ESG and Firm Value: The Moderating Role of Leverage in ASEAN Non-Financial Firms
By: Amrie Firmansyah and Ammar Ramadhan
References
- Alsayegh, M. F., Rahman, R. A., & Homayoun, S. (2020). Corporate economic, environmental, and social sustainability performance transformation through ESG disclosure. Sustainability, 12(9), 1–20. https://doi.org/10.3390/su12093910
- Anabtawi, A., Azimli, A., & Anabtawi, A. (2025). ESG performance and firm value: The moderating roles of ESG controversies and gender diversity in Western Europe. Investment Analysts Journal, 0(0), 1–20. https://doi.org/10.1080/10293523.2025.2578075
- Aprilina, V., Lestari, T., Mulyasari, W., & Indriana, I. (2025). Media exposure as a moderator in the ESG-firm value relationship. Financial And Credit Activity: Problems Of Theory And Practice, 2(61), 597–608. https://doi.org/10.55643/fcaptp.2.61.2025.4699
- Arif, M., Sajjad, A., Farooq, S., Abrar, M., & Joyo, A. S. (2021). The impact of audit committee attributes on the quality and quantity of environmental, social and governance (ESG) disclosures. Corporate Governance, 21(3), 497–514. https://doi.org/10.1108/CG-06-2020-0243
- ASEAN Taxonomy Board. (2023). ASEAN taxonomy for sustainable finance: version 2. https://asean.org/book/asean-taxonomy-for-sustainable-finance-version-2/
- Battisti, E., Bollani, L., Miglietta, N., & Salvi, A. (2020). The impact of leverage on the cost of capital and market value: Evidence from Sharīah-compliant firms. Management Research Review, 43(9), 1081–1096. https://doi.org/10.1108/MRR-01-2019-0007
- Cardillo, M. A. dos R., & Basso, L. F. C. (2025). The ESG disclosure–performance paradox in BRICS: Evidence from shareholder returns and firm value. Sustainable Futures, 10, 101510. https://doi.org/10.1016/j.sftr.2025.101510
- Chung, K. H., & Pruitt, S. W. (1994). Simple approximation of Tobin’s q. Financial Management, 23(3), 70–74. https://doi.org/10.2307/3665623
- Connelly, B. L., Certo, S. T., Ireland, R. D., & Reutzel, C. R. (2011). Signaling theory: a review and assessment. Journal of Management, 37(1), 39–67. https://doi.org/10.1177/0149206310388419
- Difalla, S. A. (2026). Statistical analysis to measure the impact of ESG disclosure on firm value and stock performance: Evidence from Saudi Arabia. Journal of Statistics Applications &Probability, 15(3), 403–453. https://doi.org/10.18576/jsap/050306
- Dohrmann, M. (2025). Environmental performance and firm value: The moderating role of ESG-executive compensation. Sustainable Development, 33, 6215–6227. https://doi.org/10.1002/sd.3454
- Ehsan, S., Nazir, M. S., Nurunnabi, M., Khan, Q. R., Tahir, S., & Ahmed, I. (2018). A multimethod approach to assess and measure corporate social responsibility disclosure and practices in a developing economy. Sustainability, 10, 1–18. https://doi.org/10.3390/su10082955
- Fang, M., Hong, J., Nie, H., & Shen, X. (2025). Environmental regulation, ESG, and firm value: evidence from China. Applied Economics, 57(58), 10009–10024. https://doi.org/10.1080/00036846.2024.2425117
- Faure, C., Nys, E., & Tarazi, A. (2025). Subcategories of ESG controversies and firm value. Finance Research Letters, 79, 1–11. https://doi.org/10.1016/j.frl.2025.107260
- Freeman, R. E. (1984). Strategic management: a stakeholder approach. In Pitman series in business and public policy CN - HD30.28 .F73 1984. Pitman.
- Freeman, R. E. (2010). Strategic management: a stakeholder approach. Cambridge University Press.
- Freeman, R. E., Phillips, R., & Sisodia, R. (2020). Tensions in stakeholder theory. Business and Society, 59(2), 213–231. https://doi.org/10.1177/0007650318773750
- García-Sanchez, I.-M., Hussain, N., Aibar-Guzman, C., & Aibar-Guzman, B. (2025). ESG controversies and external assurance: Examining their impact on firm value and image. The British Accounting Review, 1–28. https://doi.org/10.1016/j.bar.2025.101704
- Hassan, M. K., Lahyani, F. E., & Albitar, K. (2025). Beyond quotas: how ESG disclosure and critical mass of female directors shape firm value in France. Journal of Applied Accounting Research, 27(1), 64–85. https://doi.org/10.1108/JAAR-02-2025-0048
- Huang, J., Hu, P., Wang, D. D., & Wang, Y. (2025). The double signal of ESG reports: Readability, growth, and institutional influence on firm value. Sustainability, 17, 1–16. https://doi.org/10.3390/su17062514
- Kraus, A., & Litzenberger, R. H. (1973). A state-preference model of optimal financial leverage. The Journal of Finance, 28(4), 911–922. https://doi.org/10.1111/j.1540-6261.1973.tb01415.x
- Lee, J., & Nam, D. (2026). ESG shareholder engagement and firm value: evidence from Korea National Pension Service. Applied Economics, 00(00), 1–16. https://doi.org/10.1080/00036846.2026.2619792
- Li, X., & You, Z. (2025). The impact of ESG performance on firm value in the Chinese market. Finance Research Letters, 85(PC), 108114. https://doi.org/10.1016/j.frl.2025.108114
- Lu, D., Wu, H., Xing, C., Xu, J., & Zhang, G. (2026). Natural disasters, corporate ESG performance and firm value. International Review of Economics and Finance, 107, 105082. https://doi.org/10.1016/j.iref.2026.105082
- Mahmood, A., Terzani, S., Luca, F. De, & Djajadikerta, H. G. (2025). The effect of ESG disclosure on firm value in the European context. Management Decision, 1–32. https://doi.org/10.1108/MD-10-2024-2480
- Makhija, H., Raghukumari, P. S., & Sethiya, A. (2025). Does board gender diversity moderate the impact of ESG on firms’ economic value added ? Evidence from an emerging economy. International Journal of Productivity and Performance Management, 74(3), 819–840. https://doi.org/10.1108/IJPPM-12-2023-0664
- Monteiro, A. P., Cepêda, C., Borges, A. P., & Vieira, E. (2024). Does CSR committee presence, stakeholder engagement, gender equality (SDG 5) and firm value influence ESG performance reporting? An EU pre and during Covid-19 analysis. Measuring Business Excellence, 1–22. https://doi.org/10.54499/UIDB/04752/2020
- Nguyen, T. L. A., & La, T. T. T. (2025). ESG And firm value in Vietnam: The moderating role of profitability. International Journal of Analysis and Applications, 23, 1–15. https://doi.org/10.28924/2291-8639-23-2025-234
- Ochoa-marquez, P., & Gehrke, C. J. (2026). Financial payoff of sustainability in Mexican companies: ESG performance, profitability and firm value. Sustainability, 1–11. https://doi.org/10.3390/su18020682
- OECD. (2023). Sustainable Finance in Asia: ESG and climate-aligned investing and policy considerations. https://www.oecd.org/finance/Sustainable-finance-Asia-ESG-climate-aligned-investing-policy-considerations.pdf
- Patekar, A., & Mahajan, S. (2025). Unraveling the ESG-firm value nexus: A systematic analysis of current literature and emerging themes. Business Performance Review, 3(2), 49–65. https://doi.org/10.22495/bprv3i2p5
- Prabawati, P. I., & Rahmawati, I. P. (2022). The effects of environmental, social, and governance (ESG) scores on firm values in ASEAN member countries. Jurnal Akuntansi Dan Auditing Indonesia, 26(2), 119–129. https://doi.org/10.20885/jaai.vol26.iss2.art2
- Rashwan, M., Farouk, N., & Pasha, R. (2025). Can ESG strategies drive firm value growth in the MENA region? Sustainability, 17, 1–30. https://doi.org/10.3390/su17177894
- Salama, A. A., Bilal, A. O. A., Gamer, S. D., Alzahrani, A. S., Jawadi, R. H., & Alamri, S. M. (2026). How ESG performance and sustainability governance shape SDGs disclosure and firm value: Evidence from OECD firms. Sustainability, 1–27. https://doi.org/10.3390/su18052474
- Sari, A. . P. A. M. P., & Tjahjadi, B. (2026). Financial leverage, political connection, profitability and firm value during global crisis era: A moderated mediation analysis. Montenegrin Journal of Economics, 22(1), 123–134. https://doi.org/10.14254/1800-5845/2026.22-1.11
- Shubita, M. F. (2024). The effect of tax avoidance on firm value with leverage as a moderating variable. Investment Management and Financial Innovations, 21(2), 336–344. https://doi.org/10.21511/imfi.21(2).2024.27
- Singh, M., & Kumar, G. (2025). Unveiling climate risk’s role in ESG and firm value dynamics: an emerging market perspective. Studies in Economics and Finance, 1–30. https://doi.org/10.1108/SEF-12-2024-0883
- Spence, M. (1973). Job market signaling. The Quarterly Journal of Economics, 87(3), 355–373. https://doi.org/10.2307/1882010
- Sun, J. K., & Zhang, D. (2026). Powering innovation through sustainability: exploring the effects of firm ESG performance on innovation volume and value. Social Responsibility Journal, 21(7), 1503–1528. https://doi.org/10.1108/SRJ-10-2024-0737
- Surya, R. A. S., Andreas, E. H. H., & Zarefar, A. (2026). ESG performance and firm value in Indonesia: Do political connections and external assurance matter? Journal of Risk and Financial Management, 19(2), 1–19. https://doi.org/10.3390/jrfm19020131
- Tran, D. L., & Nguyen, Q. K. (2026). The moderating effect of monetary policy and ESG practices on the relationship between leverage and firm value in ASEAN-5 emerging countries. Applied Economics, 58(8), 1563–1578. https://doi.org/10.1080/00036846.2025.2467289
- Tulcanaza-Prieto, A. B., Lee, Y., & Anzules-Falcones, W. (2024). The moderating role of corporate governance in the relationship between leverage and firm value: evidence from the Korean Market. Risks, 12(1), 1–19. https://doi.org/10.3390/risks12010011
- Utami, W., Pernamasari, R., Chairunisa, M., & Tanjung, J. (2025). Competitive advantage in moderating the three pillars of ESG on firm value. International Journal of Economics and Financial Issues, 15(4), 292–298. https://doi.org/10.32479/ijefi.19099
- Wijayanto, A., & Supanto, F. (2025). ESG performance, firm value, and the mediating role of financial performance: evidence from top ESG companies in the largest ASEAN economies. Studies in Business and Economics, 20(3), 366–386. https://doi.org/10.2478/sbe-2025-0059
- Wu, M., Zhu, Y., & Zhang, F. (2025). Second-generation involvement, ESG performance and family firm value. Applied Economics Letters, 32(5), 592–595. https://doi.org/10.1080/13504851.2023.2276365
- Xu, Z., Liu, D., Li, Y., & Guo, F. (2025). ESG and stock price volatility risk: Evidence from Chinese A-share market. North American Journal of Economics and Finance, 75, 102277. https://doi.org/10.1016/j.najef.2024.102277
- Yanrou, H., Fun, C. S., Herda, N., & Abdullah, N. (2025). Moderating role of capital market openness between ESG and firm value among public listed companies in China. Management And Accounting Review, 24(2), 447–469. https://doi.org/10.24191/MAR.V24i02-17
- Yu, Z., Farooq, U., Alam, M. M., & Dai, J. (2024). How does environmental, social, and governance (ESG) performance determine investment mix? New empirical evidence from BRICS. Borsa Istanbul Review, 24(3), 520–529. https://doi.org/10.1016/j.bir.2024.02.007
- Yuan, W., Zhang, M., Guo, X., & Jiang, Y. (2025). ESG disclosure and firm long-term value: The mediating effect of tax avoidance. Finance Research Letters, 83, 107728. https://doi.org/10.1016/j.frl.2025.107728
- Zhao, H., He, Z., Banerjee, T., & Han, T. (2025). ESG rating divergence and firm value: evidence from China. Applied Economics Letters, 00(00), 1–7. https://doi.org/10.1080/13504851.2024.2449560
Language: English
Page range: 289 - 309
Published on: Sep 10, 2026
Published by: Lucian Blaga University of Sibiu
In partnership with: Paradigm Publishing Services
Keywords:
Related subjects:
© 2026 Amrie Firmansyah, Ammar Ramadhan, published by Lucian Blaga University of Sibiu
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.