The Effect of Intellectual Capital (IC), Good Corporate Governance (GCG) And Environmental, Social, And Corporate Governance (ESG) To Firm Value in Public Company in Indonesia

Erda Wiharta Destyasa and Yosman Bustaman ()
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Erda Wiharta Destyasa: Swiss German University
Yosman Bustaman: Swiss German University

A chapter in Proceedings of the 5th International Conference on Global Innovation and Trends in Economy 2024 (INCOGITE 2024), 2024, pp 843-857 from Springer

Abstract: Abstract Advancements in technology and evolving socio-economic landscapes have fostered dynamic industrial expansion, streamlining business operations and processes. Within this context, investments in both production capabilities and environmental stewardship are imperative for achieving success in this increasingly sophisticated and efficient industry. Environmental concerns have catalyzed the development of global initiatives such as the Sustainable Development Goals, the Paris Agreement, and programs advocated by the World Economic Forum, promoting the adoption of Green Investment strategies. These investments are centered on preserving natural resources, fostering renewable energy production, and championing environmental sustainability, thereby enhancing stakeholder perception and bolstering company valuation. Researchers are delving into the influence of intellectual capital, Environmental, Social, and Governance (ESG) factors, and sound Corporate Governance practices on the valuation of Indonesian companies listed on the ESG Leader Index, a previously unexplored area. Their objective is to elucidate their role as investment indicators. Through an analysis of panel data spanning three years sourced from the ESG Leader Index encompassing 74 companies from 2020 to 2022, the study examines the correlation between Intellectual Capital (IC), Corporate Governance, ESG factors, and Firm Value (FV). The findings reveal that Intellectual Capital and robust Corporate Governance positively impact the firm value of publicly traded companies in Indonesia. However, Environmental, Social, and Governance factors exhibit no discernible influence on the firm value of such companies. These findings underscore the notion that ESG considerations have yet to significantly factor into investment decisions concerning shares of public companies in Indonesia.

Keywords: Technological advances; green investment; Intellectual capital; ESG; Firm Value (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-585-0_57

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