Determinants of Investor Trust in Green Bonds

The importance of investor trust in ensuring that green bonds successfully mobilize funding for ecologically sustainable activities has increased due to the swift growth of green finance. However, the information and credibility mechanisms driving investor trust remain relatively understudied, especially in emerging markets. In the context of the Vietnamese market, this study aims to explore the relationship between investor trust in green bonds and Green Accounting Information Quality (GAIQ), Green Bond Disclosure Transparency (GBDT), External Review and Assurance (ERA), and Issuer ESG Reputation (IER). Using survey data from 369 ordinary investors and representatives of institutional investors, the study creates an integrated information-and-credibility paradigm based on information asymmetry and signaling viewpoints. The suggested relationships are evaluated using covariance-based structural equation modeling (CB-SEM). The results show that investor trust is positively and considerably impacted by all four focus variables, with ERA having the greatest impact, followed by GAIQ, GBDT, and IER. The model accounts for 50.1% of the variance in investor trust, suggesting that investor trust is influenced by a variety of information and credibility mechanisms rather than only green labeling. By combining firm-level green accounting data, bond-specific disclosure, independent assurance, and issuer ESG reputation under a single investor-trust framework, the study adds to the literature on green finance and accounting. The results are especially pertinent to investors assessing the quality of green bonds and the risk of greenwashing; listed companies and financial managers looking to bolster the credibility of green bonds; accounting and assurance professionals in charge of sustainability information and verification; and policymakers and regulators creating disclosure, assurance, and investor-protection mechanisms for Vietnam's developing green bond market. Overall, the study emphasizes how crucial it is to combine reliable external and reputational signals with high-quality information in order to boost investor trust and promote the long-term growth of green financing.