DECODING ASIAN FINANCIAL COMPLEXITY: A SYNERGY OF MACHINE LEARNING, CULTURAL HETEROGENEITY, AND ESG INTEGRATION IN ECONOMIC-STATISTICAL FRONTIERS

By Tran Vo Hoa Tien, Phan Khanh Duy
DOI: 10.37550/tdmu.EJS/2025.02.641

Asia’s financial ecosystems, while distinct from Western paradigms, remain underexplored. This study integrates cultural finance, regime-switching machine learning, and ESG asymmetries into a novel analytical framework tailored to Asia’s unique financial architecture. We develop three models: a Hybrid LSTM-GARCH for crisis forecasting, a Bayesian Structural Equation Model capturing informal institutional dynamics, and a machine learning-enhanced Difference-in-Differences model to assess ESG impacts. Theoretically, we propose the Cultural-Statistical Nexus Framework, embedding sociocultural variables into predictive finance, the concept of institutional plasticity to explain regulatory divergence, and ESG Arbitrage Theory to highlight sustainability’s dual role as risk mitigator and speculative signal. Empirically, Confucian Risk Aversion reduces corporate leverage by 15 percent, ESG adoption lowers systemic risk but increases greenwashing, and hybrid models outperform conventional tools in FX crisis prediction. Practical implications include cultural-risk-adjusted capital buffers, AI-based liquidity tools, and region-specific ESG strategies, advancing a globally inclusive paradigm of financial science.