Superstar ESG Firms in Vietnam: Does It Really Matter?

Environmental, Social, and Governance (ESG) criteria have become increasingly important to the strategic development of enterprises, yet evidence on their tangible impacts—particularly in emerging economies—remains limited. This study examines the causal effects of ESG implementation among Vietnam’s top 20 ESG-leading firms between 2016 and 2022 and investigates whether these ``superstar†firms generate spillover effects on nearby businesses. Using firm-level data from the Vietnam Enterprise Survey and applying propensity score matching (PSM), we find that ESG adoption significantly improves productivity, technical efficiency, and revenue among leading firms. Moreover, positive spillovers extend to geographically proximate firms across sectors, contributing to higher household incomes at the district level. However, these socioeconomic gains come with an unintended consequence: districts benefiting from ESG spillovers also experience a substantial rise in CO2 emissions. This highlights a central trade-off—ESG-driven growth may stimulate economic improvements while simultaneously intensifying environmental pressures. Our findings suggest that ESG adoption matters, but its broader impacts depend critically on whether complementary environmental policies are in place to prevent economic benefits from being offset by increased ecological costs.