ESG and firm value: The moderating role of firm-specific contexts in Indonesia

Vanessa, Ardelia and Harindahyani, Senny and Eriandani, Rizky (2025) ESG and firm value: The moderating role of firm-specific contexts in Indonesia. Jurnal Akuntansi dan Teknologi Informasi, 18 (2). pp. 220-230. ISSN 1412-5994

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Abstract

Purpose – This study aims to examine the impact of environmental, social, and governance (ESG) performance on firm market value, while incorporating firm-specific contexts such as downside risk and upside potential as moderating variables. Methods – A quantitative approach was employed, using data from firms listed on the Indonesia Stock Exchange during 2018–2022 that had ESG scores from S&P Global Ratings. A total of 176 firm years were selected and analyzed using moderated regression analysis. Findings - The results reveal a negative relationship between ESG performance and firm value. However, financial risk and environmental risk significantly mitigate the negative impact of ESG on firm value, while financial stability and sales growth do not moderate the relationship. These findings emphasize that investors in emerging markets perceive ESG differently than those in developed economies. Implications - This research provides theoretical implications by enriching the literature on investor responses to ESG in developing countries, and practical insights for managers and investors in using ESG as a risk management tool. Originality - Unlike prior studies in developed markets that highlight ESG’s positive role, this study shows that Indonesian investors tend to view ESG negatively unless it serves as an effective risk-reduction mechanism, highlighting the importance of firm-specific contexts.

Item Type:	Article
Uncontrolled Keywords:	ESG; Environmental Risk; Financial Risk; Financial Stability; Firm Value
Subjects:	H Social Sciences > HF Commerce > HF5601 Accounting
Divisions:	Faculty of Business and Economic > Department of Accounting
Depositing User:	SENNY HARINDAHYANI
Date Deposited:	13 Jan 2026 02:26
Last Modified:	13 Jan 2026 04:08
URI:	http://repository.ubaya.ac.id/id/eprint/50063

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