KnE Social Sciences

ISSN: 2518-668X

The latest conference proceedings on humanities, arts and social sciences.

The Effect of Environmental Social Governance, Research and Development, Intellectual Capital, and Leverage on Firm Value

Published date: Oct 10 2024

Journal Title: KnE Social Sciences

Issue title: 8th International Conference on Sustainability (8th ICoS): Entrepreneurship and Creative Economics

Pages: 394–420

DOI: 10.18502/kss.v9i28.17294

Authors:

Farah Nur Fauziahfarahnurfauziah@stiedarulfalahmojokerto.ac.idGraduate Student of Accounting, University of Merdeka Malang, Malang

Grahita ChandrarinGraduate School, Economic Science, University of Merdeka Malang, Malang

Diyah Sukanti CahyaningsihFaculty of Economic and Business, University of Merdeka Malang, Malang

Parawiyati ‎ Graduate School, Economic Science, University of Merdeka Malang, Malang

Abstract:

This research analyzes the influence of environmental social governance, research and development, intellectual capital, and leverage on firm value. Three control variables are included: size, age, and type of company. Secondary data in the form of ESG risk scores and annual reports of 22 companies listed on IDX ESG leaders for the 2018-2022 period with a total of 110 observations is used. The data analysis employs is multiple linear regression. The research results reveals that research and development influences company value, meaning that the level of R&D can impact the value and sustainability of the company. Intellectual capital influences company value, showing that increased productivity due to creativity, expertise that comes from knowledge, and the support of good systems and relationships can improve the company. Meanwhile, environmental social governance does not affect firm value because markets in developing countries are at a stage of economic growth and development that pays more attention to the scale and speed of economic growth and financial indicators than environmental, social, and governance responsibilities. Leverage does not effect firm value because changes in leverage tend not to affect stock prices in the market.

Keywords: firm value, environmental social governance, research and development, intellectual capital, leverage

References:

[1] Marantika A. Nilai Perusahaan (Firm Value) Konsep dan Implikasi. Cetakan 1, Saputra J, editor. Lampung: Anugerah Utama Raharja printing dan Publishing; 2012. p. 114.

[2] Fajaria AZ. Pengaruh Profitabilitas, Likuiditas, Leverage dan Pertumbuhan Perusahaan terhadap Nilai Perusahaan dengan Kebijakan Dividen sebagai Variabel Moderasi. Universitas Airlangga; 2018.

[3] Toti GK. Johan. Pengungkapan Environmental, Social, & Governance (ESG) terhadap Profitabilitas serta Nilai Perusahaan dalam Indeks SRI-KEHATI 2015-2020. Media Riset Bisnis & Manajemen. 2022;22(1):35–48.

[4] Triyani A, Setyahuni SW. Pengaruh Karakteristik Ceo Terhadap Pengungkapan Informasi Environmental, Social, and Governance (Esg). Jurnal Ekonomi dan Bisnis. 2020;21(2):72.

[5] Aydoğmuş M, Gülay G, Ergun K. Impact of ESG performance on firm value and profitability. Borsa Istanbul Review; 2022.

[6] Liu X, Zhang C. Corporate governance, social responsibility information disclosure, and enterprise value in China. J Clean Prod. 2016;142:1075–84.

[7] Chang YJ, Lee BH. The impact of ESG activities on firm value: Multi-level analysis of industrial characteristics. Sustainability (Basel). 2022;14(21):14444.

[8] Melinda A, Wardhani R. The effect of environmental, social, governance, and controversies on firms’ value: Evidence from Asia. International Symposia in Economic Theory and Econometrics. 2020 Jun;2020(27):147–73.

[9] Aboud A, Diab A. The impact of social, environmental and corporate governance disclosures on firm value: Evidence from Egypt. Journal of Accounting in Emerging Economies. 2018;8(4):442–58.

[10] Wu S, Li X, Du X, Li Z. The impact of ESG performance on firm value: The moderating role of ownership structure. Sustainability (Basel). 2022;14(21):14507.

[11] Ruan L, Liu H. Environmental, social, governance activities and firm performance: Evidence from China. Sustainability (Basel). 2021;13(2):1–16.

[12] Sumedrea S. Intellectual capital and firm performance: A dynamic relationship in crisis time. Procedia Econ Finance. 2013;6(13):137–44.

[13] Ningrum kiki EM. Efek Intellectual Capital dan Leverage Keuangan terhadap Profitabilitas Perusahaan Perbankan yang Terdaftar di Bursa Efek Indonesia (The effect of intellectual capital and financial leverage on profitability of bank firm listed in Indonesia stock.) Exchang. Jurnal Akuntansi Universitas Jember. 2014;(1):1–7.

[14] Nuryaman. The influence of intellectual capital on the firm’s value with the financial performance as intervening variable. Procedia Soc Behav Sci. 2015;211:292–8.

[15] Nguyen VC, Nguyen TNL, Tran TTP, Nghiem TT. The impact of financial leverage on the profitability of real estate companies: A study from Vietnam stock exchange. Management Science Letters. 2019;9(Special Issue 13):2315–26. https://doi.org/10.5267/j.msl.2019.7.023

[16] Noghondari AT, Noghondari AT. The mediation effect of financial leverage on the relationship between ownership concentration and financial corporate performance. 2017;10(3):697–714.

[17] Al-Slehat ZA. Impact of financial leverage, size and assets structure on firm value: Evidence from industrial sector, jordan. Int Bus Res. 2019;13(1):109.

[18] Rutin E, Efektif H, Mayor E, Minor E. Panduan indeks IDX ESG leaders. 2020;1:1–7.

[19] Lestari EP, Astuti D, Abdul Basir M. The role of internal factors in determining the firm value in Indonesia. Accounting. 2020;6(5):665–70.

[20] Rejeki HT, Haryono S. Pengaruh Leverage Dan Ukuran Perusahaan Terhadap Nilai Perusahaan Di Indonesia. Invoice: Jurnal Ilmu Akuntansi. 2021;3(1):1–9.

[21] Jensen MC, Meckling WH. Theory of the firm: Managerial behavior, agency costs and ownership structure. J Financ Econ. 1976;3(4):305–60.

[22] Freeman, McVea J. A stakeholder approach to strategic management. SSRN Electronic Journal. 2001;( January 2001).

[23] Hörisch J, Freeman RE, Schaltegger S. Applying stakeholder theory in sustainability management: Links, similarities, dissimilarities, and a conceptual framework. Organ Environ. 2014;27(4):328–46.

[24] Ulum I. Pengaruh Intellectual Capital Terhadap Kinerja Keuangan Perusahaan Perbankan di Indonesia. Universitas Diponegoro Semarang; 2007.

[25] Fahmi I (Handi D, editor). Analisis laporan Keuangan. Cetakan ke. Bandung: Alfabeta; 2014. p. 264.

[26] Indonesia Capital Market E. ESG at a glance: What is ESG? 2021.

[27] Otoritas Jasa Keuangan OJ. Roadmap Keuangan Berkelanjutan Tahap II (2021 – 2025). Volume 2. Otoritas Jasa Keuangan; 2021.

[28] Ariesta. Tingkatkan Awareness ESG, Pasar Modal Resmikan Microsite ESG. 2021.

[29] Sekretariat Nasional SDGS. Kementrian PPN/ Bappenas. 2015. Apa Itu SDGs.

[30] Wahyuni YS, Wicaksono ID. Peluncuran Indeks IDX ESG Leaders No. Peng- 00363/BEI.POP/11-2020. 2020;2020(November):11–2.

[31] IDX BEI. Penjelasan Nilai ESG. 2022.

[32] Del Monte A, Papagni ER. R&D and the growth of firms: Empirical analysis of a panel of Italian firms. Res Policy. 2003;32(6):1003–14.

[33] Zéghal D, Maaloul A. Analysing value added as an indicator of intellectual capital and its consequences on company performance. J Intellect Cap. 2010;11(1):39–60.

[34] Wang Z, Wang N, Liang H. Knowledge sharing, intellectual capital and firm performance. Manage Decis. 2014;52(2):230–58.

[35] Pulic A. VAIC TM – an accounting tool for intellectual capital management. International Journal Technology Management. 2000;20(5/6/7/8):702–14.

[36] Bontis N, Keow WC, Richardson S. Intellectual capital and business performance in Malaysian industries. J Intellect Cap. 2000;1(1):85–100.

[37] Chandra B. Agnes. Pengaruh Intellectual Capital terhadap Kinerja Perusahaan pada Perusahaan di Indonesia. Akuntabel. 2021;18(3):399–407.

[38] AlQershi N, Saufi RBA, Ismail NA, Mohamad MR Bin, Ramayah T, Muhammad NMN, et al. The moderating role of market turbulence beyond the Covid-19 pandemic and Russia-Ukraine crisis on the relationship between intellectual capital and business sustainability. Technological Forecasting and Social Change. 2023;186(PB):122081.

[39] Dzinkowski R. The measurement and management of intellectual capital in the public sector. Public Management Review. 2005;7:289–303.

[40] Gërguri S, Ramadani V. The impact of innovation into the economic growth. J Balkan Near East Stud. 2010;15(3):324–45.

[41] Kasmir. Analisis Laporan Keuangan. cetakan 13. Depok: PT. Raja Grafindo Persada; 2021. p. 151–171.

[42] Asimakopoulos G, Revilla A, Rodríguez A, International R. D sourcing, innovation and firm age: The advantage of ‘born-international sourcers.’. Technovation. 2022 Nov;2023:122.

[43] Rajagukguk W. Inovasi, Modal Manusia, dan Ekonomi Kreatif: Determinan Kebangkitan Ekonomi Studi Kasus Negara Berkembang Wilson Rajagukguk Program Pasca Sarjana Universitas Kristen Indonesia Jl. Mayjen Sutoyo No. 2, Cawang, Jakarta Timur, DKI Jakarta 13630, Ind. 2016;1–16.

[44] Akpinar AT, Akdemir A. Intellectual capital. Encyclopedia of Knowledge Management. 2010 Dec;1:452–61.

[45] Szirmai A, Naude W, Goedhuys M. Chambers, RT. Vol. 15, Etica e Politica. Oxford University Press; 2011. p. 583–605.

[46] Salvi A, Vitolla F, Giakoumelou A, Raimo N, Rubino M. Intellectual capital disclosure in integrated reports: The effect on firm value. Technol Forecast Soc Change. 2020 Jul;160:120228.

[47] Phusavat K, Comepa N, Sitko-Lutek A, Ooi KB. Intellectual capital: National implications for industrial competitiveness. Ind Manage Data Syst. 2012;112(6):866– 90.

[48] Kalkan A, Bozkurt ÖÇ, Arman M. The impacts of intellectual capital, innovation and organizational strategy on firm performance. Procedia Soc Behav Sci. 2014;150:700– 7.

[49] Chandrarin G. Metode Riset Akuntansi Pendekatan Kuantitatif. cetakan ke. Lestari PP, editor. Jakarta: Penerbit Salemba Empat; 2021. p. 1–222.

[50] Piri M, Jasemi M, Abdi M. Intellectual capital and knowledge management in the Iranian space industries. Vine. 2013;43(3):341–56.

[51] Nazari AJ, Herremans IM. Extended VAIC model: Measuring intellectual capital components. J Intellect Cap. 2007;8(4):595–609.

[52] Bosworth D, Rogers M. Market value, R&D and intellectual property: An empirical analysis of large Australian firms. Econ Rec. 2001;77(239):323–37.

[53] Cardillo G, Bendinelli E, Torluccio G. COVID-19, ESG investing, and the resilience of more sustainable stocks: Evidence from European firms. Bus Strategy Environ. 2022 Jun;32(1):602–23.

[54] Ningwati G, Septiyanti R, Desriani N. Pengaruh Environment, Social and Governance Disclosure terhadap Kinerja Perusahaan. Goodwood Akuntansi dan Auditing Reviu. 2022;1(1):67–78.

[55] Triyani A, Setyahuni SW, Kiryanto K. The effect of environmental, social and governance (ESG) disclosure on firm performance: The role of CEO tenure. Jurnal Reviu Akuntansi dan Keuangan. 2020;10(2):261.

[56] Jenice J, Kim SS. Pengaruh Penerapan Environmentan, Social, and Governance Terhadap Nilai Perusahaan di Indonesia. 2023;7(2):1646–53.

[57] Setyahuni SW, Handayani RS. On the value relevance of information on environmental, social, and governance (ESG): An evidence from Indonesia. Journal of Critical Reviews. 2020;7(12):50–8.

[58] Cahyaningsih DS, Chandrarin G. Managerial efficiency, innovation and firm value of the pharmaceutical industry in Indonesia. In: RSU International Research Conference 2019. Rangsit University; 2019. p. 1077–85.

[59] García-Manjón JV, Romero-Merino ME. Research, development, and firm growth. Empirical evidence from European top R&D spending firms. Res Policy. 2012;41(6):1084–92.

[60] Gupta K, Banerjee R, Onur I. The effects of R&D and competition on firm value: International evidence. Int Rev Econ Finance. 2017;51:391–404.

[61] Gupta K, Goel S, Bhatia P. Intellectual capital and profitability: Evidence from indian pharmaceutical sector. Vision (Basel). 2020;24(2):204–16.

[62] Ahmed SS, Guozhu J, Mubarik S, Khan M, Khan E. Intellectual capital and business performance: The role of dimensions of absorptive capacity. J Intellect Cap. 2020;21(1):23–39.

[63] Firer S, Williams SM. Intellectual capital and traditional measures of corporate performance. J Intellect Cap. 2003;4(3):348–60.

[64] Bagaskara RS, Titisari KH, Dewi RR. Pengaruh profitabilitas, leverage, ukuran perusahaan dan kepemilikan manajerial terhadap nilai perusahaan The effect of profitability, leverage, firm size and managerial ownership on firm value. Forum Ekonomi. 2021;23(1):29–38.

Download
HTML
Cite
Share
statistics

3 Abstract Views

59 PDF Downloads