Evaluating the impact of ESG performance on firm value: the moderating role of ownership type in Thailand

Nantana Ngamtampong and Anupong Sukprasert

Asian Review of Accounting, 2025, vol. 34, issue 4, 929-951

Abstract: PurposeThe purpose of this study is to concentrate on the moderating effect that ownership types, such as institutional ownership and minority shareholders, have on the link between environmental, social and governance (ESG) performance and the value of a firm.Design/methodology/approachThis study utilizes a dataset consisting of 422 firm-year observations from publicly traded Thai firms for the period from 2019 to 2023. This study employs pooled ordinary least squares (OLS) regression. Additional tests and a robustness check are performed to validate the findings.FindingsThe results indicate a strong positive impact of ESG performance on a firm’s value, thus indicating that sustainable practices contribute to long-term economic success. The type of ownership is significant for minority shareholders having a positive moderating impact on the connection between ESG performance and firm value, whereas institutional ownership does not. The findings indicate that minority shareholders might enhance ESG benefits by aligning with their own interests.Practical implicationsThe findings have practical implications for investors, managers and policymakers. The findings demonstrate that firms with a substantial proportion of minority shareholders have to ensure that ESG activities are transparent, effective and in accordance with shareholder expectations. This alignment can mitigate the adverse impact of minority ownership on firm value. Policymakers in Thailand and comparable emerging countries might utilize this study to promote ESG transparency and standards, therefore mitigating information asymmetry. Regulations facilitating minority shareholders’ access to information may enhance the beneficial moderating impact of their participation on ESG performance.Originality/valueThis study first demonstrated the moderating role of minority shareholders on the ESG-firm value relationship. This expands knowledge by focusing on ownership forms and their impact on ESG and firm value in emerging economies.

Keywords: Institutional ownership; Minority shareholders; Environmental; social and governance (ESG); Firm value; Investors; Ownership (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:arapps:ara-07-2024-0246

DOI: 10.1108/ARA-07-2024-0246

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