The Moderating Effect of Firm Size on the Relationship Between Environmental, Social, and Governance Factors and Firm Value: Evidence from Asia

This study investigates the influence of environmental, social, and governance (ESG) factors on firm value, focusing on companies in Asia from 2019 to 2022. Using a quantitative approach with a sample of 919 companies (resulting in 3,676 observations), this study employs moderated regression analysis (MRA) to examine the relationships. The findings reveal a significant impact of ESG factors on firm value, highlighting their relevance in the contemporary business landscape. Moreover, this study identifies a crucial yet underexplored aspect: the moderating role of firm size in the relationship between ESG factors and firm value, particularly within the Asian context. The results suggest that while ESG factors are universally influential, their effects may vary depending on firm size. These findings contribute to a deeper understanding of corporate sustainability practices and align with key theoretical perspectives, including signaling theory, stakeholder theory, and legitimacy theory. The study underscores the importance of transparent communication and ESG disclosure in enhancing firm value.