ESG DISCLOSURE, CORPORATE GOVERNANCE, AND FIRM VALUE: EVIDENCE FROM LISTED COMPANIES

Murtiadi Awaluddin, Lince Bulutoding

Abstract

This study investigates the relationship between environmental, social, and governance (ESG) disclosure, corporate governance mechanisms, and firm value in listed companies. As capital markets increasingly integrate non financial information into valuation processes, ESG disclosure and governance quality have become critical signals for investors. Using panel data from publicly listed firms and employing panel regression techniques, this research examines whether ESG disclosure and corporate governance enhance firm value, measured by Tobin’s Q. The findings provide empirical evidence that ESG disclosure has a positive and significant effect on firm value. Furthermore, corporate governance mechanisms not only directly enhance firm value but also strengthen the valuation effect of ESG disclosure. These results support signaling theory and agency theory, suggesting that transparent ESG reporting and effective governance reduce information asymmetry and agency conflicts, thereby increasing market valuation. The study contributes to the corporate finance and sustainability literature by integrating ESG disclosure and governance perspectives in explaining firm value, with important implications for managers, investors, and policymakers.

 

Keywords: Environmental, Social, and Governance (ESG) Disclosure; Corporate Governance Mechanisms; Firm Value; Tobin’s Q; Panel Data Analysis.

 

DOI https://doi.org/10.55463/issn.1674-2974.53.4.4


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