IDEAS home Printed from https://ideas.repec.org/h/eme/isetez/s1571-038620220000030006.html
   My bibliography  Save this book chapter

Stable Financial Performance as the Antecedent of ESG Activity and Firm Value Relationship: An Evidence from Indonesia

In: Quantitative Analysis of Social and Financial Market Development

Author

Listed:
  • Yavida Nurim
  • Nung Harjanto
  • Paulina I. Prabawati
  • Nur R. Wijaya

Abstract

This study provides evidence that financial performance becomes a foundation of environmental, social, and governance (ESG) activities, and it will be appreciated positively by the market through the firm value. This examination is triggered by different views of ESG activities, such as philanthropy, doing business ethically, the indirect benefit for shareholders, or maintaining reputation. Therefore, it causes differences in ESG activity appreciation by market. Meanwhile, corporate social responsibility (CSR) activity is voluntary in Indonesia, so this activity aims to maintain reputation or avoid risk allegations according to environmental and social abuse. This study predicts that a stable firm’s financial performance concerns environmental and social issues. This study uses 139 companies from Indonesian Stock Market Data from 2013 to 2019, which fulfill the criteria of Thompson Reuters for ESG score. The empirical evidence shows that firm financial performance influences ESG score consistently as the antecedent. Further, ESG performance mediates the effect of firm financial performance on firm value. This research contributes to stakeholder theory, CSR practice, and good governance.

Suggested Citation

  • Yavida Nurim & Nung Harjanto & Paulina I. Prabawati & Nur R. Wijaya, 2022. "Stable Financial Performance as the Antecedent of ESG Activity and Firm Value Relationship: An Evidence from Indonesia," International Symposia in Economic Theory and Econometrics, in: Quantitative Analysis of Social and Financial Market Development, volume 30, pages 85-102, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:isetez:s1571-038620220000030006
    DOI: 10.1108/S1571-038620220000030006
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/S1571-038620220000030006/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/S1571-038620220000030006/full/epub?utm_source=repec&utm_medium=feed&utm_campaign=repec&title=10.1108/S1571-038620220000030006
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/S1571-038620220000030006/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/S1571-038620220000030006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Environmental performance; social performance; stakeholder theory; firm’s value; corporate governance; financial performance; Indonesia; F64; G3; G38;
    All these keywords.

    JEL classification:

    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

    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:eme:isetez:s1571-038620220000030006. 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: Emerald Support (email available below). General contact details of provider: .

    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.