ESG and Banking Efficiency: The Mediating Role of Customized Value Added Intellectual Capital in ASEAN Countries

Desmy Riani, Diah Yudhawati, Hannisa Rahmaniar Hasnin and Fitria Ika Septiyani

Economic Studies journal, 2025, issue 8, 17-39

Abstract: This study aims to provide empirical evidence on the effect of environmental, social, and governance performance on bank efficiency, as well as the mediating role of customised value-added intellectual capital in the relationship. This study takes a sample of financial institutions listed on the stock exchange of the five ASEAN countries, namely Indonesia, Malaysia, the Philippines, Singapore and Thailand. The method used for sample selection is purposive sampling, with a total of 360 observations. Research testing uses robust standard error panel data estimation. The results showed that ESG performance has a positive effect on bank efficiency. Partially, social and governance performance has a positive and significant influence on improving efficiency. Furthermore, this study proves that Customised Value Added Intellectual Capital (CVAIC) has an important role in mediating the indirect effect of ESG performance on bank efficiency. This strengthens the resource-based theory by introducing a new dimension that highlights the importance of innovation as a crucial element in managing and improving the efficiency of intellectual capital. This study conducted a robustness test using the Value Added Intellectual Coefficient (VAIC). In addition, additional tests were conducted on a sub-sample of countries.

JEL-codes: D61 G21 O34 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:bas:econst:y:2025:i:8:p:17-39

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