IDEAS home Printed from https://ideas.repec.org/a/ajp/edwast/v9y2025i7p2119-2128id9127.html
   My bibliography  Save this article

The role of corporate governance and managerial overconfidence in enhancing firm value: The mediating effect of sustainability reporting and moderating role of audit quality

Author

Listed:
  • Putu Purnama Dewi

  • Ni Luh Putu Wiagustini

  • Ni Made Dwi Ratnadi

  • I Gusti Ayu Made Asri Dwija Putri

Abstract

This study investigates how managerial overconfidence and corporate governance influence firm value, with sustainability reporting quality as a mediating variable and audit quality as a moderating variable. The research analyzes 393 firm-year observations from 170 non-financial companies listed on the Indonesia Stock Exchange between 2017 and 2022. Results show that both managerial overconfidence (β = 0.536, p < 0.05) and corporate governance (β = 1.222, p < 0.05) significantly enhance firm value. Sustainability reporting quality positively moderates the effect of managerial overconfidence on firm value (β = 0.233, p < 0.05), although it does not mediate the relationship between corporate governance and firm value. Additionally, audit quality strengthens the positive impact of both managerial overconfidence (β = 0.087, p < 0.05) and corporate governance (β = 0.11, p < 0.05) on firm value. The study also finds that firm size negatively affects firm value (β = -0.0766), while sales growth and firm age have no significant effect. These findings highlight the importance of strong corporate governance, confident leadership, high-quality sustainability disclosures, and credible auditing in enhancing firm value in a competitive business environment.

Suggested Citation

  • Putu Purnama Dewi & Ni Luh Putu Wiagustini & Ni Made Dwi Ratnadi & I Gusti Ayu Made Asri Dwija Putri, 2025. "The role of corporate governance and managerial overconfidence in enhancing firm value: The mediating effect of sustainability reporting and moderating role of audit quality," Edelweiss Applied Science and Technology, Learning Gate, vol. 9(7), pages 2119-2128.
    • Handle: RePEc:ajp:edwast:v:9:y:2025:i:7:p:2119-2128:id:9127
    as

    Download full text from publisher

    File URL: https://learning-gate.com/index.php/2576-8484/article/view/9127/3018
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ajp:edwast:v:9:y:2025:i:7:p:2119-2128:id:9127. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Melissa Fernandes (email available below). General contact details of provider: https://learning-gate.com/index.php/2576-8484/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.