<![CDATA[This study seeks to determine how environmental, social and governance (ESG) scores and corporate political connections jointly shape stakeholder reactions, captured through firm-level valuation (Tobin’s Q) and stock returns, among Indonesian listed companies. Using firm-level panel data for listed companies over 2020-2023, this quantitative study applies Generalized Least Squares estimation in Stata, and augments the analysis with contextual information drawn from peer-reviewed journals and reputable online sources. Stronger ESG scores raise firm valuations (Tobin’s Q) without enhancing total stock returns, whereas political connections lower Tobin’s Q by about 0.17 yet deliver an average excess return of roughly 0.69 percentage points. The evidence indicates that sustainability credentials and political affiliations influence performance in mutually reinforcing yet distinct ways: stronger ESG scores are associated with durable gains in enterprise value, whereas political connections translate into only short-lived share-price uplifts. Consequently, the findings encourage executives to invest in substantive ESG improvements as a foundation for lasting value creation, while cautioning regulators that the abnormal returns enjoyed by politically connected firms may stem from rent-seeking rather than genuine efficiency.]]>
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