The Effect of ESG Engagement on Firm Value with ESG Disparity as a Moderating Variable
DOI:
https://doi.org/10.24036/wra.v14.i1.4Keywords:
Firm value, ESG engagement, ESG disparity, and non-financial firms.Abstract
Purpose – This study examines the impact of ESG engagement on firm value and evaluates whether ESG disparity moderates the relationship between ESG engagement and firm value among non-financial firms in Indonesia over the period 2021–2024.
Design/methodology/approach – The sample was selected using purposive sampling, resulting in 71 non-financial firms. Panel data regression models were estimated using EViews 13. The analysis relies on secondary data obtained from corporate annual reports and Refinitiv Eikon.
Findings – The empirical results reveal that ESG engagement does not exert a significant effect on firm value. Furthermore, ESG disparity fails to demonstrate a negative moderating effect, indicating that it does not weaken the relationship between ESG engagement and firm value.
Originality/value – This study contributes to the emerging ESG literature in developing economies by incorporating ESG disparity as a moderating variable, thereby offering novel insights into the heterogeneity of ESG practices within the Indonesian context.
Research limitations/implications – The relatively short observation period and the exclusive focus on the non-financial sector may limit the generalizability of the findings. Moreover, the study does not employ alternative measurement specifications to assess model robustness, suggesting avenues for future research.
Article Type: Research paper
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