ESG AND THE MEDIATING ROLE OF INVESTMENT DECISIONS ON OWNERSHIP STRUCTURE AND FIRM VALUE
DOI:
https://doi.org/10.18623/rvd.v23.6163Keywords:
ESG, Emerging Market, Investment Decision, Ownership Structure, Firm ValueAbstract
Investment decisions made by investors and company management are not only based on a company's financial performance but also on environmental sustainability, which is considered a responsibility for the impact of company activities. This study examines energy companies listed on the Indonesian Stock Exchange, an emerging market with major environmental and governance challenges. Integrating ESG into corporate strategy is crucial as a form of responsibility and response to global climate change. This study used a purposive sampling technique and identified 27 energy sector companies during the 2017–2021 period, resulting in a total of 135 observations. ESG disclosures were obtained from sustainability reports and annual financial reports, which serve as proxies for company transparency and commitment to sustainable practices. The research data was analyzed using the Structural Equation Model (SEM) method with Partial Least Squares (PLS) techniques. The findings indicate that ESG, ownership structure, and investment decisions significantly influence firm value. Ownership structure influences investment decisions, but ESG has no significant impact on investment decisions. As a result, investment decisions only serve as a mediating variable in the relationship between ownership structure and firm value, while ESG demonstrates a direct relationship with firm value.
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