The Moderating Effect of Firm Size on the Relationship Between Environmental, Social, and Governance Factors and Firm Value: Evidence from Asia

Leni Yuliyanti; Ikin Solikin; Disman Disman; Dendi Mulyana

doi:10.24815/jdab.v12i1.39175

The Moderating Effect of Firm Size on the Relationship Between Environmental, Social, and Governance Factors and Firm Value: Evidence from Asia

Leni Yuliyanti, Ikin Solikin, Disman Disman, Dendi Mulyana

Abstract

This study investigates the influence of environmental, social, and governance (ESG) factors on firm value, focusing on companies in Asia from 2019 to 2022. Using a quantitative approach with a sample of 919 companies (resulting in 3,676 observations), this study employs moderated regression analysis (MRA) to examine the relationships. The findings reveal a significant impact of ESG factors on firm value, highlighting their relevance in the contemporary business landscape. Moreover, this study identifies a crucial yet underexplored aspect: the moderating role of firm size in the relationship between ESG factors and firm value, particularly within the Asian context. The results suggest that while ESG factors are universally influential, their effects may vary depending on firm size. These findings contribute to a deeper understanding of corporate sustainability practices and align with key theoretical perspectives, including signaling theory, stakeholder theory, and legitimacy theory. The study underscores the importance of transparent communication and ESG disclosure in enhancing firm value.

Keywords

Environmental, social, and governance (ESG); disclosure; firm size; firm value

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References

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DOI: https://doi.org/10.24815/jdab.v12i1.39175

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Accounting Department collaborated with IAI KAPd (Institute of Indonesia Chartered Accountant)
Faculty of Business and Economics
Syiah Kuala University
Kopelma Darussalam, Banda Aceh, Indonesia - 23111
ISSN: 2355-9462, E-ISSN: 2528-1143

Jurnal Dinamika Akuntansi dan Bisnis by Prodi Akuntansi Universitas Syiah Kuala is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Based on a work at http://www.jurnal.usk.ac.id/JDAB/index.