The Influence of Corporate Governance and Corporate Social Responsibility on Financial Performance in ASEAN-5

Autor/innen

  • Eduard Ary Binsar Naibaho Universitas Pelita Harapan
  • Pande Saputra Nadeak Universitas Pelita Harapan

Schlagworte:

Tobin’s Q, Return on Asset (ROA), Debt Financing, Product Market Competition, ESG, dESG

Abstract

This study aims to analyze the influence of Corporate Governance and Corporate Social Responsibility on corporate financial performance in ASEAN-5, focusing on two performance indicators, namely Tobin's Q and Return on Assets (ROA). The method used was a regression analysis of panel data with secondary data from 144 companies listed on S&P Capital IQ during the period 2019 to 2023. This study employs the Fixed Effects research model for Model 1, while Model 2 utilizes the Random Effects model. The results of the study show that external corporate governance has no significant effect on financial performance, as measured by Tobin's Q. In contrast, debt financing has a negative impact on ROA's financial performance. In addition, market competition, as measured by the Herfindahl-Hirschman Index (HHI), did not affect Tobin's Q or ROA, while the ESG score showed no significant impact on either Tobin's Q or ROA. These findings offer valuable insights for companies to manage debt and develop sustainable strategies that enhance financial performance in a competitive market.

Literaturhinweise

Abbas Ibrahim, P. U., & AbdulQudus, I. (2020). Effect of Financial Leverage on Firm Value: Evidence From Selected Firms Quoted on the Nigerian Stock Exchange. European Journal of Business and Management. https://doi.org/10.7176/ejbm/12-3-16

Adam Hayes. (2024, July 6). Q Ratio or Tobin’s Q: Definition, Formula, Uses, and Examples. Investopedia. https://www.investopedia.com/terms/q/qratio.asp

Ali, S., Murtaza, G., Hedvicakova, M., Jiang, J., & Naeem, M. (2022). Intellectual capital and financial performance: A comparative study. Frontiers in Psychology, 13. https://doi.org/10.3389/fpsyg.2022.967820

Amini, S., Kumar, R., & Shome, D. (2024). Product Market Competition and Corporate Investment: An Empirical Analysis ⋆. https://www.chicagobooth.edu/research/stigler/events/march-27-2017-is-there-a-concentration-

Babar, M., & Habib, A. (2020). Product market competition in accounting, finance, and corporate governance: A review of the literature. https://abdc.edu.au/research/abdc-journal-list/2019-review/.

Bartlett, R., & Partnoy, F. (2020). The Misuse of Tobin’s q. https://scholarship.law.vanderbilt.edu/vlr/vol73/iss2/1

Berman, S. L., Wicks, A. C., Kotha, S., & Jones, T. M. (1999). DOES STAKEHOLDER ORIENTATION MATTER? THE RELATIONSHIP BETWEEN STAKEHOLDER MANAGEMENT MODELS AND FIRM FINANCIAL PERFORMANCE. In Management Toutnal (Vol. 42, Issue 5).

Bhagat, S., & Bolton, B. (2008). Corporate governance and firm performance. Journal of Corporate Finance, 14(3), 257–273. https://doi.org/10.1016/j.jcorpfin.2008.03.006

Butt, M. N., Baig, A. S., & Seyyed, F. J. (2023). Tobin’s Q approximation as a metric of firm performance: an empirical evaluation. Journal of Strategic Marketing, 31(3), 532–548. https://doi.org/10.1080/0965254X.2021.1947875

Caroline Banton. (2025, January 28). Real Economic Growth Rate: Definition, Calculation, and Uses. Investopedia. https://www.investopedia.com/terms/r/realeconomicrate.asp

Carroll, A. B. (2015). Corporate social responsibility: The centerpiece of competing and complementary frameworks. Organizational Dynamics, 44(2), 87–96. https://doi.org/10.1016/j.orgdyn.2015.02.002

Danevska, A. B., Stanoevska, E. P., & Dimitrieska, S. (2023). The Impact of Debt Financing on the Value of a Company: the Case of North Macedonian Companies. Naše Gospodarstvo/Our Economy, 69(3), 24–34. https://doi.org/10.2478/ngoe-2023-0015

Desai, R. (2021). Nexus Between Debt Financing and Market Value Moderated by Firm Size: Panel Data Evidence from India. Vision. https://doi.org/10.1177/09722629211052641

Farichatul Chusna. (2024, July 10). Debt to Assets Ratio (DAR): Pengertian, Rumus, Cara Menghitung. Investbro.Id. https://investbro.id/debt-to-assets-ratio-dar/

Freeman, R. Edward. (1984). Strategic management : a stakeholder approach. Pitman.

Guluma, T. F. (2021). The impact of corporate governance measures on firm performance: the influences of managerial overconfidence. Future Business Journal, 7(1). https://doi.org/10.1186/s43093-021-00093-6

Hill, C. W. L., & Jonfs, T. M. (1992). STAKEHOLDER-AGENCY THEORY. In Journal of Management Studies (Vol. 29, Issue 2).

Ishaq, M., Islam, Y., & Ghouse, G. (2021). Tobin’s Q as an Indicator of Firm Performance: Empirical Evidence from Manufacturing Sector Firms of Pakistan. International Journal of Economics and Business Administration, IX(Issue 1), 425–441. https://doi.org/10.35808/ijeba/683

Januszewski, S. I., Köke, J., & Winter, J. K. (2002). Product market competition, corporate governance and firm performance: An empirical analysis for Germany. Research in Economics, 56(3), 299–332. https://doi.org/10.1006/reec.2001.0278

Jensen, M. C., & Meckling, W. H. (1976). THEORY OF THE FIRM: MANAGERIAL BEHAVIOR, AGENCY COSTS AND OWNERSHIP STRUCTURE. In Journal of Financial Economics (Vol. 3). Q North-Holland Publishing Company.

Jones, A. S., & Onatuyeh Aruobogha, E. (2020). Effect of Debt Financing on the Corporate Performance: A Study of Listed Consumer Goods firms in Nigeria. In International Journal of Academic Accounting. www.ijeais.org/ijaafmr

Kuzey, C., Uyar, A., Nizaeva, M., & Karaman, A. S. (2021). CSR performance and firm performance in the tourism, healthcare, and financial sectors: Do metrics and CSR committees matter? Journal of Cleaner Production, 319. https://doi.org/10.1016/j.jclepro.2021.128802

Li, T. T., Wang, K., Sueyoshi, T., & Wang, D. D. (2021). Esg: Research progress and future prospects. In Sustainability (Switzerland) (Vol. 13, Issue 21). MDPI. https://doi.org/10.3390/su132111663

Lu, J., Javeed, S. A., Latief, R., Jiang, T., & Ong, T. S. (2021). The moderating role of corporate social responsibility in the association of internal corporate governance and profitability; evidence from pakistan. International Journal of Environmental Research and Public Health, 18(11). https://doi.org/10.3390/ijerph18115830

Makhdalena, M., Zulvina, D., Zulvina, Y., Amelia, R. W., & Wicaksono, A. P. (2023). ESG and Firm Performance in Developing Countries: Evidence From ASEAN. ETIKONOMI, 22(1), 65–78. https://doi.org/10.15408/etk.v22i1.25271

Michael Bromberg. (2024, June 12). Herfindahl-Hirschman Index (HHI): Definition, Formula, and Example. Investopedia. https://www.investopedia.com/terms/h/hhi.asp

Naomi, I. W. (2023). Debt Financing and Financial Performance of Manufacturing Firms in Kenya. African Journal of Commercial Studies. African Journal of Commercial Studies, 3(2), 86–95. https://doi.org/10.59413/ajocs/v3.i2.1

Nazir, A., Azam, M., & Khalid, M. U. (2021). Debt financing and firm performance: empirical evidence from the Pakistan Stock Exchange. Asian Journal of Accounting Research, 6(3), 324–334. https://doi.org/10.1108/AJAR-03-2019-0019

Okanda, T. L., Zhang, J., Sarfo, P. A., & Amankwah, O. (2025). Exploring the Nexus between Debt Financing and Firm Performance: A Robustness Analysis Using Instrumental Variables. International Journal of Advanced Engineering Research and Science, 12(2), 08–22. https://doi.org/10.22161/ijaers.122.2

Panigrahi, A. K., & Vachhani, K. (2021). Financial analysis by return on equity (ROE) and return on asset (ROA)-A comparative study of HUL and ITC. Journal of Management Research and Analysis, 8(3), 131–138. https://doi.org/10.18231/j.jmra.2021.027

Prasad, R., & Mondal, A. (2025). Nexus between ESG scores and financial performance: evidence from the Indian banking sector. Asian Journal of Accounting Research. https://doi.org/10.1108/AJAR-06-2024-0244

Puni, A., & Anlesinya, A. (2020). Corporate governance mechanisms and firm performance in a developing country. International Journal of Law and Management, 62(2), 147–169. https://doi.org/10.1108/IJLMA-03-2019-0076

Qu, W., & Zhang, J. (2023). Environmental, Social, and Corporate Governance (ESG), Life Cycle, and Firm Performance: Evidence from China. Sustainability (Switzerland), 15(18). https://doi.org/10.3390/su151814011

Raghavendra Rau, P., & Ting Yu. (2024). Rau_a survey on ESG. China Finance Review International, 14, 3–3. https://doi.org/10.1108/CFRI-12-2022-0260

Rocha, R., Bandeira, A., & Ramos, P. (2024). The Impact of Social Responsibility on the Performance of European Listed Companies. Sustainability, 16(17), 7658. https://doi.org/10.3390/su16177658

Sabuj Hossain, Md., Nazmul Huda, Md., Noman Siddik, Md., Khaled, Md., Jamsedul Islam, Md., & Majnur Rahman, Md. (2022). Product Market Competition and Debt Choice: A Study on Cement Companies Enlisted in Capital Market in Bangladesh. Journal of Business and Economic Development, 7(1), 31. https://doi.org/10.11648/j.jbed.20220701.15

Sachin, N., & Rajesh, R. (2022). An empirical study of supply chain sustainability with financial performances of Indian firms. Environment, Development and Sustainability, 24(5), 6577–6601. https://doi.org/10.1007/s10668-021-01717-1

Shaikh, I. (2021). ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) PRACTICE AND FIRM PERFORMANCE: AN INTERNATIONAL EVIDENCE. Journal of Business Economics and Management, 23(1), 218–237. https://doi.org/10.3846/jbem.2022.16202

Shobhwani, K., & Lodha, S. (2024). Impact of ESG Disclosure Scores on Financial, Operating and Market-Based Performance: Evidence from NSE-100 Companies. NMIMS Management Review, 32(3), 211–223. https://doi.org/10.1177/09711023241306219

Singh, R., Chaudhary, P., & Gupta, C. P. (2024). Defining Return on Assets (ROA) in empirical corporate finance research: a critical review. Research Gate. https://doi.org/10.5281/zenodo.10901886

Singh, S., Tabassum, N., Darwish, T. K., & Batsakis, G. (2018). Corporate Governance and Tobin’s Q as a Measure of Organizational Performance. British Journal of Management, 29(1), 171–190. https://doi.org/10.1111/1467-8551.12237

Tim Content KlikDokter. (2020). Covid-19. Kemenkes. https://ayosehat.kemkes.go.id/topik/covid-19

Tsendsuren, C., Yadav, P. L., Han, S. H., & Kim, H. (2021). Influence of product market competition and managerial competency on corporate environmental responsibility: Evidence from the US. Journal of Cleaner Production, 304. https://doi.org/10.1016/j.jclepro.2021.127065

Xuan Ha, T., & Thi Tran, T. (2022). The impact of product market competition on firm performance through the mediating of corporate governance index: empirical of listed companies in Vietnam. Cogent Business and Management, 9(1). https://doi.org/10.1080/23311975.2022.2129356

Xuan, T. H., & Thi TRAN, T. (2021). The Effect of Foreign Ownership and Product Market Competition on Firm Performance: Empirical Evidence from Vietnam*. Journal of Asian Finance, 8(11), 79–0086. https://doi.org/10.13106/jafeb.2021.vol8.no11.0079

Yu, X., & Xiao, K. (2022). Does ESG Performance Affect Firm Value? Evidence from a New ESG-Scoring Approach for Chinese Enterprises. Sustainability (Switzerland), 14(24). https://doi.org/10.3390/su142416940

Downloads

Veröffentlicht

2025-12-10

Ausgabe

Bd. 5 (2025): Proceedings of the 5th International Conference on Entrepreneurship (IConEnt)

Rubrik

Articles

Lizenz

Creative-Commons-Lizenz
Dieses Werk steht unter der Lizenz Creative Commons Namensnennung - Nicht-kommerziell - Weitergabe unter gleichen Bedingungen 4.0 International.