Impacting Green Finance on Sustainable Agricultural Development: Evidence from Vietnam
Copyright © 2026 Lu Phi Nga, Phan Thanh Tam. Published by Nan Yang Academy of Sciences Pte. Ltd.
This is an open access article under the Creative Commons Attribution-NonCommercial 4.0 International (CC BY-NC 4.0) License.
Abstract
The transition toward sustainable agriculture requires substantial financial resources aligned with environmental and social objectives. Green finance has emerged as a critical instrument for mobilizing such resources; however, the mechanisms by which institutional, technological, and market forces shape green finance and translate into sustainable agricultural development remain underexplored, particularly in emerging economies. This study investigates the determinants of green finance and its role in promoting sustainable agricultural development in Vietnam. Using a mixed-methods approach, qualitative interviews with 45 experts in green farm economics and agrarian project financing were conducted first to develop context-specific measurement scales. Subsequently, a large-scale survey of 900 respondents from farm cooperatives, agricultural enterprises, green project participants, and green supply chain actors was conducted. The proposed research model was tested using partial least squares structural equation modeling (PLS-SEM). The results reveal that environmental regulation pressure is the most influential driver of green finance, followed by stakeholder and market ESG pressure and digital financial inclusion. Green finance significantly promotes sustainable agricultural development and serves as a key transmission mechanism linking institutional, technological, and market factors to sustainability outcomes. Moreover, green supply chain requirements and ESG governance and transparency significantly strengthen the effectiveness of green finance and policy instruments. This study contributes to the literature by integrating green finance, ESG governance, and supply chain perspectives into a unified framework and provides important policy implications for promoting sustainable agriculture in emerging economies.
Keywords: Green finance, sustainable agricultural development, ESG governance, green supply chains
References
[1] Ahn, B., Friesenecker, M., Kazepov, Y., et al., 2023. How context matters: Challenges of localizing participatory budgeting for climate change adaptation in Vienna. Urban Planning. 8(1), 399–413. DOI: https://doi.org/10.17645/up.v8i1.6067
[2] Awan, U., Arnold, M.G., Gölgeci, I., 2021. Enhancing green product and process innovation: Towards an integrative framework of knowledge acquisition and environmental investment. Business Strategy and the Environment. 30(2), 1283–1295. DOI: https://doi.org/10.1002/bse.2684
[3] Awan, U., Sroufe, R., Shahbaz, M., 2021. Industry 4.0 and the circular economy: A literature review and recommendations for future research. Business Strategy and the Environment. 30(4), 2038–2060. DOI: https://doi.org/10.1002/bse.2731
[4] Azam, M., Liu, L., Ahmad, N., 2021. Impact of institutional quality on environment and energy consumption: Evidence from developing world. Environment, Development and Sustainability. 23(2), 1646–1667. DOI: https://doi.org/10.1007/s10668-020-00644-x
[5] Benítez-Silva, H., 2024. Sustainable and green economics as key to building sustainable communities. Sustainable Communities. 1(1), 2365219. DOI: https://doi.org/10.1080/29931282.2024.2365219
[6] Bhattacharyya, R., 2022. Green finance for energy transition, climate action and sustainable development: Overview of concepts, applications, implementation and challenges. Green Finance. 4(1), 1–35. DOI: https://doi.org/10.3934/GF.2022001
[7] Borojo, D.G., Yushi, J., Zhang, H., et al., 2023. A pathway to the green revolution in emerging economies: How does green technological innovation affect green growth and ecological sustainability? Economic Research–Ekonomska Istraživanja. 36(1), 2167223. DOI: https://doi.org/10.1080/1331677X.2023.2167223
[8] Chioatto, E., Sospiro, P., 2023. Transition from waste management to circular economy: The European Union roadmap. Environment, Development and Sustainability. 25(1), 249–276. DOI: https://doi.org/10.1007/s10668-021-02050-3
[9] Desalegn, G., Tangl, A., 2022. Enhancing green finance for inclusive green growth: A systematic approach. Sustainability. 14(12), 7416. DOI: https://doi.org/10.3390/su14127416
[10] Dzhengiz, T., Miller, E.M., Ovaska, J.P., et al., 2023. Unpacking the circular economy: A problematizing review. International Journal of Management Reviews. 25(2), 270–296. DOI: https://doi.org/10.1111/ijmr.12329
[11] Feng, H., Liu, Z., Wu, J., et al., 2022. Nexus between government spending and green economic performance: Role of green finance and structure effect. Environmental Technology & Innovation. 27, 102461. DOI: https://doi.org/10.1016/j.eti.2022.102461
[12] Fernandes, C.I., Veiga, P.M., Ferreira, J.J.M., et al., 2021. Green growth versus economic growth: Do sustainable technology transfer and innovations lead to an imperfect choice? Business Strategy and the Environment. 30(4), 2021–2037. DOI: https://doi.org/10.1002/bse.2730
[13] del Valle Fernández, M., Robles, J.M., Tolentino, M., et al., 2025. Analysis of the degree of implementation of the circular economy in Europe and Spain. Cogent Business & Management. 12(1), 2499668. DOI: https://doi.org/10.1080/23311975.2025.2499668
[14] Guo, F., Yang, C., Feng, S., 2024. The impact of digital economy on green technology innovation and its mechanism: Evidence from 274 cities in China. Emerging Markets Finance and Trade. 60(9), 1971–1985. DOI: https://doi.org/10.1080/1540496X.2023.2297925
[15] Tufail, M., Song, L., Khan, Z., 2024. Green finance and green growth nexus: Evaluating the role of globalization and human capital. Journal of Applied Economics. 27(1), 2309437. DOI: https://doi.org/10.1080/15140326.2024.2309437
[16] Haldar, A., Sethi, N., 2021. Effect of institutional quality and renewable energy consumption on CO₂ emissions: An empirical investigation for developing countries. Environmental Science and Pollution Research. 28(12), 15485–15503. DOI: https://doi.org/10.1007/s11356-020-11532-2
[17] Imtiaz, A., Yuanying, C., Shahzad, M.F., et al., 2025. Mapping the intellectual structure of green economy and sustainability: A bibliometric analysis of global research trends and policies. Cogent Economics & Finance. 13(1), 2507135. DOI: https://doi.org/10.1080/23322039.2025.2507135
[18] Jahanger, A., Usman, M., Ahmad, P., 2023. Investigating the effects of natural resources and institutional quality on CO₂ emissions during globalization mode in developing countries. International Journal of Environmental Science and Technology. 20(9), 9663–9682. DOI: https://doi.org/10.1007/s13762-022-04638-2
[19] Khan, H.H.A., Ahmad, N., Yusof, N.M., et al., 2024. Green finance and environmental sustainability: A systematic review and future research avenues. Environmental Science and Pollution Research. 31(6), 9784–9794. DOI: https://doi.org/10.1007/s11356-023-31809-6
[20] Khan, M.A., Riaz, H., Ahmed, M., et al., 2022. Does green finance really deliver what is expected? An empirical perspective. Borsa Istanbul Review. 22(3), 586–593. DOI: https://doi.org/10.1016/j.bir.2021.07.006
[21] Khattak, S.I., Ahmad, M., Khan, Z.U., et al., 2020. Exploring the impact of innovation, renewable energy consumption, and income on CO₂ emissions: New evidence from the BRICS economies. Environmental Science and Pollution Research. 27(12), 13866–13881. DOI: https://doi.org/10.1007/s11356-020-07876-4
[22] Kong, T., Sun, R., Sun, G., et al., 2022. Effects of digital finance on green innovation considering information asymmetry: An empirical study based on Chinese listed firms. Emerging Markets Finance & Trade. 58(15), 4399–4411. DOI: https://doi.org/10.1080/1540496X.2022.2083953
[23] Kostka, G., Zhang, X., Shin, K., 2020. Information, technology, and digitalization in China’s environmental governance. Journal of Environmental Planning and Management. 63(1), 1–13. DOI: https://doi.org/10.1080/09640568.2019.1681386
[24] Lin, Y., Wang, Q.-J., Zheng, M.Q., 2023. Nexus among digital economy, green innovation, and green development: Evidence from China. Emerging Markets Finance and Trade. 60(4), 704–723. DOI: https://doi.org/10.1080/1540496X.2023.2258260
[25] Luo, S., Yimamu, N., Li, Y., et al., 2023. Digitalization and sustainable development: How could digital economy development improve green innovation in China? Business Strategy and the Environment. 32(4), 1847–1871. DOI: https://doi.org/10.1002/bse.3223
[26] Martawardaya, B., Rakatama, A., Junifta, D.Y., et al., 2022. Green economy post COVID-19: Insights from Indonesia. Development in Practice. 32(1), 98–106. DOI: https://doi.org/10.1080/09614524.2021.2002817
[27] Mayer, A., Haas, W., Wiedenhofer, D., et al., 2019. Measuring progress towards a circular economy: A monitoring framework for economy-wide material loop closing in the EU28. Journal of Industrial Ecology. 23(1), 62–76. DOI: https://doi.org/10.1111/jiec.12809
[28] Wang, M., Pang, S., Hmani, I., et al., 2020. Towards sustainable development: How does technological innovation drive the increase in green total factor productivity? Sustainable Development. 29(1), 217–227. DOI: https://doi.org/10.1002/sd.2142
[29] Mngumi, F., Shaorong, S., Shair, F., et al., 2022. Does green finance mitigate the effects of climate variability: Role of renewable energy investment and infrastructure. Environmental Science and Pollution Research. 29(39), 59287–59299. DOI: https://doi.org/10.1007/s11356-022-19839-y
[30] Navarro, A.J.-L., Martínez, A.M.-E., 2024. A proposal to measure the circular economy implementation and sustainable development goals achievement using objectively weighted indices. International Journal of Sustainable Development & World Ecology. 31(2), 137–149. DOI: https://doi.org/10.1080/13504509.2023.2261007
[31] Ozturk, I., Aslan, A., Altinoz, B., 2022. Investigating the nexus between CO₂ emissions, economic growth, energy consumption and pilgrimage tourism in Saudi Arabia. Economic Research–Ekonomska Istraživanja. 35(1), 3083–3098. DOI: https://doi.org/10.1080/1331677X.2021.1985577
[32] Peng, X.-Y., Zou, X.-Y., Zhao, X.-X., et al., 2023. How does economic policy uncertainty affect green innovation? Technological and Economic Development of Economy. 29(1), 114–140. DOI: https://doi.org/10.3846/tede.2022.17760
[33] Qiu, Y., Liu, W., Wu, J., 2023. Digital economy and urban green innovation: From the perspective of environmental regulation. Journal of Environmental Planning and Management. 68(2), 267–289. DOI: https://doi.org/10.1080/09640568.2023.2244668
[34] Sohag, K., Husain, S., Hammoudeh, S., et al., 2021. Innovation, militarization, renewable energy and green growth in OECD countries. Environmental Science and Pollution Research. 28(27), 36004–36017. DOI: https://doi.org/10.1007/s11356-021-13326-6
[35] Tanveer, M., Khan, S.A.R., Umar, M., et al., 2022. Waste management and green technology: Future trends in circular economy leading towards environmental sustainability. Environmental Science and Pollution Research. 29(53), 80161–80178. DOI: https://doi.org/10.1007/s11356-022-23238-8
[36] Hair, J.F., Risher, J.J., Sarstedt, M., et al., 2019. When to use and how to report the results of PLS-SEM. European Business Review. 31(1), 2–24. DOI: https://doi.org/10.1108/EBR-11-2018-0203
[37] Walpole, G., Bacon, E., Malik, T., et al., 2025. Developing a model of circular economy engagement for public sector organizations. Public Money & Management. 45(7), 788–798. DOI: https://doi.org/10.1080/09540962.2025.2459171
[38] Wang, Q.J., Li, W.Z., Gong, Z.Y., et al., 2024. The coupling and coordination between digital economy and green economy: Evidence from China. Emerging Markets Finance and Trade. 61(3), 562–578. DOI: https://doi.org/10.1080/1540496X.2024.2399555
[39] Xu, Q., Li, X., Dong, Y., et al., 2023. Digitization and green innovation: How does digitization affect enterprises’ green technology innovation? Journal of Environmental Planning and Management. 68(6), 1282–1311. DOI: https://doi.org/10.1080/09640568.2023.2285729
[40] Zhang, J.Z., 2025. Toward sustainable and green economics: Community at the core. Sustainable Communities. 2(1), 2557122. DOI: https://doi.org/10.1080/29931282.2025.2557122
[41] Behera, B., Behera, P., Sethi, N., 2024. Decoupling the role of renewable energy, green finance and political stability in achieving sustainable development goal 13: Empirical insight from emerging economies. Sustainable Development. 32(1), 119–137. DOI: https://doi.org/10.1002/sd.2657
[42] Chandio, A.A., Shah, M.I., Sethi, N., et al., 2022. Assessing the effect of climate change and financial development on agricultural production in ASEAN-4: The role of renewable energy, institutional quality and human capital as moderators. Environmental Science and Pollution Research. 29(9), 13211–13225. DOI: https://doi.org/10.1007/s11356-021-16670-9
[43] Li, G., Jia, X., Khan, A.A., et al., 2023. Does green finance promote agricultural green total factor productivity? Evidence from China. Environmental Science and Pollution Research. 30(13), 36663–36679. DOI: https://doi.org/10.1007/s11356-022-24857-x
[44] Mo, Y., Sun, D., Zhang, Y., 2023. Green finance assists agricultural sustainable development: Evidence from China. Sustainability. 15(3), 2056. DOI: https://doi.org/10.3390/su15032056
[45] Raifu, I.A., Aminu, A., 2019. Financial development and agricultural performance in Nigeria: What role do institutions play? Agricultural Finance Review. 80(2), 231–254. DOI: https://doi.org/10.1108/AFR-06-2018-0045
[46] Sampene, A.K., Li, C., Khan, A., et al., 2023. The dynamic nexus between biocapacity, renewable energy, green finance and ecological footprint: Evidence from South Asia. International Journal of Environmental Science and Technology. 20(8), 8941–8962. DOI: https://doi.org/10.1007/s13762-022-04471-7
[47] Sethi, L., Behera, P., Behera, B., et al., 2024. Unravelling the role of renewable energy, information and communication technology and agricultural credit for sustainable agricultural productivity in developing countries. International Journal of Sustainable Development & World Ecology. 31(7), 989–1003. DOI: https://doi.org/10.1080/13504509.2024.2366474
[48] Yang, T., Huang, F., 2024. Does green finance matter for agricultural carbon abatement? Fresh insight from China. Environmental Science and Pollution Research. 31(34), 47157–47169. DOI: https://doi.org/10.1007/s11356-024-34106-y
[49] Zakaria, M., Jun, W., Khan, M.F., 2019. Impact of financial development on agricultural productivity in South Asia. Agricultural Economics–Zemedelska Ekonomika. 65(5), 232–239. DOI: https://doi.org/10.17221/199/2018-AGRICECON
[50] Zheng, M., Wu, L., Feng, G.-F., et al., 2025. The impact of green finance on sustainable development: An investigation into national ESG performance. Journal of Applied Economics. 28(1), 2528672. DOI: https://doi.org/10.1080/15140326.2025.2528672
[51] Addai, K., Yufenyuy, M., Kifem, F.L., 2024. Do green finance and digital technology matter for sustainable agricultural development? Insights from sub-Saharan Africa. Discover Agriculture. 2, 29. DOI: https://doi.org/10.1007/s44279-024-00039-w
[52] Ma, Y., Feng, G.-F., Yin, Z.-j., et al., 2025. ESG disclosures, green innovation, and greenwashing: All for sustainable development? Sustainable Development. 33(2), 1797–1815. DOI: https://doi.org/10.1002/sd.3210
[53] Yang, H.-C., Feng, G.-F., Gong, Q., et al., 2023. The impact of political competition on green innovation: A new insight into sustainable development. Sustainable Development. 31(5), 3692–3708. DOI: https://doi.org/10.1002/sd.2620