Sustainability reporting quality and firm value in ASEAN+3: A series moderation model

Abstract

AbstractResearch on sustainability and firm value has increased recently. However, there is little evidence in this context from ASEAN+3 (i.e., three major Asian economies [South Korea, Japan, and China] and six dynamic economies in the ASEAN region [Indonesia, Malaysia, Singapore, the Philippines, Thailand, and Vietnam]). Therefore, this study explores the impact of sustainability reporting quality on firm value in the ASEAN+3 context. The study also explores the moderating role of environmental, social, and governance (ESG) practices, board gender diversity, board size, and the number of board meetings on the “sustainability reporting quality—firm value nexus.” Data collected from Thomson Reuters Asset4 with a sample size of 923 firms during the period 2019–2023 (4615 firm‐year observations). Regression analysis techniques used include pooled ordinary least squares, fixed effects, and random effects models. The analysis results show new and unique discoveries from ASEAN+3. First, sustainability reporting quality has a positive impact on firm value. Second, ESG practices negatively moderate the “sustainability reporting quality—firm value nexus.” Third, the higher number of board members reduces the “sustainability reporting quality—firm value nexus”; however, the negative level of major economies is lower than that of ASEAN countries. Finally, the firm with more independent female directors strengthens the “sustainability reporting quality—firm value nexus.” This study enriches signaling theory and agency theory by highlighting the complex relationship between components and firm value. To enhance firm value within ASEAN+3, policymakers should prioritize standardized ESG reporting regulations and transparent communication channels; stakeholders must hold managers accountable for genuine ESG implementation and high‐quality reporting; and businesses should prioritize board diversity, particularly independent female directors, alongside sustainability training.