Pacific Accounting Review

An Exploratory Structural Model Of Motivation For Green

Finance By Smaller Private Firms In The Emerging Economy
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Of Vietnam
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Journal: Pacific Accounting Review
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Manuscript ID Draft

Manuscript Type: Research Paper

emerging economies, green finance, smaller private firms, Vietnam,

Keywords:
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structural equation modeling
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Page 1 of 29 Pacific Accounting Review

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An Exploratory Structural Model Of Motivation For Green Finance By
5 Smaller Private Firms In The Emerging Economy Of Vietnam
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9 The study provides empirical evidence on the factors affecting the motivation of smaller
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11 firms in their access to green finance as an alternative to traditional finance. Evidence was
12 achieved from a postal survey with 53 respondents in wide-range industries in Vietnam. The
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14 study uses exploratory factor analysis (EFA) and Structural Equation Modeling (SEM) analysis
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15 to perform assessment on the factors affecting the firms’ motivation. A relational model of
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17 factors was then developed to reveal their impact on the motivation behind the firms’ access to
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18 green finance. The results show that the firms were influenced by both internal and external
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20 factors. The structural model reveals internal factors are the most which motivates managers
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to access to green finance, and the result shows that the internal factors are the main drivers
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23 for smaller firms to access and use the “greener” financial option. Banks and related parties
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24 had the most negative impact on the motivation for green finance, providing evidence of the
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26 limited role of traditional financial providers for green finance. The firms were also found to
27 have little understanding and almost no long-term plan for access to green finance. This study
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29 offers valuable insights into the motivations of smaller firms in accessing green finance in
30 Vietnam through identifying internal factors as the primary drivers for managers seeking green
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32 financial options. Moreover, it reveals the limited role of traditional financial providers and
33 highlights gaps in firms' understanding and long-term planning for green finance, providing
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35 practical implications for policymakers and industry practitioners aiming to promote

36 sustainable finance initiatives.
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38 Keyword: emerging economies, green finance, smaller private firms, structural

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40 equation modeling, Vietnam.
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44 I. Introduction
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46 Green finance has no longer been a far-fetched concept to global economies, with
47 countries have signed the Paris Agreement which is a legally binding international treaty to
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49 tackle global environmental and climate issues (Dimitrov,2016; Blau, 2017). However, the
50 concept has only been paid attention mainly by developed economies, which could be seen
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52 through the amount of green bond issued accounting for two-thirds of global green bond
53 volume, and larger developing economies such as China, who is the leading green bond issuing
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55 country (CBI, 2023). On the other hand, there had been only minor signs of participation of
56 smaller size developing economies, yet in the near future these economies would have to face
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58 the consequences of climate and environmental externalities associated with economic growth.
59 While there had been attempts to incorporate green finance into their financial markets, further
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3 research into this area has been proved necessary.
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5 Over the last decade, Vietnam has enjoyed fast economic growth between 6%-9% GDP
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7 per year. The country has been able to make its mark on the global map without-of-expectation
8 economic growth among other developing countries in Asia, scoring a phenomenal average
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10 growth rate of 6.9% during the 2000-2019 period and continued to show its resilience
11 throughout the COVID-19 pandemic. The secret to such strong growth is no secret at all– by
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13 focusing on shifting away from an agriculture-reliant economy to upgrading industrial
14 infrastructure and turning itself into a global value chain hub by focusing on green and resilient
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16 infrastructure and human resource development (World Bank, 2023). Therefore, the demand
17 for energy undeniably skyrocketed, as the energy consumption would suggest economic growth
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19 and industrial-oriented economy (Nguyen et al., 2019). Given the country’s growing reliance
20 on fossil fuels (Figure 1) (IEA, 2023), the electricity sector accounts for approximately two-
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22 thirds of greenhouse gas emissions. A critical problem for Vietnam is to manage its rapid
23 economic growth sustainably. As shown by its fast industrialization and urbanisation in the
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25 recent decades, Vietnam’s structural transformation has significantly enhanced the country’s
26 standard of living while increasing its green economic recovery and susceptibility to climate
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28 change.
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Figure 1: Vietnam Energy Output Composition
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Source: IEA (2023)
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To tackle the limitation of such a carbon-intensive economic model, the government has
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53 initiated policies that mitigate the impact of climate change, transform the growth model
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towards green growth. According to Zimmer et al. (2015), Vietnam first approved the National
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56 Climate Change Strategy (NCCS) in 2011 and Vietnam National Green Growth Strategy
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(VGGS) in 2012, which combined energy, economic growth and environment sustainability as
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59 the target for a low-carbon economy. Furthermore, the focus was then casted on renewable
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energy, with tax relief and supportive policies were revised and approved in the late 2010s,
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3 which further prove the determination of Vietnam in its low-carbon transition.
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7 In order to realise such goal, it is necessary to have financial tools to facilitate the
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9 transitional process. However, Vietnam’s financial market is immature, with a small market
10 size and undiversified financial instrument types. The domestic stock market is small in scale
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12 and weak in structure, with a lack of diversity in market commodities. In addition, it has an
13 immature bond market structure, in which the government bond segment holds the majority
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15 market share. Furthermore, it is difficult to issue long-term bonds, since the market prefers
16 short-maturity ones. In 2017, the bonds with over a 10-year period only comprised 22% of the
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total outstanding value of bonds issued. Because of the small size of the capital market,
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19 financing for businesses is heavily reliant on bank credit capital (Banking Strategy Institute,
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21 2015[1] ). However, funding via Viet Nam’s banking system is also challenging due to the
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22 common view among domestic banks that renewable projects are a risky and strange businesses.
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Although, Vietnamese banks have been more interested in their green lending portfolio to date,
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25 the most significant obstacle that banks face is their inadequate capacity for processing green
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27 credit appraisals, including the risk assessment and evaluation of new technologies. The
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28 expectation for new and innovative financial vehicles, such as green bonds, is that they will
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30 provide an additional financial channel for renewable energy financing.
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32 While most of literature in green finance had been dedicated to studying the financial
33 instruments and the framework for development markets for the exchange of those instruments,
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35 little had been identified to investigate what motivates smaller firms and projects to use green
36 finance as their funding sources. Therefore, this paper aims to investigate how firms in Vietnam
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decide how to raise funding for their investments, and more importantly, their motivation for
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39 the access of green finance compared to traditional finance. The target of this paper could be
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41 translated into two objectives:
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43 1. To identify the theoretical framework of motivation for green finance access;

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45 2. To develop an analytical model of factors affecting the motivations to use green
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46 finance
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48 This study is survey-based. Specifically, the study uses the responses from 53 firms in
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50 Vietnam with varied business models and industry. The survey addressed three key areas:
51 funding behaviours, motivation when finding sources of green finance motivation, and
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53 assessment of green financial instruments. The study is amongst the limited number of
54 academic studies that use survey evidence based on a sample of firms in a mid – size developing
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56 economy, enabling to evaluate the research questions from a new perspective and to test the
57 previous research findings in the literature. It also offers more insights into firms financing
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59 processes and drivers of their decision-making which are not directly measurable based on
60 archival market data. As such, the study contributes to the broader literature in finance with

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3 survey evidence to analyse policies and decisions of both firms and financial regulators.
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3 II. Literature review
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5 In recent years, the complex relationship amongst sustainable development, firm’s
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7 profit-making and value-maximising goals has raised a phenomenal attention of research in
8 financing decision making in green projects. Green finance – as the relationship now coined as
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10 – has emerged as the fundamental part in the green transition that offers an alternative financing
11 pathway to individuals, corporations and governments willing to fund and invest in green
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13 activities or low carbon activities (Huang et al, 2019). The concept, while could be counter-
14 intuitively believed to originate from developed economies, is pivotal to the sustainability of
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16 the emerging economies, especially those in the South East Asia region with rapid urbanisation
17 and industrialisation.
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19 Research into this topic in recent years had been focused on the standardization of green
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21 finance definition the definition problems of green finance (Lindenberg, 2014; Berrou et al,
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22 2019), development of green finance market (Weber and ElAlfy, 2019), or the use of green
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finance by firms and investors (Sangiorgi and Schopohl, 2023; Gianfrate and Peri 2019).
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25 However, the financing decision-making process of firms seemed overlooked, with only the
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27 traditional financing behaviour having been long investigate across many regions that provided
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28 mixed results. Furthermore, the research is also of limited use since it used archival databases
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30 to measure the drivers of the use of financial sources. The paper contributes to the literature by
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31 expanding the topic of financing behaviour to the use of green finance via surveyed-preliminary
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33 data. Figure 2.1 presents the research framework of the paper.
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35 Figure 2.1: Research framework of motivation for green finance

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54 2.1 The role of stakeholders in financing decisions
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56 While the growing body of empirical literature uses firm characteristics as argument for
57 financing decision, the role of both shareholders and non-financial stakeholders should not be
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59 ignored. Originally, a neoclassical view of stakeholders is coined as the claimants to the residual
60 financial benefits of firms, which is to maximize wealth for the shareholders (Grinblatt and

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3 Titman 1998), which would usually affect dividend policies of firms. However, modern
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5 societies have required firms to evolve beyond such only purpose and to uphold the corporate
6 social responsibilities, or to put emphasize on other non-financial stakeholders, as they too
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8 could have impact on the performance and decision of firms. Specifically, Grinblatt and Titman
9 (1998) argued that the interaction between firms and their non-financial stakeholders is a
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11 determinant of the firm’s capital structure, as those stakeholders would be less likely to do
12 business with firms in distress. Therefore, how firms view each type of stakeholders should be
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14 further investigated in terms of their impacts on the financing decisions.
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16 Prior research had been able to produce substantial findings, such as Brown et al.’s
17 (2019) study on the role that institutional investors play in corporate capital structure decisions,
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19 McCahery et al. (2016) who investigate investors’ governance preferences, Graham and Harvey
20 (2001) exploring corporate finance practice. A few relevant studies in the field of corporate
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22 capital structure make use of questionnaires: Gompers et al. (2016) study of private equity
23 investors’ practices in firm capital structure and governance, Brounen et al. (2004) work on cost
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25 of capital and corporate governance. In the sustainable finance and accounting literature, Amel-
26 Zadeh and Serafeim (2018) employ a survey instrument to study how asset managers use ESG
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28 data in their investment decisions, Krueger et al. (2020) survey institutional investors’ views
29 on climate change risk, and the study by Hummel et al. (2021) investigates how environmental
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31 and social risks are integrated in the banking sector. However, how these stakeholders affect
32 the use of green finance were not covered, therefore this paper would contribute to the study
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34 of the impacts of stakeholders on capital structure of firms, especially with the availability
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35 of green finance.
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37 2.2 Motivations for choice of green finance
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39 Regarding the choice of funding sources, traditional capital structure theories proposed
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41 two main ideas of how firms would decide its capital structure, or choose types of financial
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instruments for their fundraising strategy. According to the proposed theories, firms would
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44 either (1) decide on an optimal capital structure and use different type of funding instruments
45 and sources to maintain such level (), or (2) have a pecking-order of finance instruments and
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47 classes, and would exhaust one option before moving to another (). Adhering to these theories,
48 subsequent research was able to identify factors that would impact the choice of funding sources
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50 and strategy, with major work were carried out by Frank and Goyal (2009), which found that
51 profitability, size of firms, tangibility, liquidity, past and future growth, uniqueness, non-debt
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53 tax shield, business risks, and agency costs. Furthermore, their research also found industry and
54 country specific factors such as interest rate, inflation, or average industry indicators also
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56 impact the choice of funding sources. However, research were mostly conducted on public
57 firms that could easily access public debt and equity markets, whereas private firms had to rely
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59 on internal funds and direct bank loans to meet their financing needs (Goyal et al. 2011). In
60 other words, availability of funding sources and access to different classes of capital could have

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3 certain impact on the choice of capital for firms (Faulkender and Peterson 2006). As public
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5 companies could enjoy wide range of financial instruments, private firms were found to be
6 exclusively reliance on debt financing and have higher amount of cash stockpile, hence become
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8 more constrainted in financing their investments and sensitive to their performance (Omer
9 2009; Le and Pham 2011). Therefore, it could be inferred that there are stronger ties between
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11 the performance of the firms and the decision of choice of capital sources for firms.
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13 The same intuition could be applied to the choice of using green finance, as firms would
14 be more likely to use the source if it could be translated to improvement in performance.
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16 Assessing listed firms and green bonds issuers in developed economies, Sangiorgi and
17 Schopohl (2023) conducted one of the first survey-based research into the issuance of green
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19 bond and the motivation to do so, which accounted for a range of potential benefits for
20 performance such as reputational benefits, lower cost of capital, and tax benefits. From the
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22 above consideration three hypotheses are developed to find the answer to the research questions.
23 Table 2.2 presents the hypotheses.
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25 Table 2.2 Hypothesis structure
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27 Hypothesis Null hypothesis (H0) Accepted
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29 /Rejected
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31 H1 There is no association between the identification of

32 finance providers and the motivation for the access to
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34 green finance.
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36 H2 There is no association between the perception of benefits
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39 H3 There is no association between the impact of
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41 stakeholders on the motivation of green finance.
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45 III. Data collection
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47 3.1 Data collection procedure
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49 The data collection was conducted in the time frame from July-September 2023 in both
50 northern and southern areas of Vietnam. After screening data was performed, the survey
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52 questionnaires were sent to 300 companies across Vietnam. The surveys were carried out by
53 questionnaire form distribution to a random database of firms at provincial clusters provided
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55 by the General Statistics Office of Vietnam and managed to collect 53 responses, showing a
56 response rate of around 17%. The sample comprises 53 companies in Vietnam with a random
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58 number of different sizes, geographic area, industries and legal ownership status. The
59 respondents were high-level managers of the firm, namely general managers or chief
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3 accountants since they are in good position, knowledge and extensive experience in the field of
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5 capital source decision making. After three pilot tests with small sample respondents, the
6 official survey was carried out and the responses were then collected through pre-structure
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8 questionnaires, which included 30 questions covering (1) the characteristics of the firms, (2)
9 the financing behaviour and strategy of the managers/experts, and (3) their perceptions on green
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11 finance as a source of finance compared to traditional finance. The data collection was
12 conducted over a three-month period between July and September 2023, which were then
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14 translated, standardised, coded into SPSS software (Version 29.0) and compared to the original
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15 entry to eliminate errors. The data was analysed using both descriptive and relational analysis.
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17 3.2 Respondent industrial characteristics
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19 Table 3.1 provides an overview of the 53 respondents by the operation regions of the
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21 business (Panel A), their legal status (Panel B), industry their main business in (Panel C). The
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22 sample covers companies situated equally in both regions of Vietnam, yet most of the
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respondents were most companies from private sector (69.8%) and foreign direct investment
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25 firms (24.5%). Most of the respondents were in the industrial and production industries (62%),
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27 while the energy sector only consisted of 11%. This is due to Vietnam energy being supplied
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32 Table 3.1 Respondent characteristics
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34 Panel A: Region Count Relative (%)
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36 North 31 58.5
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42 Panel B: Legal status of firms Count Relative (%)
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FDI 13 24.5
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JSC 1 1.9
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Private Company 37 69.8
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SOE 1 1.9
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Other 1 1.9
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Panel C: Industry Count Relative (%)
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Energy 6 11.3
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4 Multi-Industry 9 17.0
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6 Bank/Financial Service 1 1.9
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8 Industrial/Production 33 62.3
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10 Construction 4 7.5
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14 3.3 Hypothesis Testing Method and Model Development
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16 Identification of green finance providers
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To test the significant level of the perception of identification of green finance resources,
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19 non-parametric Kendall’s tau b correlation was used to not only test the statistical significance
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21 between variables, but also examine the potential relationship between them (Appendix I).
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23 The correlation test has shown that there is a significant correlation (p<0.05) amongst
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24 variables of green finance providers. Therefore, it is necessary to assess the relationship

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26 amongst variables in terms of collinearity in order to identify appropriate conclusions on
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29 collinearity
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31 Table 3.2 Coefficientsa

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33 Unstandardized Standardized Collinearity
34 Coefficients Coefficients Statistics
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36 Std.
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Model B Error Beta t Sig. Tolerance VIF
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40 (Constant) .939 .323 2.908 .006
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42 Q10.StakeholderRating_Gov .147 .075 .343 1.951 .057 .583 1.715
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44 Q10.StakeholderRating_ComBank -.153 .096 -.399 -1.587 .120 .284 3.517
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46 Q10.StakeholderRating_InvBank .055 .094 .142 .584 .562 .303 3.304

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48 Q10.StakeholderRating_IFO .052 .079 .154 .654 .516 .324 3.089
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50 Q10.StakeholderRating_NGO -.048 .085 -.143 -.568 .573 .283 3.529
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52 Q10.StakeholderRating_GreenFunds -.052 .055 -.157 -.942 .351 .651 1.535
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54 Q10.StakeholderRating_InsuranceCom-.059 .078 -.177 -.762 .450 .334 2.992
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56 panies
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58 a. Dependent Variable: Q7.EvaluateVnGreenFin
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3 Table 3.2 showed that there was a multi-collinearity amongst variables with 5/7
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5 variables generating VIFs more than 2. Therefore, exploratory factor analysis was performed
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8 The factor analysis was used with the Unweighted Least Squares extraction method and
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10 the Varimax rotation method with Kaiser Normalization. Table 3.3 show the variance explained
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13 Table 3.3 Total Variance Explained
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15 Extraction Sums of Squared Rotation Sums of Squared
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17 Initial Eigenvalues Loadings Loadings
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19 % of Cumulative % of Cumulative % of Cumulative
20 Component Total Variance % Total Variance % Total Variance %
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22 1 3.871 55.301 55.301 3.871 55.301 55.301 2.946 42.089 42.089

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24 2 1.218 17.406 72.707 1.218 17.406 72.707 2.143 30.618 72.707

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4 .586 8.366 90.131
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5 .342 4.889 95.020
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6 .222 3.168 98.189
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37 Extraction Method: Principal Component Analysis.
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40 Table 3.4: Rotated Component Matrixa
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42 BANK NONBA
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45 Q10.StakeholderRating_Gov .025 .820
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Q10.StakeholderRating_ComBank .244 .882
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48 Q10.StakeholderRating_InvBank .519 .655
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50 Q10.StakeholderRating_IFO .775 .427
51 Q10.StakeholderRating_NGO .869 .188
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53 Q10.StakeholderRating_GreenFunds .762 .027
54 Q10.StakeholderRating_InsuranceCompanies .825 .211
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56 Extraction Method: Principal Component Analysis.
57 Rotation Method: Varimax with Kaiser Normalization.
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59 Table 3.4 shows that there are two factors extracted from the rotation. It could be seen
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3 that the first factor represents a combination of bank related group of green finance providers,
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5 including (1) Government, (2) Commercial Bank and (3) Investment Bank. The second factor
6 represents non-bank related provider of green finance, including: (1) International Finance
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8 Organisation, (2) Non-Government Organisations, (3) Green Funds and (4) Insurance
9 Companies. Therefore, these factors were renamed as bank related finance providers (BANK)
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11 and non-bank finance providers (NONBA).
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13 Identification of related parties in green finance decision making
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16 of firms, especially with the availability of green finance, it is necessary to identify the role of
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related parties in green finance decision making. The respondents were asked to rank the role
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19 of five main groups, namely (1) Investor, (2) Employees, (3) Board of Director, (4)
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21 Government, and (5) Customer. As presented in Appendix I, the correlation test showed
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to assess the relationship amongst variables (Table 3.5).
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26 Table 3.5: Coefficients of related parties variables
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29 Unstandardize d Collinearity
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31 d Coefficients Coefficients Statistics

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34 Model B Error Beta t Sig. ce VIF
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36 1 (Constant) .307 .304 1.011 .317
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38 Q16.Stakeholders_Investor .056 .064 .160 .878 .384 .565 1.769

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41 Q16.Stakeholders_Employ -.011 .052 -.034 -.202 .841 .657 1.522
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44 Q16.Stakeholders_BOD .066 .070 .182 .937 .353 .498 2.010
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47 Q16.Stakeholders_Govern -.034 .066 -.082 -.512 .611 .737 1.356
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50 Q16.Stakeholders_Custom .049 .051 .158 .958 .343 .695 1.438
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52 ers
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54 a. Dependent Variable: Q7.EvaluateVnGreenFin
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56 Since the coefficients of all related party variables are not significant (p>0.05) even in
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59 hypotheses of the relationship amongst variables. Therefore, it is irrelevant to include the
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5 In order to assess the impact of related party variables in the model, further analysis,
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7 namely Exploratory Factor Analysis (EFA) was then performed to reduce the number of
8 variables and to identify the new factors grouping the variables. The results have shown that
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10 amongst five groups of related parties, there were two component factors extracted with
11 Eigenvalues>1. Table 3.6 shows the extraction.
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13 Table 3.6: Total Variance Explained
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15 Extraction Sums of Squared Rotation Sums of Squared
16 Initial Eigenvalues Loadings Loadings
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18 % of % of
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20 Componen Varianc Cumulativ Varianc Cumulative % of Cumula
21 t Total e e% Total e % Total Variance tive %
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23 1 2.319 46.376 46.376 2.319 46.376 46.376 1.993 39.851 39.851
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25 2 1.028 20.555 66.931 1.028 20.555 66.931 1.354 27.081 66.931
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27 3 .905 18.108 85.039
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Table 3.7: Rotated Component Matrixa
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INTER EXTER
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1 2
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43 Q16.Stakeholders_Investor .506 .556

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45 Q16.Stakeholders_Employees .867 -.075
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47 Q16.Stakeholders_BOD .849 .209
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49 Q16.Stakeholders_Government .008 .948
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51 Q16.Stakeholders_Customers .515 .310
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53 Extraction Method: Principal Component Analysis.
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55 Rotation Method: Varimax with Kaiser Normalization.
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Table 3.7 shows the rotated factor matrix that the result of a factor analysis conducted
59 on a set of variables related to related party variables. It could be seen that the first factor
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3 (Component 1) represents a combination of (1) Employee and (2) Board of Director related to
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5 internal stakeholder group (Fact_Q16_1) and the second factor (Component 2) represents a
6 combination of (1) Government and (2) Investor refer to external stakeholder group
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8 (Fact_Q16_2). Therefore, these factors were renamed as the Internal stakeholder group
9 variables (ITERN) and internal stakeholder group variable (EXTER).
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11 The beneficial motivation for green finance
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13 The correlation tests (Appendix I) have shown that the correlation of benefit variables
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15 are significant (p<0.05). Therefore, a linear regression was perform to provide evidence of
16 multi-collinearity amongst variables. Table 3.8 shows the test results.
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Table 3.8: Coefficientsa
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19 Standardiz
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21 Unstandardiz ed
ic

22 ed Coefficien Collinearity
23
Coefficients ts Statistics
Ac

24
25 Std. Tolera
26
27 Model B Error Beta t Sig. nce VIF
co

28 1 (Constant) .168 .261 .646 .522

29
30 Q19.Motivation_Reputation .107 .060 .339 1.791 .081 .470 2.126
un

31 Q19.Motivation_BusinessM -.051 .059 -.156 -.876 .386 .530 1.885

32
33 odelChange
34
tin

Q19.Motivation_LowCost .092 .074 .244 1.242 .221 .436 2.294

35
36 Q19.Motivation_Shareholde -.079 .085 -.216 -.924 .361 .310 3.226
37
rPressure
gR

38
39 Q19.Motivation_MarketSig .118 .088 .335 1.340 .188 .270 3.709
40
41
nal
42 Q19.Motivation_GovRegula .071 .079 .205 .898 .374 .325 3.080
ev

43
44 tion
45 Q19.Motivation_Diversifica .034 .064 .099 .532 .598 .482 2.074
iew

46
47 tion
48 Q19.Motivation_ClimateCh -.141 .061 -.483 -2.318 .026 .389 2.574
49
50 ange
51 Q19.Motivation_Shareholde .027 .062 .079 .439 .663 .521 1.921
52
53 rExpection
54 Q19.Motivation_IncreaseSto -.084 .072 -.249 -1.167 .250 .370 2.705
55
56 ckPrice
57 Q19.Motivation_Peers .061 .054 .186 1.132 .264 .623 1.606
58
59 a. Dependent Variable: Q7.EvaluateVnGreenFin
60

13
 Pacific Accounting Review Page 14 of 29

1
2
3 Since the coefficients of all benefit variables are not significant (p>0.05) and VIFs are
4
5 >2 in 8/11 variables, it can be concluded that there is a collinearity amongst variables and there
6 is no evidence to reject the null hypotheses of the relationship amongst variables. Therefore, it
7
8 is irrelevant to include the variables in the model.
9
10 Further analysis, namely Exploratory Factor Analysis (EFA) was then performed to
11 reduce the number of variables and to identify the new factors grouping the variables. The
12
13 results have shown that amongst eleven benefit variables, there were two component factors
14 extracted. Table 3.9 shows the extraction.
Pa
15
16 Table 3.9: Total Variance Explained
17
cif

18 Extraction Sums of Squared Rotation Sums of Squared

19
20 Initial Eigenvalues Loadings Loadings
21
ic

22 % of Cumulative % of Cumulative % of Cumulative

23 Component Total Variance % Total Variance % Total Variance %
Ac

24
25 1 4.464 40.578 40.578 4.464 40.578 40.578 3.433 31.208 31.208
26
27 2 1.846 16.782 57.360 1.846 16.782 57.360 2.877 26.151 57.360
co

28
29 3 1.165 10.589 67.948
30
un

31
4 .910 8.275 76.224
32
33
34
5 .695 6.318 82.542
tin

35
36
6 .531 4.825 87.367
37
7 .440 4.002 91.369
gR

38
39
40 8 .326 2.968 94.337
41
42 9 .287 2.613 96.950
ev

43
44 10 .199 1.806 98.755
45
iew

46 11 .137 1.245 100.000

47
48 Extraction Method: Principal Component Analysis.
49
50 From the proposed hypotheses, to test whether if there are relationships between the
51 outlook on uses of green finance and other factors, correlation analysis was used. However,
52
53 while the perception on the cost and requirements of green finance had been answered directly,
54 the motivations for using green finance were composed of multiple answers. Therefore, to
55
56 reduce the dimension of the variables, factor analysis would be employed for the variables to
57 compose more meaningful factoring variables. Using SPSS’s factor analysis function, two
58
59 variables were extracted which is presented in Tabel 3.10.
60

14
Page 15 of 29 Pacific Accounting Review

1
2
3 Table 3.10: Motivations for using green finance – factor analysis
4
5 Components Loading variables
6
7 The strategic ● Change of business model ( Motivation_BusinessModelChange)
8
9 adaptation of firms ● Green finance having lower cost of finance (Motivation_LowCost),
10 (STRAT)
11 ● Diversifincation of finance source (Motivation_Diversification)
12
13 ● Government guildelines and standardization
14
Pa
15 (Motivation_GovRegulation)
16
17 ● Climate change concerns (Motivation_ClimateChange)
cif

18
19 The stakeholder’s ● Pressure from current shareholder (Motivation_ShareholderPressure)
20
focus of firms Financial market signal (Motivation_MarketSignal)
21
ic

22 (STAKE) ● Increase stock price (Motivation_IncreaseStockPrice)

23
Ac

24 ● Previous successful operations of businesses in the same industry

25
26 (Motivation_Peers)
27
co

28 ● Expectations from potential shareholder/investors

29 (Motivation_ShareholderExpection)
30
un

31
The factor analysis was used with the Unweighted Least Squares extraction method
32
33 and the Varimax rotation method with Kaiser Normalization. Additionally, since it is important
34
tin

identify the respondent’s view of green finance, it is noted that the factor analysis was
35
36 performed only on cases where correspondents view the potential of green finance to be
37
potential. Table 3.11 showed the rotated factor matrix that the result of a factor analysis
gR

38
39 conducted on a set of variables related to different motivations. It could be seen that the first
40
factor represents a combination of motivations related to business strategy, adaptability, and
41
42 environmental considerations, while the second factor represents motivations related to external
ev

43 market influences and shareholder expectations, particularly stock price performance.

44
45 Therefore, these factors were renamed as the strategic adaptation of firms (STRAT) the
iew

46 stakeholder’s focus of firms (STAKE).

47
48 Table 3.11: Rotated Factor Matrix
49
50 STRAT STAKE
51 1 2
52
53 Q19.Motivation_Reputation .651 .099
54
55
Q19.Motivation_BusinessModelChange .590 .215
56 Q19.Motivation_LowCost .659 .170
57
58 Q19.Motivation_ShareholderPressure .112 .840
59 Q19.Motivation_MarketSignal -.003 .925
60

15
 Pacific Accounting Review Page 16 of 29

1
2
3 Q19.Motivation_GovRegulation .782 .049
4
5 Q19.Motivation_Diversification .763 .116
6 Q19.Motivation_ClimateChange .745 .153
7
8 Q19.Motivation_ShareholderExpection .473 .575
9
10
Q19.Motivation_IncreaseStockPrice .216 .815
11 Q19.Motivation_Peers .442 .444
12
13 Extraction Method: Principal Component Analysis.
14 Rotation Method: Varimax with Kaiser Normalization.
Pa
15
16
17 a. Rotation converged in 3 iterations.
cif

18
19 The development of the model of motivation for green finance
20
21 Since the aim of the study is to construct a relational model of the factors affecting the
ic

22 motivation of the firms, structural modelling using AMOS was performed to include the factors
23
to be examined in the study. Figure 3.12 shows the motivation for green finance – A Structure
Ac

24
25 Equation Modelling using AMOS (Version 29.0).
26
27 Figure 3.12: The motivation for green finance – A Structure Equation Modelling
co

28
29
30
un

31
32
33
34
tin

35
36
37
gR

38
39
40
41
42
ev

43
44
45
iew

46
47
48
49
50
51
52
53
54
55
56
57
58
59
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Page 17 of 29 Pacific Accounting Review

1
2
3 Minimum was achieved
4
5 Chi-square = 30.272
6
7 Degrees of freedom = 15
8
9 Probability level = .011
10
11 Estimates (Group number 1 - Default model)
12
13 Scalar Estimates (Group number 1 - Default model)
14
Pa
15 Generalized Least Squares Estimates
16
17 Regression Weights: (Group number 1 - Default model)
cif

18
19 Labe
20 Estimate S.E. C.R. P
21 l
ic

22
23 GREEN <--- BANK .141 .161 .873 .382
Ac

24
25 GREEN <--- NONBA .006 .064 .092 .927
26
27 GREEN <--- EXTER -.022 .052 -.419 .675
co

28
29 GREEN <--- STRAT .016 .138 .114 .909
30
un

31
GREEN <--- STAKE -.003 .065 -.048 .962
32
33
34
GREEN <--- INTER -.142 .057 -2.478 .013
tin

35
36 Standardized Regression Weights: (Group number 1 - Default model)
37
Estimate
gR

38
39
40 GREEN <--- BANK -.375
41
42 GREEN <--- NONBA .041
ev

43
44 GREEN <--- EXTER -.057
45
iew

46 GREEN <--- STRAT .015

47
48 GREEN <--- STAKE -.008
49
50
51
GREEN <--- INTER .371
52
53
54
55
56
57
58
59
60

17
 Pacific Accounting Review Page 18 of 29

1
2
3 Variances: (Group number 1 - Default model)
4
5 Estimate S.E. C.R. P Label
6
7
8
BANK .282 .106 2.664 .008
9
10 NONB
.711 .163 4.364 ***
11 A
12
13 EXTER .877 .177 4.950 ***
14
Pa
15 STRAT .330 .110 2.992 .003
16
17
STAKE .702 .159 4.417 ***
cif

18
19
20 INTER .791 .170 4.658 ***
21
ic

22 E1 .109 .021 5.099 ***

23
The evidence of impact of six factors to the motivation of access to green finance with
Ac

24
25 estimates are significant (p<0.05) proving that the impact of factors to the motivation of green
26
27 finance have brought into related hypotheses assessment and conclusion (Table 3.13).
co

28
29 Table 3.13 Assessment of hypotheses
30
un

31 Hypothesis Null hypothesis (H0) Accepted

32 /Rejected
33
34
tin

H1 There is no association between the identification of finance Rejected

35
36 providers and the motivation for the access to green finance.
37
gR

38 H2 There is no association between the perception of benefits and Rejected

39
the motivation for the access to green finance.
40
41
42
H3 There is no association between the impact of stakeholders on Rejected
ev

43 the motivation of green finance.

44
45 The model shows the impact of factors to the motivation of access to green finance.
iew

46
47
Internal provider of finance (INTERN, estimate 0.37) was seen the most important factor
48 affecting to the motivation of green finance. Based on the model, it could be seen that equity
49
50
was the preferable way of raising finance by firms, with internal equity was the highest rated
51 form of finance.
52
53 Both factors (1) the benefits of stakeholder in green finance (STAKE, estimate -0.08)
54
55
and (2) the strategic implication of green finance have least importance on the motivation of
56 green finance, providing evidence that the firms have little understanding and almost no long
57
58
term plan for access to green finance. It is noted that bank and related parties (BANK, estimate
59 -0.375) has most negative impact on the motivation for green finance, providing the evidence
60

18
Page 19 of 29 Pacific Accounting Review

1
2
3 of limited role of traditional financial providers for green finance. The findings confirm the
4
5 results of Nguyen et al. (2019) that were mostly listed companies with more financial capability
6 and access to other sources of finance, not the cases of private sector with smaller scale. While
7
8 these benefits could be an attractive point of green finance, certain aspects could make the
9 finance source unattractive: as the market as well as guidelines and standardizations of green
10
11 finance in Vietnam were underdeveloped, they were the top concerns that discourage firms
12 from considering green finance into their financing strategy. This was also reflected in firms
13
14 being unable to define a suitable project that fit in the requirements due to lack of a clear
Pa
15 definition of green finance that deter firms from using it.
16
17 The model also shows that the non-bank providers of finance (NONBA, estimate -
cif

18
19 0.041) have less role in motivation for firm to use green finance, suggesting that if the
20 government diversify the provision of green finance option, that would be good for access to
21
ic

22 green finance and market development, firms would be more willing to use green finance. In
23 other words, small private firms in Vietnam do not consider the requirement for access or the
Ac

24
25 impact of non bank provider of finance to be relevant to their financing decision.
26
27 IV. Conclusions
co

28
29 This study aims to identify and develops a model of exploratory factors affecting the
30 motivation for access to smaller private firms in Vietnam. Using survey with the managers and
un

31
32 financial officers in the sample of 53 firms, the study found that small firms prefer less complex
33 financial sources and identify internal provider of green finance as their main source of finance,
34
tin

35 and the basis of their decision-making process were driven by the role of internal rather than
36 external factors.
37
gR

38 The firms have little understanding and almost no long-term plan for access to green
39
40 finance. Bank and related parties have most negative impact on the motivation for green
41 finance, providing the evidence of limited role of traditional financial providers for green
42
ev

43 finance. The lack of guidelines and standardizations of green finance in Vietnam were the top
44 concerns that discourage firms from considering green finance into their financing strategy.
45
iew

46 This is further reflected in their motivations for using green finance, as they would be willing
47 to use green finance so long as the government could provide better guidelines and
48
49 standardizations at both conceptual and procedure levels, therefore making it more transparent
50 for the smaller private firm’s access to green finance.
51
52 The model developed from this study could be beneficial for further study on green
53
54 finance in emerging economies, where green financial market remain limited and
55 underdeveloped. Furthermore, since this study was able to capture the opinions and perceptions
56
57 of smaller private companies, the model provides evidence on further insights for smaller
58 private sector in their access to green finance.
59
60 REFERENCES

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3 http://documents.worldbank.org/curated/en/099639309152339260/IDU032ac52da0ad180460
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5 10bbc9006f7e8267ba2
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7 Weber, O., ElAlfy, A. (2019) ‘The Development of Green Finance by Sector’, The Rise
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12 Zimmer, A., Jakob, M., Steckel, J.C. (2015) ‘What motivates Vietnam to strive for a
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Pa
15 Sustainable Development, 24, pp. 19-23.
16
17
cif

18
19
20
21
ic

22
23
Ac

24
25
26
27
co

28
29
30
un

31
32
33
34
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35
36
37
gR

38
39
40
41
42
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44
45
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47
48
49
50
51
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Page 23 of 29 Pacific Accounting Review

1
2
3 Appendix I: Correlation
4
5
6
7
8
9 Q10.St Q10.Sta Q10.Sta Q10.Stake
10
11 akehol keholde Q10.Stake Q10.Sta Q10.Sta keholde holderRati
12 derRat rRating holderRati keholde keholde rRating ng_Insura
13
14 ing_G _ComB ng_InvBan rRating rRating _Green nceCompa
Pa
15 ov ank k _IFO _NGO Funds nies
16
17 Kendall's Q10.Stake Correlation 1.000 .475** .260* .257* .237 .041 .158
cif

18
19 tau_b holderRati Coefficient
20 ng_Gov
21 Sig. (2- . <.001 .039 .037 .055 .742 .198
ic

22 tailed)
23
Ac

24
N 53 53 53 53 53 53 53
25
26
27
Q10.Stake Correlation .475** 1.000 .648** .443** .237* .086 .360**
co

28 holderRati Coefficient
29
30
ng_ComB
Sig. (2- <.001 . <.001 <.001 .045 .474 .002
un

31 ank
32 tailed)
33
34 N 53 53 53 53 53 53 53
tin

35
36 Q10.Stake Correlation .260* .648** 1.000 .588** .388** .269* .402**
37 holderRati Coefficient
gR

38
39 ng_InvBan
Sig. (2- .039 <.001 . <.001 .001 .026 <.001
40 k
41 tailed)
42
ev

43 N 53 53 53 53 53 53 53
44
45 Q10.Stake Correlation .257* .443** .588** 1.000 .567** .346** .530**
iew

46
holderRati Coefficient
47
48 ng_IFO
49
Sig. (2- .037 <.001 <.001 . <.001 .003 <.001
50 tailed)
51
52 N 53 53 53 53 53 53 53
53
54 Q10.Stake Correlation .237 .237* .388** .567** 1.000 .477** .662**
55
56 holderRati Coefficient
57 ng_NGO
58 Sig. (2- .055 .045 .001 <.001 . <.001 <.001
59 tailed)
60

23
 Pacific Accounting Review Page 24 of 29

1
2
3
4 N 53 53 53 53 53 53 53
5
6 Q10.Stake Correlation .041 .086 .269* .346** .477** 1.000 .360**
7
holderRati Coefficient
8
9 ng_Green
10
Sig. (2- .742 .474 .026 .003 <.001 . .002
Funds
11 tailed)
12
13 N 53 53 53 53 53 53 53
14
Pa
15 Q10.Stake Correlation .158 .360** .402** .530** .662** .360** 1.000
16
17 holderRati Coefficient
cif

18 ng_Insura
19 Sig. (2- .198 .002 <.001 <.001 <.001 .002 .
20 nceCompa
tailed)
21
ic

nies
22 N 53 53 53 53 53 53 53
23
Ac

24 **. Correlation is significant at the 0.01 level (2-tailed).

25
26 *. Correlation is significant at the 0.05 level (2-tailed).
27
co

28
29
30 Q16.Sta Q16.Sta
un

31
32 keholde Q16.Stake keholde Q16.Stake Q16.Stake
33 rs_Inve holders_E rs_BO holders_G holders_C
34
tin

35 stor mployees D overnment ustomers

36
37 Kendall's Q16.Stakehold Correlation 1.000 .284* .475** .331** .123
gR

38
tau_b ers_Investor Coefficient
39
40
41
Sig. (2- . .018 <.001 .009 .311
42 tailed)
ev

43
44 N 53 53 53 53 53
45
iew

46 Q16.Stakehold Correlation .284* 1.000 .474** -.031 .280*

47
48 ers_Employees Coefficient
49
50 Sig. (2- .018 . <.001 .793 .015
51 tailed)
52
53 N 53 53 53 53 53
54
55 Q16.Stakehold Correlation .475** .474** 1.000 .054 .234*
56
57 ers_BOD Coefficient
58
59
60

24
Page 25 of 29 Pacific Accounting Review

1
2
3
4 Sig. (2- <.001 <.001 . .657 .046
5 tailed)
6
7
N 53 53 53 53 53
8
9
10
Q16.Stakehold Correlation .331** -.031 .054 1.000 .203
11 ers_Governme Coefficient
12
nt
13 Sig. (2- .009 .793 .657 . .090
14
tailed)
Pa
15
16
17 N 53 53 53 53 53
cif

18
19 Q16.Stakehold Correlation .123 .280* .234* .203 1.000
20 ers_Customers Coefficient
21
ic

22 Sig. (2- .311 .015 .046 .090 .

23
tailed)
Ac

24
25
26 N 53 53 53 53 53
27
co

28 *. Correlation is significant at the 0.05 level (2-tailed).

29
30 **. Correlation is significant at the 0.01 level (2-tailed).
un

31
32
33
34 Q19.Mot Q19.M Q19.M
tin

35
Q19.Mot ivation_ Q19.M otivatio Q19.M otivatio
36
37 ivation_ Business otivatio n_Share otivatio n_Gov
gR

38
Reputatio ModelCh n_Low holderP n_Mark Regulat
39
40 n ange Cost ressure etSignal ion
41
42 Kendall Q19.Mot Correlation 1.000 .522** .301* .090 .058 .133
ev

43
's tau_b ivation_ Coefficient
44
45 Reputatio
iew

46
Sig. (2-tailed) . <.001 .010 .440 .621 .258
n
47
48 N 53 53 53 53 53 53
49
50 Q19.Mot Correlation .522** 1.000 .321** .095 .071 .203
51 ivation_ Coefficient
52
53 Business
Sig. (2-tailed) <.001 . .006 .409 .542 .082
54 ModelCh
55 N 53 53 53 53 53 53
56 ange
57
58 Q19.Mot Correlation .301* .321** 1.000 .283* .070 .480**
59 ivation_L Coefficient
60

25
 Pacific Accounting Review Page 26 of 29

1
2
3 owCost
4 Sig. (2-tailed) .010 .006 . .016 .553 <.001
5
6 N 53 53 53 53 53 53
7
8 Q19.Mot Correlation .090 .095 .283* 1.000 .676** .166
9
10
ivation_S Coefficient
11 harehold
12 Sig. (2-tailed) .440 .409 .016 . <.001 .158
13
erPressur
14 e N 53 53 53 53 53 53
Pa
15
16 Q19.Mot Correlation .058 .071 .070 .676** 1.000 .044
17
ivation_ Coefficient
cif

18
19 MarketSi
20 Sig. (2-tailed) .621 .542 .553 <.001 . .707
21
gnal
ic

22 N 53 53 53 53 53 53
23
Q19.Mot Correlation .133 .203 .480** .166 .044 1.000
Ac

24
25 ivation_ Coefficient
26
27 GovRegu
Sig. (2-tailed) .258 .082 <.001 .158 .707 .
co

28 lation
29
N 53 53 53 53 53 53
30
un

31
32
Q19.Mot Correlation .261* .284* .311** .068 .113 .533**
33 ivation_ Coefficient
34
tin

35
Diversifi
Sig. (2-tailed) .025 .014 .008 .557 .331 <.001
36 cation
37 N 53 53 53 53 53 53
gR

38
39 Q19.Mot Correlation .295* .235* .202 .220 .109 .583**
40
41 ivation_ Coefficient
42
ev

ClimateC
43 Sig. (2-tailed) .010 .040 .082 .056 .343 <.001
44 hange
45 N 53 53 53 53 53 53
iew

46
47 Q19.Mot Correlation .301** .252* .242* .388** .403** .261*
48
ivation_S Coefficient
49
50 harehold
51
Sig. (2-tailed) .010 .029 .040 <.001 <.001 .026
erExpecti
52
53 on N 53 53 53 53 53 53
54
55 Q19.Mot Correlation .215 .283* .117 .435** .587** .013
56
57
ivation_I Coefficient
58 ncreaseSt
59 Sig. (2-tailed) .063 .014 .319 <.001 <.001 .911
60

26
Page 27 of 29 Pacific Accounting Review

1
2
3 ockPrice N
4 53 53 53 53 53 53
5
6 Q19.Mot Correlation .265* .211 .198 .252* .241* .254*
7
ivation_P Coefficient
8
9 eers
10
Sig. (2-tailed) .021 .065 .090 .029 .037 .030
11
12 N 53 53 53 53 53 53
13
14
Pa
15
16
17
Q19.Mot
cif

18
19 Q19.Mot Q19.Mot ivation_S Q19.Motiv
20
21 ivation_ ivation_ harehold ation_Incr
ic

22 Diversifi ClimateC erExpecti easeStock Q19.Motiva

23
cation hange on Price tion_Peers
Ac

24
25
26 Kendall Q19.Motivati Correlati .261* .295* .301** .215 .265*
27 's tau_b on_Reputatio on
co

28
29 n Coefficie
30 nt
un

31
32 Sig. (2- .025 .010 .010 .063 .021
33
34 tailed)
tin

35
36 N 53 53 53 53 53
37
gR

38 Q19.Motivati Correlati .284* .235* .252* .283* .211

39
on_Business on
40
41 ModelChange Coefficie
42
ev

nt
43
44
Sig. (2- .014 .040 .029 .014 .065
45
iew

46 tailed)
47
48 N 53 53 53 53 53
49
50 Q19.Motivati Correlati .311** .202 .242* .117 .198
51
52 on_LowCost on
53 Coefficie
54
55 nt
56
57 Sig. (2- .008 .082 .040 .319 .090
58 tailed)
59
60

27
 Pacific Accounting Review Page 28 of 29

1
2
3
4 N 53 53 53 53 53
5
6 Q19.Motivati Correlati .068 .220 .388** .435** .252*
7
on_Sharehold on
8
9 erPressure Coefficie
10
nt
11
12
13
Sig. (2- .557 .056 <.001 <.001 .029
14 tailed)
Pa
15
16 N 53 53 53 53 53
17
cif

18 Q19.Motivati Correlati .113 .109 .403** .587** .241*

19
20 on_MarketSi on
21
ic

gnal Coefficie
22
23 nt
Ac

24
25 Sig. (2- .331 .343 <.001 <.001 .037
26 tailed)
27
co

28 N 53 53 53 53 53
29
30 Q19.Motivati Correlati .533** .583** .261* .013 .254*
un

31
32 on_GovRegul on
33 ation Coefficie
34
tin

35 nt
36
37 Sig. (2- <.001 <.001 .026 .911 .030
gR

38
tailed)
39
40
41
N 53 53 53 53 53
42
ev

43
Q19.Motivati Correlati 1.000 .511** .351** .152 .332**
44 on_Diversific on
45
iew

46
ation Coefficie
47 nt
48
49 Sig. (2- . <.001 .003 .191 .004
50
51 tailed)
52
53 N 53 53 53 53 53
54
55 Q19.Motivati Correlati .511** 1.000 .405** .188 .372**
56 on_ClimateC on
57
58 hange Coefficie
59 nt
60

28
Page 29 of 29 Pacific Accounting Review

1
2
3
4 Sig. (2- <.001 . <.001 .102 .001
5 tailed)
6
7
N 53 53 53 53 53
8
9
10
Q19.Motivati Correlati .351** .405** 1.000 .421** .285*
11 on_Sharehold on
12
13
erExpection Coefficie
14 nt
Pa
15
16 Sig. (2- .003 <.001 . <.001 .013
17
tailed)
cif

18
19
20 N 53 53 53 53 53
21
ic

22 Q19.Motivati Correlati .152 .188 .421** 1.000 .390**

23 on_IncreaseSt on
Ac

24
25 ockPrice Coefficie
26 nt
27
co

28 Sig. (2- .191 .102 <.001 . <.001

29
30 tailed)
un

31
32 N 53 53 53 53 53
33
34 Q19.Motivati Correlati .332** .372** .285* .390** 1.000
tin

35
on_Peers on
36
37 Coefficie
gR

38
nt
39
40
41
Sig. (2- .004 .001 .013 <.001 .
42 tailed)
ev

43
44 N 53 53 53 53 53
45
iew

46
47
48
49
50
51
52
53
54
55
56
57
58
59
60

29