Profitability as a Moderating Factor in Voluntary Sustainability Report Disclosure and Firm Value in Indonesian Non-Bank Corporations

Corporate disclosure is the most important source of information about the firm for the outside investors. While some disclosure of public firms is mandated by regulation, firm managers can provide extra information at their discretion by making voluntary disclosures. On the other hand, even the reports required by regulation can be disclosed untruthfully. This thesis is structured in three chapters, each addressing a specific issue in voluntary disclosure and misreporting. In the first chapter, titled ``Voluntary Disclosure and Informed Trading'', I study the impact of informed trading on voluntary corporate disclosure in the presence of two frictions: cost of disclosure and value of manager's information. In the absence of both frictions, informed trading has no impact on disclosure even when traders are not certain whether the manager has information. If disclosure is costly, then informed trading reduces disclosure. Since traders can discover favorable information about the firm, additional disclosure of the information is not necessary. If manager's information is valuable for the firm, then informed trading increases disclosure. Since traders can discover unfavorable information about the firm, the manager with such information has less incentives to pool with uninformed managers and discloses to show that he is informed. I also show that informed trading can have both a positive and a negative real effect on the firm value by crowding in or crowding out information production in the firm. These results hold for general information structures and are robust if traders can choose how much information to acquire. The second chapter, titled ``Misreporting and Feedback Effect'' and co-authored with Prof. Hui Chen of the University of Zurich, studies the incentives of firms to misreport information in the presence of feedback effect from financial markets. Stock price often provides firms with new information, which can be used in the firms' subsequent real decisions. We examine how this informational feedback from the financial market affects a myopic firm manager's incentive to misreport, and how the misreporting further affects the firm's price and value. We find that the manager overstates his report more in the presence of feedback, but this misreporting brings forth both positive price and real effects for the firm. Intuitively, overstating the report encourages information production in the market because (a) it renders accounting reports less reliable as a source of information, and (b) investors expect higher trading profits from larger capital investment. The new incremental information improves investment efficiency when it is revealed to the firm manager through trading and used in the firm's subsequent investment decisions. As a consequence, the capital investment is higher when there is feedback effect. In the third chapter, titled ``Voluntary Disclosure and Margin Constraints'', I develop a dynamic model of voluntary corporate disclosure that explains clustering of negative announcements observed in practice. A manager may receive a signal about the firm's asset value and can disclose it to traders with margin constraints. I show that the manager postpones delivery of a negative signal until the margin constraints tighten. In contrast to previous studies, the clustering of announcements happens even if there are no negative updates in traders' beliefs about the firm value.

The purpose of this study is to examine the impact of intellectual capital, as measured by the proxy VAIC (Value Added Intellectual Coefficient), and sustainability report, as measured by the proxy SRDI (Sustainability Report Disclosure Index), on firm value (Tobin's Q), as mediated by financial performance (ROA) in companies listed on the LQ45 Index from 2018 to 2022. This study employs quantitative methods. With a study sample of 15 firms, the purposive sampling approach was employed to choose samples. Secondary data taken from the company's annual report and sustainability report, obtained 75 processed data, was utilized. With the assistance of Eviews 12 software, this study employs path analysis and panel data regression. The results showed that partially intellectual capital and sustainability report have no effect on firm value, ROA has a positive effect on firm value, and simultaneously intellectual capital, sustainability report, and ROA have a significant effect on firm value. Furthermore, both partially and simultaneously intellectual capital and sustainability report have a positive effect on ROA. The results of this study also show that ROA is not able to mediate the relationship between intellectual capital and sustainability report on firm value. Keywords: Intellectual Capital, Sustainability Report, Financial Performance, Firm Value

Business performance, investor expectations and growth prospects are reflected in the firm's value. High value makes a business more attractive to shareholders and investors and makes it easier for companies to obtain external funding. The aims of this research is to analyze the effect of tax avoidance, earnings persistence and sustainability report on firm value and analyze the effect of tax avoidance, earnings persistence and sustainability report on firm value with independent board of commissioners as a moderating variable. Research in mining sector companies listed on the IDX for the period 2020-2022 uses quantitative methodology. A total of 97 companies became the population of this study. Purposive sampling was used in this study to collect data into 77 samples. The data analysis stage uses three steps, namely prediction testing, classical assumption testing, and statistical analysis of variance with SPSS software. The findings show that tax avoidance has no effect on firm value. However, firm value is influenced by sustainability report elements and earnings persistence. In addition, the independent board of commissioners has an influence in terms of strengthening/weakening the relationship between earnings persistence and sustainability report on firm value. Meanwhile, in tax avoidance, the board of commissioners has no influence in strengthening / weakening the relationship to firm value. The conclusions of this study have consequences for regulators and prospective shareholder. Findings from this research can be useful for policy makers, especially those related to tax avoidance, earnings persistence and sustainability reports to increase firm value in Indonesia.

This study aimed to examine the effect of intellectual capital (VAICTM) and sustainability report disclosure (GRI-G4) on firm value (Tobin’s Q), with profitability (ROA) as the moderating variable. The study was quantitative. Moreover, the population was manufacturing companies listed on the Indonesia Stock Exchange for 5 years (2017-2021). The data collection technique used purposive sampling. In line with that, there were 25 companies as the sample. In total, 125 data samples were obtained. Furthermore, the data analysis technique used multiple linear regression and interaction test of Moderated Regression Analysis (MRA), with SPSS 21. As the result, it concluded that intellectual capital (VAICTM) had a positive effect on firm value. It meant, companies with strong intellectual capital could develop effective strategies in order to manage the sources, by adding some business values. Sustainability Report Disclosure (GRI- G4) had a positive effect on firm value. This meant since companies were aware of presenting activities, in the economy, environment, and society; the decision makers would have the information that they needed in increasing reputation capital from the companies. As a consequence, the firm value increased. Profitability (ROA) could not moderate the effect of intellectual capital on firm value. In other words, when companies had losses in a certain period, they would have efficiency in order to minimize the cost. Additionally, profitability (ROA) could not moderate the effect of sustainability report disclosure (GRI-G4) on firm value. It happened as profitability could not become the main support of companies’ policy in having social activities and making sustainability reports since companies were not always profitable.

Globalization fosters economic growth and intensifies competition within the business sector, highlighting the increasing importance of information transparency as a source of competitive advantage. Risk disclosures and Sustainability Reports play a pivotal role in enhancing stakeholder trust and boosting firm value through transparency. This study investigates the impact of risk disclosure and Sustainability Report disclosures on firm value, while also exploring the moderating role of Corporate Governance. Using purposive sampling, data from 80 companies listed in the Kompas 100 index in 2022 were analyzed using E-Views software. The findings reveal that risk disclosure positively influences firm value, whereas the disclosure of Sustainability Reports does not significantly affect firm value. Additionally, CG moderates the relationship between risk disclosure and firm value, reinforcing its negative impact, while CG strengthens the positive relationship between Sustainability Report disclosure and firm value. These results offer valuable insights into the role of transparency and governance in shaping corporate outcomes in a globalized market.

As awareness of sustainability issues grows, there is an increasing demand from governments, investors, and communities for companies to contribute to sustainability. Transparency regarding a company's sustainability performance, as reflected in sustainability reports, is seen as a way to enhance stakeholder confidence and potentially improve financial performance and firm value. The study focuses on companies listed on the SRI-KEHATI stock index between 2017 and 2021. A purposive sampling technique is employed to select the research sample. The researchers analyze secondary data from sustainability reports available on the company's website and financial reports from the Indonesia Stock Exchange. Using path analysis with SPSS 26, the researchers draw several key findings. Firstly, the disclosure of sustainability reports positively influences firm value. Secondly, sustainability report disclosure does not directly affect financial performance. Thirdly, financial performance has a positive impact on firm value. Lastly, financial performance does not mediate the relationship between sustainability report disclosure and firm value.

Purpose: This research aims to investigate the impact of environmental, social, and governance (ESG) risk on firm value and analyse the disclosure of materiality as a moderation variable. Methodology/Approach: We select research data through purposive sampling. We obtain ESG risk scores from Sustainalytics. Content analysis measures the materiality of sustainability disclosures. We processed 204 company data sets in Indonesia using moderated regression analysis techniques between 2020 and 2022. Findings: Empirical results show that greater environmental, social, and governance risks will lower firm value. Furthermore, the disclosure of materiality in the sustainability report can moderate the negative impact of ESG risk on the firm's value. Research Limitation/Implication: This research's implications are essential for standard-makers and governments to increase corporate attention to environmental, social, and governance risk aspects. The company's operations pose ESG risk, which negatively impacts market value as investors rely on this information for their decision-making. Furthermore, this research also implies that management understands the importance of materiality in sustainability reports. Originality/Value of paper: This research enriches existing literature on corporate risk, focusing on environmental, social, and governance risks. This paper also adds references to materiality disclosure in sustainability reports.

Research aims: This study examines does sustainability report disclosure and external assurance affect Indonesian publicly listed enterprises' financial performance. This study analyses how external assurance moderates sustainability disclosure and business financial performance.Design/Methodology/Approach: This quantitative analysis uses 71 Indonesia Stock Exchange-listed non-financial companies over 5 years. Financial records, company sustainability reports, and the Indonesia Stock Exchange database gave five years of data. Sustainability report disclosure and business financial performance were examined using multiple linear regression with external assurance as a moderating variable.Research findings: Economic and social disclosures in sustainability reports improve firm financial performance. External assurance improves financial outcomes directly and supports the favorable influence of sustainability disclosures on corporate performance. These findings demonstrate the strategic importance of transparent and validated sustainability reporting for financial success.Theoretical contribution/Originality: Results demonstrate that external assurance boosts sustainability disclosure and financial success. Credible reporting supports stakeholder theory by meeting expectations and building trust. It supports legitimacy theory, which says assurance fosters company social norms. Signaling theory says external assurance indicates to investors that the firm is transparent, improving its credibility.Practitioner/Policy implication: According to the findings, practitioners should use external assurance in sustainability reporting to promote transparency, stakeholder trust, and financial performance. According to theory, credible and externally confirmed disclosures boost business sustainability efforts. To encourage accountable and trustworthy corporate reporting, policymakers could incentivize or mandate external assurance.Research limitation/Implication: The study only covers Indonesian companies; thus, future research should expand or add qualitative perspectives to acquire deeper insights.

This study examines the effect of sustainability report disclosure and firm size on firm value, with profitability as a moderating variable. A quantitative approach was employed, using secondary data obtained from financial statements, annual reports, and sustainability reports of mining companies listed on the Indonesia Stock Exchange (IDX), as well as information from the companies’ official websites, covering the period 2021–2023. Firm value was measured using Tobin’s Q ratio, sustainability report disclosure was assessed through the Sustainability Report Disclosure Index (SRDI) based on GRI standards, firm size was proxied by the natural logarithm of total assets, and profitability was measured using return on assets (ROA). The findings reveal that sustainability report disclosure does not have a significant effect on firm value, whereas firm size exerts a positive and significant effect. Moreover, profitability does not moderate the relationship between sustainability report disclosure and firm value, but it does strengthen the relationship between firm size and firm value in the mining sector. The findings imply that companies should enhance the quality of sustainability reports and integrate them into core business strategies, while investors are advised to evaluate both profitability and report quality for better insights into firm value. Future research may expand samples, extend periods, or explore other industries for comparison.

This study examines the influence of sustainability reporting, earnings quality, and firm size on firm value among companies consistently listed in the SRI-KEHATI Index during the 2020–2024 period. The decline in firm value as measured by Tobin’s Q and the downward trend in earnings quality among sustainable companies raise questions about the effectiveness of sustainability practices and financial performance in enhancing market perception. This research aims to empirically analyze how the extent of sustainability report disclosure, earnings quality based on the ratio of operating cash flow to earnings, and firm size affect firm value. The study employs a quantitative approach using balanced panel data consisting of 59 observations, analyzed through multiple linear regression and classical assumption testing using SPSS. The results reveal that sustainability reporting has a significant negative effect on firm value, indicating that sustainability disclosures have yet to be perceived as positive signals by investors. Earnings quality also shows a significant negative effect, suggesting potential earnings management practices and investor skepticism toward reported financial information. Conversely, firm size significantly and positively influences firm value, reaffirming that larger firms are more capable of convincing the market regarding their stability and growth prospects. Collectively, the three variables explain 30.3% of variations in firm value. These findings conclude that sustainability reporting and earnings quality are not yet the primary determinants of firm value among sustainable firms in Indonesia, while firm size remains the most influential factor for investors. Keywords: sustainability reporting; earnings quality; firm size; firm value; SRI-KEHATI

This research aims to examine the impact of Sustainability Report Disclosure (SRD), Non-Performing Financing (NPF), and Capital Structure on Firm Value, with Financial Performance acting as an intervening variable, in multifinance companies. The study focuses on multifinance companies listed on the Indonesia Stock Exchange (IDX) during the 2024 period. The sample consists of multifinance companies listed on the IDX from 2020 to 2023 that consistently publish annual sustainability reports. The results indicate that SRD has insignificant positive effect on firm value, while it has significant positive effect on financial performance. NPF has a significant negative effect on firm value but an insignificant negative effect on financial performance. DER has a significant negative effect on firm value but an insignificant positive effect on ROA. Furthermore, ROA does not mediate the impact of SRD, NPF, and DER on firm value.

General Background: The oil and gas sector in Indonesia holds a strategic economic role while simultaneously facing increasing environmental, social, and governance demands from regulators and investors. Specific Background: Listed oil and gas companies are required to disclose sustainability reports alongside maintaining financial performance amid commodity price volatility during the 2019–2023 period. Knowledge Gap: Prior empirical studies report inconsistent findings regarding the relationships between sustainability reporting, firm size, and firm value, as well as the moderating role of profitability, particularly within capital-intensive and environmentally sensitive sectors. Aims: This study examines the relationships between sustainability reporting and firm size with firm value, and analyzes profitability as a moderating variable among oil and gas companies listed on the Indonesia Stock Exchange. Results: Using panel data regression on 50 firm-year observations, the findings show that sustainability reporting and firm size are positively and significantly associated with firm value. Profitability demonstrates a direct positive association with firm value and moderates the relationships between sustainability reporting and firm size with firm value. Novelty: The study extends prior research by integrating firm size as an explanatory variable and profitability as a moderating factor within the specific context of Indonesian oil and gas listed firms over a recent multi-year period. Implications: The results highlight the relevance of sustainability disclosure, corporate scale, and financial performance in shaping market valuation, offering insights for corporate management, investors, and policymakers concerned with sustainable corporate strategies in the oil and gas industry. Highlights: Sustainability disclosure shows a significant positive association with corporate valuation. Corporate scale demonstrates a statistically significant relationship with market-based value measures. Financial performance strengthens the relationships between disclosure practices, corporate scale, and valuation. Keywords: Pressure, ESG, Profitability

The purpose of this study is to examine the sustainability information that energy companies provide on social media and the relationship between that data and that which is shared in conventional sustainability reports. Based on stakeholder theory, we use a sample of Chinese A-share listed energy corporations in 2020 and refer to GRI G4 guidelines to conduct content analysis on their 17,451 tweets from the WeChat platform and 53 sustainability reports. The analysis results show the following: 1) both the sustainability disclosures of Chinese energy firms on WeChat platform and sustainability reports focus on investor and employee dimensions. Among them, the average proportion of investor dimension disclosure to total disclosure is 31.92% and 35.19% on social media and sustainability reports, respectively, and the average proportion of employee dimension disclosure is 27.22% and 17.92%, respectively. However, the two channels show a large difference in the environment and government dimensions. The average proportion of environment disclosure in sustainability reports is 13.44%, while on social media it is only 2.01%. Government disclosure in sustainability reports is 8.24% and as high as 20.43% on social media. (2) Chinese energy firms prefer to provide supplementary information on social media. For example, using the investor dimension as an example, the average proportion of non-GRI information on social media is 71.47%, while that of the sustainability report is only 48.56%. This study helps stakeholders to better understand sustainable information on social media.

Sustainability reporting is widely regarded as an essential factor in enhancing a firm's value. In light of its importance, this study examines the impact of three sustainability reporting indicators - sustainability reporting disclosure, sustainability reporting index, and sustainability reporting score - on firm value, as well as determining the role of firm size and leverage. Utilizing a sample of 200 companies listed on the Indonesia Stock Exchange (IDX) during the research period from 2013 to 2021, the results of panel data regression reveal that two of the three indicators have a significant impact on firm value. Specifically, the sustainability reporting index exerts a positive impact, while the sustainability reporting score has a negative effect on firm value. Furthermore, path analysis estimations reveal that sustainability reporting mediates the positive relationship between firm size and firm value. This study's empirical findings underscore that sustainability reporting plays a pivotal role in shaping a firm's value, and these insights can be valuable for businesses and investors seeking to understand the financial implications associated with sustainability reporting.

Companies that mitigate and improve the environment can take advantage of this as a marketing tool in general. Consumers will support companies that have a positive impact on their surroundings. One of the tools that can be used as a form of responsibility and marketing tool is a sustainability report. Sustainability report are reports published by organizations or companies that explain the economic, environmental, and social impacts as result of their operating activities. The report also explains about corporate culture and governance as well as its relationship with the company's strategy and commitment to maintain the sustainability of the triple bottom line (people, planet, profit). Sustainability reporting disclosure index (SRDI) are measured from 89 listed public companies in Indonesia. Regression analysis took place for examining the effect of SRDI to the corresponding firm value represented by Tobin’s Q. Only certain limited sample data showed that there’s a significance effect between sustainability report disclosure and firm value. Enterprises who haven’t disclose their sustainability report still worth high value in share trade. This condition occurs due to investors' decisions to invest are influenced by media coverage, economic conditions, and changes in stock prices.