Stable Financial Performance as the Antecedent of ESG Activity and Firm Value Relationship: An Evidence from Indonesia

Nurim, Yavida; Harjanto, Nung; Prabawati, Paulina I.; Wijaya, Nur R.

doi:10.1108/s1571-038620220000030006

Cited by 3 publications

(3 citation statements)

References 21 publications

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“…In most cases, the results suggest that firms with higher environmental, social, and governance performance have better market value measures. These results are consistent with previous research showing that better total and individual ESG practices can improve FP (Ademi & Klungseth, 2022;Ahmad et al, 2021;Al Amosh et al, 2022;Alareeni & Hamdan, 2020;Carnini Pulino et al, 2022;Habib, 2022;Han et al, 2016;Hu et al, 2018;Kalia & Aggarwal, 2022;Nguyen et al, 2022;Nurim et al, 2022;Qiu et al, 2016). Accordingly, this is an opportunity for firm leaders to concentrate on adopting and enhancing ESG practices to improve FP and achieve continuous improvement.…”

Section: Conclusion and Policy Implicationssupporting

confidence: 91%

“…These results support H1a. These results are consistent with the findings of the following previous studies (Ademi & Klungseth, 2022;Ahmad et al, 2021;Al Amosh et al, 2022;Alareeni & Hamdan, 2020;Carnini Pulino et al, 2022;Habib, 2022;Kalia & Aggarwal, 2022;Nguyen et al, 2022;Nurim et al, 2022). Accordingly, this is considered an opportunity for firm decision-makers to concentrate on adopting and enhancing ESG practices to improve FP.…”

Section: Regression Analysessupporting

confidence: 91%

“…The results reveal a positive influence on FP. Nurim et al ( 2022 ) examine the influence of ESG activities on FP using a sample of 139 Indonesian firms from 2013 to 2019. The results confirm that FP consistently influences ESG performance and that ESG performance mediates the relationship between FP and firm value.…”

Section: Literature Review and Hypothesis Formulationmentioning

confidence: 99%

See 2 more Smart Citations

The Influence of Environmental, Social, and Governance (ESG) Practices on US Firms’ Performance: Evidence from the Coronavirus Crisis

Habib¹,

Mourad

2023

J Knowl Econ

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This study explores the influence of total and individual ESG practices and the coronavirus crisis on US firm performance (FP). A large and recent sample of 406 US firms that adopted ESG issues during 2016–2020 was used. This study uses the generalized least-squares (GLS) regression estimator, the dynamic analysis technique, and robustness tests. The results indicate that firms with heightened ESG practices have better performance measures. In most cases, the results suggest that firms with heightened environmental, social, and governance performances have better performance measures. The results suggest that the coronavirus crisis negatively affected FP measures. In addition, the analyses of the differences suggest significant distinctions in FP due to the coronavirus crisis. This study’s findings have important implications for stakeholders. Managers could benefit from the results of this examination by recognizing the status of ESG practices and FP before and during the coronavirus crisis and identifying the linkage between the fulfillment of ESG responsibilities and FP. This study provides noteworthy practical implications that could enable managers to develop strategies and policies for adopting and enhancing ESG practices to achieve the best performance. Furthermore, the results could influence trading processes as investors and financiers pursue attractive financial returns from investments in businesses concerned with ESG issues.

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Section: Conclusion and Policy Implicationssupporting

confidence: 91%

Section: Regression Analysessupporting

confidence: 91%

Section: Literature Review and Hypothesis Formulationmentioning

confidence: 99%

See 1 more Smart Citation

The Influence of Environmental, Social, and Governance (ESG) Practices on US Firms’ Performance: Evidence from the Coronavirus Crisis

Habib¹,

Mourad

2023

J Knowl Econ

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The role of ESG in enhancing firm resilience to geopolitical risks: An eastern European perspective

Reyad,

Ayesha,

Iqbal

et al. 2024

Bus Strat Dev

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Geopolitical risk (GPR) presents a profound challenge to firms, particularly in regions with persistent political instability. In Eastern Europe, where conflicts like the Russia–Ukraine war heighten uncertainty, firms face immediate financial threats and long‐term strategic vulnerabilities. This study examines the impact of GPR on firm performance, focusing on the moderating role of environmental, social, and governance (ESG) practices as a resilience mechanism. Using a comprehensive dataset of 1360 publicly listed firms across Poland, Russia, and Ukraine from 2014 to 2023, the analysis employs a base panel data regression model, followed by a two‐step generalized method of moments (GMM) approach to account for endogeneity and ensure robustness. The findings reveal a significant negative relationship between GPR and firm performance, measured by return on assets (ROA). Firms exposed to higher geopolitical risks exhibit weaker profitability. However, firms with stronger ESG performance demonstrate greater resilience, as the GMM results show that ESG engagement moderates the adverse effects of GPR on profitability. This suggests that ESG initiatives enhance adaptive capacity in volatile geopolitical environments. In terms of policy implications, ESG should be promoted as a key strategy for firms operating in politically unstable regions. Governments and regulatory bodies may consider mandatory ESG disclosures and incentivizing sustainability practices to help firms mitigate external risks, improve financial resilience, and attract stable investment. Aligning corporate strategies with global ESG standards is essential to ensuring business sustainability amid ongoing geopolitical threats.

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Nexus between ESG reporting and financial performance in the banking sector

Debnath,

Bhuyan,

Das

et al. 2024

CLGR

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The study evaluates the environmental, social, and governance (ESG) reporting performance of public sector banks (PSBs) and private sector banks (PvtBs) in India. Additionally, it seeks to investigate the impact of ESG performance on the financial performance (FP) of 32 companies during the 2022 financial year. Data on ESG performance were gathered from CRISIL (formerly Credit Rating Information Services of India Limited) reports, while FP data were obtained from the companies’ annual reports. The assessment of FP utilized accounting and market-based measures, and empirical exploration was conducted using ordinary least square (OLS) regression. The Mann-Whitney U test and box plot were employed to evaluate significant variations in ESG performance between PSBs and PvtBs. The findings suggest that Indian banking companies prioritize governance and social aspects over environmental concerns (Kumar & Prakash, 2019) and highlight unequal ESG performance between PSBs and PvtBs. Furthermore, the study indicates that ESG performance significantly and positively impacts FP across accounting and market measures (Ersoy et al., 2022). The implications of these findings are pertinent to regulators and policymakers, emphasizing the importance of transparent and comprehensive ESG disclosure for informed decision-making and the fulfilment of societal responsibilities. The present study examining the nexus between ESG performance and FP is confined to selected banks for a single financial year due to limited access to reliable data.

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Stable Financial Performance as the Antecedent of ESG Activity and Firm Value Relationship: An Evidence from Indonesia

Cited by 3 publications

References 21 publications

The Influence of Environmental, Social, and Governance (ESG) Practices on US Firms’ Performance: Evidence from the Coronavirus Crisis

The Influence of Environmental, Social, and Governance (ESG) Practices on US Firms’ Performance: Evidence from the Coronavirus Crisis

The role of ESG in enhancing firm resilience to geopolitical risks: An eastern European perspective

Nexus between ESG reporting and financial performance in the banking sector

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