The effect of green investment, corporate social responsibility, and good corporate governance on firm value: The moderating role of financial statement fraud

Dara Nur Fadhilah () and Agus Herta Sumarto ()
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Dara Nur Fadhilah: Master of Management, Faculty of Economics and Business, Mercu Buana University
Agus Herta Sumarto: Master of Management, Faculty of Economics and Business, Mercu Buana University

Journal of Economics and Business Letters, 2026, vol. 6, issue 5, 40-56

Abstract: This study examines the effects of green investment, corporate social responsibility and corporate governance on firm value, while investigating the moderating role of financial statement fraud. As sustainability has become an increasingly important determinant of corporate value, concerns regarding the credibility of financial reporting have raised questions about whether sustainability initiatives consistently enhance market valuation. Focusing on Indonesian energy companies, this study explores whether financial statement fraud weakens the effectiveness of sustainability-related practices in creating firm value. The study employs a quantitative research design using panel data from 43 energy sector companies listed on the Indonesia Stock Exchange (IDX) during the 2022–2024 period. The sample was selected using purposive sampling from a population of 91 companies. Panel data Moderated Regression Analysis (MRA) was conducted using the Random Effects Model (REM) estimated with EViews 12. The findings indicate that green investment and corporate social responsibility have significant negative effects on firm value, whereas corporate governance does not significantly influence firm value. Furthermore, financial statement fraud significantly moderates the relationships between green investment, corporate social responsibility, corporate governance, and firm value by weakening the effectiveness of these sustainability and governance practices. This study contributes to the literature by providing empirical evidence that the value relevance of sustainability initiatives is contingent upon the integrity of financial reporting. The findings offer practical implications for corporate managers, investors, and regulators by emphasizing that credible financial reporting is essential for ensuring that sustainability and governance practices generate long-term firm value.

Keywords: green investment; corporate social responsibility; good corporate governance; financial statement fraud; firm value (search for similar items in EconPapers)
Date: 2026
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DOI: 10.55942/jebl.v6i5.2123

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