Analyzing Firm Performance: The Influence of Enterprise Risk Management, Investment Decisions, and ESG Aspects in ASEAN-5 Non Financial Firms

Analyzing Firm Performance: The Influence of Enterprise Risk Management, Investment Decisions, and ESG Aspects in ASEAN-5 Non Financial Firms

Enterprise Risk Management (ERM), Investment Decisions, Environmental, Social And Governance (ESG), Firm Performance, ASEAN-5

This study aims to examine theeffectof Enterprise Risk Management (Advanced level of ERM) and Investment Decisions on firm performance, with the moderating role of environmental, social and governance (ESG) factors in ASEAN-5 non-financial firms. Panel dataregressionanalysisemployed in this studywitha total of770observationsover a five-year period (2018to 2022).The study finds a positive relationship between ERM implementation and firm performance metrics (ROA, Tobin's Q, PBV). Investment decisions, proxied by Price Earnings Ratio (PER), also show a positive influence on firm performance. Furthermore, Environmental, Social, and Governance (ESG) moderate the relationship between ERMon firm’s financialperformance(ROA) and investment decisionson firm’s market performance (Tobin’s Q and PBV).The findings highlight the significance of integrating ESG factors on risk management practices and strategic investment decisions that improve firm’sfinancial and market-based performance

Muhammad Fikry Alfisyahrin1*, Dewi Hanggraeni2

https://dinastipub.org/DIJEFA/article/view/2744/1865

Universitas Indonesia

12July2024

muhammad.fikry21@office.ui.ac.id

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