Indonesian Journal of Business and Entrepreneurship (IJBE)
Vol. 9 No. 2 (2023): IJBE, Vol. 9 No. 2, May 2023

Corporate Environmental, Social, and Governance (ESG) and SMEs' Value (a Lesson From Indonesian Public SMEs)

Bintang Narotama (School of Business, IPB University)
Noer Azam Achsani (School of Business, IPB University)
Moch. Hadi Santoso (School of Business, IPB University)



Article Info

Publish Date
22 May 2023

Abstract

Corporate Environmental, Social, and Governance (ESG) has prominently emerged to address sustainability challenges. Despite the positive implications in the extant literature, corporate ESG performance was given less attention by small-medium enterprises (SMEs). Hence, this study aims to investigate corporate ESG performance in Indonesian public SMEs and its influence on firm value. The study was conducted on 17 non-financial SMEs consistently listed on IDX PEFINDO25 from 2016 to 2020. The study found a trend of the annual increase in corporate ESG performance of SMEs and disclosure. The detailed level of performance revealed governance performance was featured, followed by social and environmental performance. The regression analysis showed a significantly positive influence of corporate ESG on firm value. Following these positive influences, we suggest that SME managers amplify corporate ESG as a long-term business growth and value-creation strategy. In addition, investors are advised to consider SMEs with higher ESG performance as part of their investment portfolio. Keywords: corporate ESG, disclosure, firm value, SMEs, sustainability challenges

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Journal Info

Abbrev

ijbe

Publisher

Subject

Decision Sciences, Operations Research & Management Economics, Econometrics & Finance

Description

Indonesian Journal of Business and Entrepreneurship (IJBE) publishes information of empirical research and reviews in business and entrepreneurship. IJBE is published by School of Business, Bogor Agricultural University (SB-IPB) associated with Indonesian Alliance of Magister Management Program ...