Claim Missing Document
Check
Articles

Found 1 Documents
Search
Journal : Asian Journal of Applied Business and Management (AJABM)

ESG Rating and Firm Value in Emerging Market: Investigating the Mediating Role of Financial Performance Wahyono Wahyono; Anastasya Laga; Rizki Kurniawati; Dwi Rahmita Sari; Mukhzarudfa Mukhzarudfa; Ratih Kusumastuti; Wirmie Eka Putra
Asian Journal of Applied Business and Management Vol. 3 No. 4 (2024): November 2024
Publisher : PT FORMOSA CENDEKIA GLOBAL

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.55927/ajabm.v3i4.12442

Abstract

This study examines the impact of ESG Rating on Firm Value, with Financial Performance as a mediating variable, using a sample of companies included in the IDX ESG Leaders index for the years 2021–2023. The analysis was conducted using PROCESS Macro and bootstrapping methods to identify the direct and indirect effects of ESG practices on Firm Value. The findings reveal that ESG Rating does not have a direct effect on Firm Value, nor does Financial Performance mediate this relationship. These results suggest that in emerging markets like Indonesia, the direct financial benefits of ESG practices are not fully recognized by investors, possibly due to a lower level of awareness and appreciation of sustainability. This study offers insights into the challenges and opportunities for ESG implementation among companies in emerging markets to enhance long-term firm value.