency theory in the framework of information economic
theory is more appropriate, in order to assess more deeply the phenomenon and behavior of enterprises in
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sustainable development information disclosure. Because, in enterprises that have a separation between capital
ownership and management that mean a problem of representative and asymmetric information will be exist, thus
Sustainable development information disclosure must be implemented.
3. RESEARCH METHODOLOGY
3.1. Research Hypothesis
Based on an overview of the study, inheriting previous studies, the basic presented theories, in this study, the
authors made the following research hypotheses as below:
Business efficiency: The higher the business efficiency is, the more willing the enterprise is to devote financial
resources to the development of a sustainable environment that they are operating in, Said et al. (2009) believed
that there is a close and positive relationship between profit and sustainable development information
disclosure because it is believed that high-profit enterprises will actively publish information to show the role of
enterprises in the welfare of the community and confirming the existence of the business. However, according
to Burhan and Rahmanti (2012) it is said that there is a negative relationship between business efficiency and
sustainable development information disclosure, while Gnanaweera and Kunori (2018) assumed that there is no
relationship between business efficiency and sustainable development information disclosure. Since then, the
authors hypothesize that:
Hypothesis H1: There is a positive and statistically significant relationship between business efficiency (ROA)
and the level of sustainable development information disclosure.
Enterprise size: Large-scale enterprises are always confident about the development prospects of enterprises so
they will often voluntarily publish more sustainable development information to create transparency in
information, avoiding examinations and inspections of state agencies, as well as increasing the value of
enterprises in the eyes of the community and investors. Jennifer Ho and Taylor (2007) found that large-scale
companies publish more financial and non-financial information than small companies. On the other hand, there
are many studies showing that the scale of enterprises also positively affects the business efficiency according to
Kakani et al. (2001); Ha et al. (2019). Since then, the authors hypothesize that:
Hypothesis H2a: There is a positive and statistically significant relationship between business efficiency (ROA) and
the level of sustainable development information disclosure.
Hypothesis H2b: There is a positive and statistically significant relationship between firm size and business
efficiency (ROA).
Financial leverage: According to Platonova et al. (2018); Hung et al. (2018) and Branco and Rodrigues (2008)
companies with high financial leverage often tends to reveal more information to creditors, suppliers and
investors in order to provide more assurance to the parties about their financial obligations. However, there is a
study of Jensen and Meckling (1976); Nelling and Webb (2009) which found a negative correlation between
financial leverage and the level of sustainable development information disclosure, they believed that the higher
financial leverage firms have, the higher probability of default is, so they will reduce information disclosure. On
the other hand, many studies have shown that financial leverage has a negative relationship with business
efficiency according to Margaritis and Psillaki (2010). Since then the authors hypothesize that:
Hypothesis H3a: There is a negative and statistically significant relationship between financial leverage and the
level of sustainable development information disclosure.
Hypothesis H3b: There is a negative and statistically significant relationship between financial leverage and business
efficiency (ROA).
The size of the Board of Director: This factor affects sustainable development information disclosure. Barako
(2007) found the relationship between the size of BOD and the level of sustainable development information
disclosure. There are two perspectives related to this relationship. The first is that the small size of the BOD will
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make the information sharing among members and the processing of information easier and faster. However, the
second point of view is that the Board of Directors with a larger number of members has a broader knowledge to
carry out the advisory tasks, thus the implementation of supervision and advising will be better and sustainable
development information will be disclosed more. Thus, the authors hypothesize that:
H4: The size of the Board of Director has a positive and statistically significant with the level of sustainable
development information disclosure
Chairman of the Board of Directors cum General Director: According to theory of agency, plurality will
decrease the role of control and increase the ability to negotiate bonus for senior managers. In addition, the
person has plurality easily dominate power and act opportunistically and harmfully to other shareholders. The
study of Fathi (2013) argues that the chairman of the Board of Directors cum CEO has a negative impact on the
level of sustainable development information disclosure, which means there is a tendency to hide adverse
information. However, the results of the study of Ho and Wong (2001) do not show that the separation of these
two positions affects the level of information disclosure. According to agency theory, there is always a conflict
between owner and operator. Chairman of the Board represents the owner, executive director represents the
executive. Therefore, the role separation is essential for business operations. The healthy environment and
properly enforced control will promote information transparency. Although Vietnamese law does not force
companies to separate roles between the chairman and the executive director, however, the separation shows a
clearer mechanism. Today, some large companies also voluntarily separate the roles of these two positions and
publicly announce to the shareholders. Since then the authors hypothesize:
H5: Chairman of the Board of Directors cum General Director has a positive and statistically significant with the
level of sustainable development information disclosure.
Independent audit: Although the preparation and presentation of financial statements are the responsibility of the
manager, however, the reputation of audit company can significantly affect sustainable development
information disclosure. Auditing company is an indispensable part of the financial statements of listed
companies. Previous empirical studies have shown that the quality of auditing companies positively affects the
level of sustainable development information disclosure of enterprises. The study of Vu (2012) indicated that
the relationship between the size, reputation of the auditing company and the level of sustainable development
information disclosure. Since then the authors hypothesize:
H6: Independent audit has a positive and statistically significant with the level of sustainable development
information disclosure.
Business sector: Business sector is an important variable that explains the diversity of implementation level and
sustainable development information in many studies (Jitaree, 2015); (Khlif et al., 2015). According to Deegan and
Gordon (1996) some industries may have a strong impact on the relationship between information. For example,
the mining and oil and gas industries are more likely to publish social and environmental information than other
industries. Moreover, Wallace and Naser (1995) explained that the reason for the difference in SR in some sectors is
that each individual company must avoid being penalized for not publishing some of their industry-related issues.
Their report may show some special issues that other companies are not required to publish. On the contrary,
Owusu-Ansah (1998) argues that the relationship between sustainable development and industry characteristics can
be discovered, and shows some reasons why the practice of disclosing sustainable development of public The
company is diversified that is not the same in the nature of the work involved, the type of product line or the variety
of products and industry regulations. Since then the authors hypothesize:
H7: Enterprises in the manufacturing industry have a positive relationship with statistical significance with the level
of sustainable development information disclosure.
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3.2. Research Model
Based on the literature review and research hypotheses, the authors suggest the following research model
Figure 1:
Figure-1. Model to study the effect of business efficiency on the level of sustainable development information disclosure.
Source: Calculation of authors based on software Stata.
Based on the review studies, the authors performed measuring the level of information disclosure (DISCS) in
the order as follows:
Step 1
: Identify indexes, authors based on Circular 155/2015, consisting of 6 main categories, and 25 major
indexes, will be assigned a value of 1 if declared, and 0 if not declared.
Step 2
: Determine the weight of each index (qualitative and quantitative aspects, form), according to the following
criteria Table 1:
Table-1. The weight of each index.
Structure
Content
Weight
Content
The adequacy
0.45
Confidence level
0.40
Presentation
Report form
0.05
Report structure
0.05
Interactivity of the report
0.05
Step 3:
Based on the level of information provided in Step 2, assess the level of information disclosure at the
following five levels Table 2:
Table-2. The level of information disclosure.
Degree evaluation (M)
1 (Poor)
2 (Average)
3 (Fair)
4 (Good)
5 (Excellent)
Step 4:
Calculate the average level of disclosure in the annual report, the disclosure index is calculated as follows:
In which:
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DISCSj: level of information disclosure in the enterprise's annual report j;
Mij: Level of assessment from level 1-5 of index i in the enterprise's annual report j;
dij = 1 if the information factor i is published in the enterprise’s annual report j;
dij = 0 if the information element i was not published;
nj: number of informational factors that can be declared at enterprise j (n ≤ 25).
Variables in the research model and its measurement are shown in Table 3:
Table-3. Variables in the research model.
Variable
ID
Measurement
Direction of impact
Business Efficiency
ROA
Rate of profit after tax / Asset
+
Size of firm
SIZE
Logarithm (total assets)
+
Financial leverage
LEV
Debt / Total Assets
-
Number of Board members
NUMBER
Total number of board members
+
Chairman & General Director
DUAL
1- Concurrently
0 - No concurrently
+
Independent auditing
BIG4
1- Independent auditing company
belonging to Big4
0- Independent auditing company
not belonging to Big4
+
Business sector
INDUSTRY
1- if the registered field of business of
the firm is belonging to the industry
sector,
0 - if elsewhere.
+
Source: Own editing.
3.3. Data
In this study, the authors collected data of 294 enterprises listed on Vietnam stock market in 3 years from
2015-2017, so the number of observations is 882. Collected data is calculated into variables in accordance with
research requirements by Excel. Finally, calculated variable data is stored and processed for analysis and
verification through STATA 13.
4. RESEARCH RESULTS AND DISCUSSION
4.1. Research Results
Statistical data Table 4 shows that among enterprises surveyed, enterprises have profitability ratio (after-tax
profit on assets ROA) of 6.6% on average; The average financial leverage ratio of enterprises is 47.8%; Number of
members of the Board lowest was 4 and at most 13 people, an average of 6.23 of each enterprise. In the survey
sample, there were 28.57% of enterprises with the Chairman and General Director. The number of enterprises with
financial statements of Big4 auditing company is 35.71% and the number of manufacturing enterprises accounts for
72.45% of the total research samples.
Table-4. Statistics describe independent variables.
Variables
Number of
observation
Mean
Standard deviation
Minimum value
Maximum value
DISCS
882
35.9005
28.6893
0
98.24
ROA
882
0.0662
0.0902
-0.99
0.72
SIZE
882
28.2002
1.5325
25.58
34.72
LEV
882
0.4784
0.2216
0.01
0.97
NUMBER
882
6.2381
1.6683
4
13
DUAL
882
0.2857
0.4520
0
1
BIG4
882
0.3583
0.4798
0
1
INDUSTRY
882
0.7245
0.4470
0
1
Source: Calculation of authors based on software Stata.
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According to the results of Table 5, The level of sustainable development information disclosure of enterprises
averaged 35.90%, in which 25.87% in 2015, 38.03% in 2016 and 42.80% in 2017. Thus, the level of sustainable
development information disclosure of Vietnamese enterprises have been improved and increased year by year. This
result also shows that enterprises have had an interest in the level of sustainable development information disclosure
and especially after Circular 155 takes effect. However, this result indicates that the level of sustainable development
information disclosure of listed companies in Vietnam stock market is still relatively low compared to requirements
and regulations.
Table-5. Summary table of the level of sustainable development information disclosure by year.
Year
Number of observation
Mean
Standard deviation
Median
2015
294
26.87
28.95
21.02
2016
294
38.03
27.75
37.06
2017
294
42.80
27.06
37.10
Trung bình
35.90
28.69
37.04
Source: Authors calculated from Stata 13.0.
Table 6 shows the correlation coefficients between variables for the purpose of examining the close correlation
between independent variables and dependent variables. At the same time, this result to eliminate factors that may
lead to multicollinearity phenomenon before running the regression model. The correlation coefficient between the
independent variables in the model has no pairs with absolute values greater than 0.8. In the correlation coefficient
matrix between the independent variables and the dependent variable, the lowest coefficient is -0,3506 between
ROA variable and financial leverage variable (LEV), the highest coefficient is 0.4659 between size of firm variables
(SIZE) and Big4 control variable. Therefore, when using the regression model, it is less likely to encounter the
multicollinearity phenomenon.
Table-6. Correlation matrix.
DISCS
ROA
SIZE
LEV
NUMBER
DUAL
BIG4
INDU STRY
DISCS
1
ROA
0.1475
1
SIZE
0.4105
-0.0991
1
LEV
0.0037
-0.3506
0.4294
1
NUMBER
0.1921
-0.003
0.2801
0.0811
1
DUAL
0.0251
-0.054
-0.0701
0.0496
-0.0858
1
BIG4
0.4207
0.0468
0.4659
0.1208
0.1627
-0.0015
1
INDUSTRY
-0.1375
-0.0501
-0.0797
-0.026
-0.1539
0.0867
-0.1267
1
Source: Authors calculated from Stata 13.0.
Table-7. Multivariate regression results by the structure.
Hypothesis
Structural
Coef.
Std. Err.
z
P-value
H1
DISCS <-
ROA
38.224
9.703
3.94
0.000
H2a
DISCS <-
SIZE
6.569498
0.6843739
9.6
0.000
H3a
DISCS <-
LEV
-18.84806
4.354744
-4.33
0.000
H4
DISCS <-
NUMBER
1.040222
0.5145389
2.02
0.043
H5
DISCS <-
DUAL
4.781448
1.82472
2.62
0.009
H6
DISCS <-
BIG4
14.96268
1.945305
7.69
0.000
H7
DISCS <-
INDUSTRY
-4.670942
1.860842
-2.51
0.012
_cons
-152.708
17.945
-8.51
0.000
H2b
ROA<-
SIZE
0.004
0.002
1.81
0.07
H3b
ROA<-
LEV
-0.154
0.014
-10.84
0.000
_cons
0.035
0.055
0.63
0.526
Source: Authors calculated from Stata 13.0.
Asian Economic and Financial Review, 2019, 9(4): 547-558
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Table 7 shows that business efficiency has an impact on the level of sustainable development information
disclosure with a statistical significance of 5%. Size of firm variable affects positively both business efficiency and the
level of sustainable development information disclosure. Besides, Big4 and the number of members of the board of
directors have a positive influence on the level of sustainable development information disclosure. However,
business sector affects negatively to the level of sustainable development information disclosure.
The results of testing the indicators of the models Table 8 show that the model of measuring the effect of
business efficiency on the level of sustainable development information disclosure satisfies the control criteria of the
estimated model, the level of explanation of factors is 36.6%.
Table-8. Results of tests.
Fit Indexes
Standard
Result
X2 (df) (Prob > chi2)
> 0.05
0.076
RMSEA
< 0.05
0.036
CFI
> 0.90
0.989
TLI
> 0.90
0.965
SRMR
< 0.05
0.014
CD
0.366
Source: Authors calculated from Stata 13.0.
4.2. Discuss Research Results
Table-9. Summary of results of the research hypothesis.
Hypothesis
Structural
Expected
sign
P-value
Compare
Direction
of impact
Conclusion
H1
DISCS <-
ROA
(+)
0.000
< 0.01
(+)
Accepted
H2a
DISCS <-
SIZE
(+)
0.000
< 0.01
(+)
Accepted
H3a
DISCS <-
LEV
(-)
0.000
< 0.01
(-)
Accepted
H4
DISCS <-
NUMBER
(+)
0.043
< 0.05
(+)
Accepted
H5
DISCS <-
DUAL
(+)
0.009
< 0.01
(+)
Accepted
H6
DISCS <-
BIG4
(+)
0.000
< 0.01
(+)
Accepted
H7
DISCS <-
INDUSTRY
(+)
0.012
< 0.01
(-)
Rejected
H3b
ROA<-
SIZE
(+)
0.07
< 0.1
(+)
Accepted
H3b
ROA<-
LEV
(-)
0.000
< 0.01
(-)
Accepted
Source: Authors calculated from Stata 13.0.
From the results of the research in Table 9 some discussions can be made:
Business efficiency factor gives positive regression results and is statistically significant at 1% to the level of
sustainable development information disclosure, in accordance with the original hypothesis. This result is also
consistent with the study of Said et al. (2009) but in contrast to research Burhan and Rahmanti (2012) and did
not consent to the study of Gnanaweera and Kunori (2018). Thus, business efficiency is a positive factor
affecting the level of sustainable development information disclosure of enterprises.
The size of firm factor is positively related to both business efficiency and level of sustainable development
information disclosure and it is statistically significant at 5% level. This result is consistent with the research
hypothesis. This study is similar to the results of research by Jennifer Ho and Taylor (2007) and Kakani et al.
(2001). Thus, when businesses increase the reasonable scale, they will increase operational efficiency, and it
leads enterprises to strengthen sustainable development information disclosure.
Financial leverage factor is inversely related to both business performance and the level of sustainable
development information disclosure and is significant at 5% level. This result is also consistent with the study
by Platonova et al. (2018); Branco and Rodrigues (2008); Margaritis and Psillaki (2010); Dang et al. (2019).
The number of members of the board of director has a positive impact on the level of sustainable development
information disclosure, this research result is consistent with hypothesis H5. This result is similar to the
research results of Barako (2007) when finding the relationship between the size of members of the Board of
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Directors and the level of sustainable development information disclosure. However, the results of this study
contradict the study by Vu (2012) and Pham and Do (2015). In Vietnam, the operation regulations of listed
companies on the stock market regulate the number of members of the board from 4 - 11 people. These
members are usually major shareholders or represent major shareholders. From the regression results, the
author found that the number of members of the board of directors of each company needs to be consistent with
the scale of operation and specific businesses. Small-scale companies that operate simply need fewer members of
the Board to quickly make decisions. In contrast, large-scale companies will need many members of the Board
to take advantage of the diverse experience and capabilities of their members.
The factor of Chairman and General Director has a positive influence on the level of sustainable development
information disclosure but the results of this study are contrary to the research results by Fathi (2013) and Ho
and Wong (2001). Therefore, hypothesis H5 is accepted.
The regression result of the auditing firm variable in accordance with hypothesis H6. This result shows that
enterprises are audited by Big 4, the level of sustainable development information disclosure is higher. Or the
audit quality of Big 4 audit enterprises is higher and more stable than other enterprises in audit sector. This
comes from the large classification existing in the audit industry in Vietnam and the audit quality of non-Big 4
audit firms (mainly domestic audits) is a remarkable thing to improve the overall quality of auditing and
audited financial statements.
Business has a negative relationship with the level of sustainable development information disclosure. This is
not consistent with the hypothesis H7 which was developed. The results of this study contradict the study by
Deegan and Gordon (1996) and Wallace and Naser (1995). The reason for this result is that in Vietnamese
manufacturing enterprises require more sustainable information disclosure than non-manufacturing sectors
(trade, services, finance). So enterprises have not yet sufficient resources to implement sustainable and
comprehensive development information.
5. CONCLUSION AND RECOMMENDATIONS
Research results show that the level of sustainable development information disclosure of Vietnamese
enterprises listed on the stock market is still quite low. This study has identified factors that positively influence the
level of sustainable development information disclosure including business efficiency, firm size, Big4 and the
number of members of the board of directors. The negative influencing factors with the level of sustainable
development information disclosure are financial leverage and business sector. Based on the research results, the
authors propose some recommendations to improve the level of sustainable development information disclosure of
enterprises in Vietnam:
First, large-scale and efficient businesses need to be encouraged to promote disclosure of sustainable
development for their benefit to businesses. When enterprises publish sustainable development information in
separate annual reports and sustainable development reports to stakeholders, it will enhance the brand of the
business. Besides, it will help businesses attract and retain talented people, build trust and loyalty of consumers and
communities, the support of investors, the credibility of state management agencies, etc. Thereby, it contributes to
making businesses more efficient and growing.
Secondly, the research shows that for enterprises in manufacturing industries, consumer goods, etc which
published information related to environment and products less when comparing among other industries. This
shows that the implementation of sustainable development in a full and true sense is not a simple matter and lie s
within the ability of instant resolution of most companies. It is hampered because of the limitations of awareness,
resource factors, financial resources, technical, highly qualified manpower of Vietnamese enterprises. Therefore, the
enterprises need to develop long-term strategies to apply and publish sustainable development information with
Asian Economic and Financial Review, 2019, 9(4): 547-558
557
© 2019 AESS Publications. All Rights Reserved.
appropriate steps in different stages. Moreover,the enterprises need to have a long-term strategy in developing and
implementing standards.
Third, the Government should continue to supplement and improve the current legal system in Vietnam to
create a solid legal basis for the implementation of sustainable development information disclosure. In addition, the
government needs to strengthen propaganda to raise awareness about sustainable information disclosure and
policies to encourage and support implementation for businesses and organizations.
Funding: This study is funded by The Hanoi University of Industry, Vietnam.
Competing Interests: The authors declare that they have no competing interests.
Contributors/Acknowledgement: All authors contributed equally to the conception and design of the
study.
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