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All Journal Journal of Innovation, Business Management and Entrepreneurship
Muhammad Roni Indarto
STIM YKPN Yogyakarta, Indonesia
Economics, Econometrics & Finance

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ESG Score and Firm Value: Evidence from ESG-Rated Issuers on the Indonesia Stock Exchange, 2015–2024 Muhammad Roni Indarto; Retno Kurnianingsih
Journal of Innovation, Business Management and Entrepreneurship Vol. 2 No. 1 (2026): May
Publisher : Universitas Aisyiyah Yogyakarta

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.31101/imbas.v2i1.4998

Abstract

This study examines whether ESG score affects firm value among ESG rated issuers listed on the Indonesia Stock Exchange (IDX), addressing mixed evidence from prior Indonesian studies on this relationship. Using a quantitative panel-data approach, the study draws on 90 IDX listed firms with available ESG scores for 2015-2024, yielding a final analytical sample of 597 firm year observations from 75 firms after listwise deletion. Firm value is proxied by Price to Book Value (PBV), with firm size, profitability, and liquidity as control variables. Because ESG score is time-invariant within firms over the observation period, the Fixed Effect model cannot estimate its coefficient, so a Random Effects model is adopted instead a methodological adjustment with implications for how similar ESG datasets should be analyzed. The results show that ESG score has no significant effect on firm value, while profitability has a significant positive effect, firm size shows a marginally significant negative effect, and liquidity has no significant effect. The overall regression model is statistically significant. These findings add to evidence that the Indonesian capital market has yet to fully price ESG performance into share valuations, and highlight a data-structure issue that future ESG value research using similar databases should account for.
Co-Authors Retno Kurnianingsih