Corporate sustainability disclosure strategy and information asymmetry: The impact of GRI compliance and the substitution role of audit quality

Information asymmetry remains a critical challenge in Vietnam’s frontier stock market, where investor protection is limited, and disclosure credibility is often questioned. This study investigates whether compliance with Global Reporting Initiative (GRI) standards serves as a strategic mechanism to reduce information asymmetry and examines whether audit quality (Big 4) plays a complementary or substitute moderating role. The adoption of GRI standards is expected to provide reliable and comparable information, thereby helping to reduce the information gap between managers and investors (Bataineh et al., 2025; Isiaka, 2022; Santoso et al., 2023). Using a two-way fixed-effects model (FEM) with system generalized method of moments (GMM) robustness checks on a panel dataset of 420 non-financial listed firms over 2020–2024, the results reveal that both GRI compliance and Big 4 audits independently reduce information asymmetry. However, the core finding is a substitution effect: the impact of GRI reporting is significantly weakened for Big 4-audited firms, particularly in environmentally less-sensitive industries. This study contributes to the corporate disclosure strategy literature by providing the first empirical evidence of this substitution dynamic in a frontier market, offering actionable insights for developing optimal transparency strategies.