Beyond Sustainability Signals: How Green Innovation Shapes Firm Value in Malaysia

Muliani UGB; Alfian Sayuti; Defel Septian; R. Ayu Ida Aryani

doi:10.32493/eaj.v9i2.y2026.p166-181

Authors

Muliani UGB Universitas Bumigora
Alfian Sayuti Universitas Bumigora
Defel Septian Universitas Bumigora
R. Ayu Ida Aryani Universitas Bumigora

DOI:

https://doi.org/10.32493/eaj.v9i2.y2026.p166-181

Keywords:

ESG, SRI, firm value, green innovation, Tobin’s Q

Abstract

This study examines the influence of Environmental, Social, and Governance (ESG) and Socially Responsible Investment (SRI) on firm value, proxied by Tobin's Q, with green innovation as a moderator variable. Rising global concerns about sustainability have prompted companies to integrate ESG practices and attract SRI-oriented investors. This study uses a quantitative approach with panel data from public companies. Data is collected from annual reports and sustainability reports. The analysis was carried out using regression analysis with moderation using panel data analysis, with the best models being FEM and GLS, which were more effective after model correction. The findings show that ESG and green innovation have a positive and significant impact on firm value, whereas SRI has no significant effect on firm value. In addition, green innovation strengthens the relationship between ESG and firm value, suggesting that companies engaged in green innovation get a higher market rating, but green innovation has no significant effect on the relationship between SRI and firm value. Control variables such as firm size also show a significant influence on the value of the company. The study contributes to the literature by highlighting the importance of sustainability practices and innovation in increasing company value.

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Beyond Sustainability Signals: How Green Innovation Shapes Firm Value in Malaysia

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