Influence of ESG on Company’s Value in East and South-East Asia

This study examines the impact of Environmental, Social, and Governance (ESG) factors on the valuation of firms across East and Southeast Asia, regions characterized by dynamic economic growth and diverse regulatory landscapes. Using a panel dataset of publicly listed companies from 2012 to 2022, we employed Generalized Least Squares (GLS) regression to assess how ESG scores affect firm market valuation. The analysis reveals that higher ESG scores correlate with increased firm value, with the environmental and overall ESG scores showing the most pronounced effects. This paper contributes to the growing literature on sustainable business practices by highlighting the economic benefits of ESG compliance in Asian markets. Furthermore, the research has practical implications for firms and portfolio managers, as it provides evidence of the possible benefits of implementing ESG practices. The findings suggest that investors are increasingly attentive to firms' ESG disclosures, influencing investment decisions and leading to a premium on company value. Future research is recommended to explore the causal mechanisms behind these relationships and to assess the impact of specific ESG subscores across different industries and corporate settings.