The value of ESG in emerging markets: Evidence from Indonesia, Malaysia, and Singapore

2026-01-18T00:11:58-06:00

This study addresses a critical gap in the corporate finance literature by empirically investigating the causal link between Environmental, Social, and Governance (ESG) performance and firm profitability, as measured by Return on Equity (ROE), within the heterogeneous economies of Indonesia, Malaysia, and Singapore. Going beyond simple correlation, we advance the discourse by examining a theoretically salient moderating variable: firm size, a relationship that has received limited attention, particularly in the under-researched Southeast Asian context. Utilizing a comprehensive panel dataset of 1,420 publicly listed companies from 2012 to 2023, we employ sophisticated econometric methodologies, including First-Difference GMM (FD-GMM) and System GMM (SYS-GMM), to mitigate endogeneity and dynamic panel bias. Our main findings, derived from the robust SYS-GMM model, reveal a positive and statistically significant effect of ESG scores on ROE across all three countries, providing strong empirical support for the "doing well by doing good" hypothesis. Crucially, our analysis yields a novel and counterintuitive finding: the moderating effect of firm size on the ESG-ROE relationship is statistically insignificant. This result challenges the prevailing notion that only larger, resource-rich firms can effectively translate ESG investments into financial gains. It suggests that the positive financial spillovers of ESG practices are universal and not contingent on a firm's scale. The consistency of these findings was validated through a series of robustness checks. This research makes three key contributions: (1) it provides rigorous, methodologically advanced evidence from a globally underrepresented region; (2) it introduces new empirical insights on the non-conditional nature of the ESG-profitability nexus; and (3) it offers valuable implications for investors and policymakers, demonstrating that ESG can be a universal value driver, thereby strengthening the case for integrated sustainability strategies across diverse corporate landscapes.

The impact of strategic alliances on recovery from environmental and climate change: An approach to achieving sustainability

2026-01-21T17:32:17-06:00

Climate volatility and environmental degradation have increased the pressure for organizational adjustment, especially in resource-based economies like Iraq. Conventional market-based solutions are insufficient for addressing complex ecological issues, necessitating the development of collaborative governance systems that incorporate multi-level stakeholder participation and technological integration. This paper discusses the impact of strategic alliances on environmental recovery outcomes in the Iraqi beverage production industry, examining how different types of alliances can be more effective in ecological adaptation. A quantitative study involving 68 respondents from two Iraqi beverage companies, Al-Waha and Al-Diyar, was conducted. The sampling approach was convenience sampling, targeting organizational members with strategic decision-making authority, including board members and department heads with at least five years of experience in alliance formation, environmental compliance, and operational risk management. The study evaluated four types of alliances, investment, project, marketing, and technical, and five environmental factors: cultural, technological, social, economic, and behavioral, using structured questionnaires organized into dimensions of strategic alliance and environmental adaptation. Structural Equation Modeling was employed to analyze correlations between alliance dimensions and adaptation results. The findings indicated high effectiveness scores across all alliance types, with technical alliances receiving the highest recognition. Similar ratings were observed for environmental adaptation factors. Correlation analysis revealed significant positive relationships between strategic alliances and environmental recovery, with marketing alliances demonstrating the strongest correlation. The study concludes that strategic alliances play a vital role in environmental recovery within the Iraqi manufacturing sector by facilitating access to specialized environmental knowledge, technologies, and stakeholder networks that are often not internalized within individual organizations.

International Journal of Management and Sustainability

The value of ESG in emerging markets: Evidence from Indonesia, Malaysia, and Singapore

The impact of strategic alliances on recovery from environmental and climate change: An approach to achieving sustainability