Reassessing The Role of Political Embeddedness: ESG and Corporate Market Outcomes in Indonesia

Sonya Meylina Prastiwi; Armadani Armadani; Zahroh Naimah

doi:10.33395/owner.v10i4.3706

Authors

Sonya Meylina Prastiwi Universitas Airlangga
Armadani
✉ Corresponding author: armadani1701@gmail.com STAI Al-Kifayah Riau
Zahroh Naimah Universitas Airlangga

DOI:

https://doi.org/10.33395/owner.v10i4.3706

Keywords:

ESG, Corporate Market Outcome, Indonesia

Abstract

This study aims to test and analyze the role of political embeddedness on the relationship between ESG and corporate market performance in Indonesia. This study used data from companies listed on the Indonesia Stock Exchange (IDX), excluding financial sector companies. The final sample size was 1,281 firm-years. Panel data regression analysis techniques were used to test the research hypotheses. Furthermore, several tests, including robustness tests and further testing, were conducted to deepen the research. Regression results reveal that ESG plays a role in building market confidence in a company, thus increasing its value. Furthermore, political embeddedness plays a significant role in strengthening ESG's influence on corporate market outcomes. The integration of political embeddedness, ESG, and corporate market outcomes into a research model, along with its comprehensive analysis, makes this study valuable for advancing the literature. This study addresses a research gap and provides a broad perspective on the model analyzed.

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