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ESG Performance and State Ownership in Firm Valuation: Perspectives from Singapore Companies

Author

Listed:
  • Gayle Tan

    (School of Business, Singapore University of Social Sciences, 463 Clementi Road, Singapore 599494, Singapore)

  • Youngho Chang

    (School of Business, Singapore University of Social Sciences, 463 Clementi Road, Singapore 599494, Singapore)

Abstract

This study examines how Environmental, Social, and Governance (ESG) performance and state ownership affect firm valuation in Singapore and determines if the effects of ESG on firm valuation are more pronounced in state-owned companies. The data comprises 51 companies listed on the Singapore Stock Exchange with complete ESG and financial information during the five-year period from 2018 to 2022. This study finds that only social practices positively and statistically significantly affect stock prices. Overall ESG values, and the other two dimensions of ESG appear not to be statistically significant. State ownership appears to positively and significantly affect the stock price. The finding suggests that the Singapore government’s substantial influence over corporate practices could accentuate the difference in market perception of ESG efforts between SOEs and companies. The study provides useful and practical implications to policymakers, managers and investors, which affect firm financial and operational performance.

Suggested Citation

  • Gayle Tan & Youngho Chang, 2024. "ESG Performance and State Ownership in Firm Valuation: Perspectives from Singapore Companies," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 26(02), pages 1-41, June.
    • Handle: RePEc:wsi:jeapmx:v:26:y:2024:i:02:n:s1464333224500054
    DOI: 10.1142/S1464333224500054
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    More about this item

    Keywords

    Sustainability; responsible business practices; state-owned enterprises (SOE); stock price; panel regression model;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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