Sustainability reporting quality and its impact on firm value: Evidence from emerging markets

Authors

  • I Gusti Agung Oka Sudiadnyani Politeknik Negeri Bali, Badung, Indonesia
  • I Made Agus Putrayasa Politeknik Negeri Bali, Badung, Indonesia
  • Anak Agung Gde Mantra Suarjana Politeknik Negeri Bali, Badung, Indonesia
  • Ni Made Wirasyanti Dwi Pratiwi Politeknik Negeri Bali, Badung, Indonesia
  • Made Dana Saputra Politeknik Negeri Bali, Badung, Indonesia

Keywords:

Sustainability Reporting Quality, Firm Value, Emerging Markets, Signaling Theory, Indonesia

Abstract

This study investigates the effect of sustainability reporting quality (SRQ) on firm value in the context of emerging markets, focusing on non-financial companies listed on the Indonesia Stock Exchange (IDX) during 2020–2023. Using a quantitative explanatory research design, the study employs secondary data from sustainability reports, annual reports, and market data. SRQ is measured through content analysis based on the Global Reporting Initiative (GRI) Standards (2021), while firm value is measured using Tobin’s Q, with firm size, profitability (ROA), and leverage (DER) as control variables. Panel data regression analysis with EViews is applied, and the model passes classical assumption tests for normality, homoscedasticity, and absence of autocorrelation. The results show that SRQ has a positive and statistically significant effect on firm value, supporting the signaling theory, which posits that high-quality disclosure signals a firm’s long-term viability and strong risk management to investors. Firm size and profitability also have significant positive effects on firm value, whereas leverage has a negative but insignificant effect. These findings contribute to the literature by emphasizing the importance of report quality rather than mere disclosure presence and provide practical implications for companies and regulators in emerging markets to enhance the credibility, transparency, and comparability of sustainability reports to boost investor confidence and corporate reputation.

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References

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Published

2025-08-14

How to Cite

Sudiadnyani, I. G. A. O., Putrayasa, I. M. A., Suarjana, A. A. G. M., Pratiwi, N. M. W. D., & Saputra, M. D. (2025). Sustainability reporting quality and its impact on firm value: Evidence from emerging markets. Tennessee Research International of Social Sciences, 7(2), 109–115. Retrieved from http://triss.org/index.php/journal/article/view/100

Issue

Vol. 7 No. 2: July-December 2025

Section

Research Articles

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