Ownership structure and ESG performance: an empirical analysis of Indonesian companies

Purpose This study investigates how ownership structure affects environmental, social and governance (ESG) performance in Indonesian companies using stakeholder theory and resource-based view perspectives. Design/methodology/approach The study analyzes 41 Indonesian companies over 2018–2022, generating 205 firm-year observations. Data were collected from multiple databases with comprehensive robustness testing, including lag-1 analysis, propensity score matching with entropy balancing and generalized method of moments to address endogeneity concerns. Findings Foreign ownership, government ownership and institutional ownership demonstrate significant positive effects on ESG performance, while blockholder ownership exhibits significant negative effects. Results confirm that stakeholders with strong ESG expectations drive corporate behavior, with different ownership types providing unique strategic resources including international expertise and institutional legitimacy. Conversely, blockholder concentration creates stakeholder conflicts and constrains ESG resource development. Research limitations/implications The study is limited by its focus on ownership variables, short observation period and geographic concentration on Indonesia. Findings extend stakeholder theory and resource-based view by demonstrating how stakeholder groups influence corporate ESG behavior. Practical implications Companies should optimize ownership composition through collaboration with foreign or institutional investors. Policymakers can develop evidence-based regulations including tax incentives. Originality/value This study simultaneously analyzes four ownership types within Indonesia's unique institutional environment, providing novel insights into ownership–ESG dynamics.