Enny Prayogo, Made Sudarma, Lilik Purwanti, Noval Adib
This study examines the correlation between environmental, social, and governance (ESG) disclosure and firm value in Indonesian companies, utilizing Stakeholder Theory and Signaling Theory as its theoretical framework. Employing a PRISMA-guided meta-analysis, this study integrates findings from 52 empirical studies published from 2019 to 2024, utilizing a random-effects model. The aggregated results demonstrate that ESG disclosure does not significantly impact firm value in Indonesia (effect size r = 0.036; 95% CI =-0.039 to 0.11; p-value = 0.346), notwithstanding the considerable heterogeneity (I2 = 92.2%). This finding suggests that while ESG practices are being adopted more and more, they don't always have the same effect on how investors see a company and its value. The findings indicate that ESG disclosure does not directly enhance firm value in developing countries, underscoring the contextual limitations of Stakeholder Theory and Signaling Theory in emerging markets. In practice, the study emphasizes the necessity to improve the quality and consistency of ESG disclosure to more effectively promote sustainable firm value. This study serves as a secondary synthesis, utilizing existing firm-level data and integrating previous Indonesian studies to enhance the comprehension of the relationship between ESG disclosure and firm value. © 2026, Universiti Malaysia Sarawak. All rights reserved.
Faculty of Economics and Business, Universitas Brawijaya, Indonesia; Faculty of Digital Business and Law, Maranatha Christian University, Indonesia
