The Mediating Role Of Financial Performance On Sustainability Reporting And Firm Value: A Literature Review
Keywords:
Sustainability Reporting, Firm Value, Financial Performance, Industrial SectorAbstract
This study examines the impact of Sustainability Reporting on firm value in the industrial sector companies listed on the Indonesia Stock Exchange for the 2022-2024 period, using financial performance as a mediating variable. This article employs a literature review approach to synthesize various empirical findings and theoretical frameworks, specifically Signaling Theory and Stakeholder Theory. The findings indicate that sustainability reporting serves as a quality signal to reduce information asymmetry for investors. Furthermore, these practices contribute to operational efficiency, which enhances the company's financial performance. Financial performance acts as a significant mediator in transmitting the impact of sustainability reporting on the increase in firm value. Company management should optimize sustainability reporting strategies as a strategic instrument to enhance firm valuation in the capital market (Ghozali, 2021).
References
Asni, N., & Agustina, D. (2022). The impact of green innovation on firm value: The mediating role of financial performance. Journal of Accounting and Sustainability, 2(1), 45-58.
Atan, R., Razali, F. A., Said, J., & Zainuddin, S. (2018). Sustainability reporting and firm performance: Evidence from Malaysia. International Journal of Economics and Management, 12(1), 1-15.
Aydoğmuş, M., Günes, K., & Yeşil, K. (2022). ESG performance and firm value: The moderating role of financial performance. Sustainability, 14(16), 101-118.
Brigham, E. F., & Houston, J. F. (2021). Fundamentals of financial management (16th ed.). Cengage Learning.
Deegan, C. (2014). Financial accounting theory (4th ed.). McGraw-Hill Education.
Ghozali, I., & Chariri, A. (2023). Teori akuntansi: International financial reporting system (IFRS) (5th ed.). Badan Penerbit Universitas Diponegoro.
Hanifah, H., & Tahir, M. (2022). Signaling theory in sustainability reporting: A review of literature. Journal of Business Studies, 10(2), 210-225.
Linh, N. T. T., Nguyen, N. T., & Huong, L. T. T. (2022). Sustainability reporting and firm value: A study on listed companies in Vietnam. Journal of Asian Finance, Economics and Business, 9(3), 251-260.
Creswell, J. W., & Creswell, J. D. (2018). Research design: Qualitative, quantitative, and mixed methods approaches (5th ed.). SAGE Publications.
Creswell, J. W., & Poth, C. N. (2018). Qualitative inquiry and research design: Choosing among five approaches (4th ed.). SAGE Publications.
Mishra, S., & Modi, S. B. (2016). Corporate environmental stewardship and firm value. Journal of Business Ethics, 136(3), 617-636.
Nguyen, A. H., & Nguyen, H. T. (2023). Corporate social responsibility and financial performance: The mediating role of operational efficiency. Journal of Corporate Finance Research, 7(1), 12-28.
Porter, M. E., & Kramer, M. R. (2011). Creating shared value. Harvard Business Review, 89(1/2), 62-77.
Sari, D. K., & Andreas, A. (2019). The effect of sustainability reporting on financial performance: Evidence from Indonesian listed companies. Indonesian Journal of Accounting Research, 22(2), 185-202.
Spence, M. (1973). Job market signaling. The Quarterly Journal of Economics, 87(3), 355-374.
Suhartini, D., Putri, A. N., & Fardani, S. A. (2024). Sustainability reporting, governance, and firm value: The mediating role of financial performance. Journal of Governance and Corporate Sustainability, 5(2), 112-129.
Ting, I. W. K., Lu, W. M., Kweh, Q. L., & Hassan, H. B. (2020). Corporate social responsibility and firm performance: A study of the Malaysian manufacturing sector. Journal of Cleaner Production, 251, 119630.
Waddock, S. A., & Graves, S. B. (1997). The corporate social performance–financial performance link. Strategic Management Journal, 18(4), 303-319.
Yuliyanti, F., Handayani, D., & Pratiwi, A. (2022). Financial performance as a signal for firm value: An empirical study on Indonesian manufacturing companies. International Journal of Financial Research, 13(4), 89-102.
Zahra, S. A., & Pearce, J. A. (1989). Boards of directors and corporate financial performance: A review and integrative model. Journal of Management, 15(2), 291-334.
Zhou, Y., Chen, Y., & Wang, L. (2022). ESG disclosure, financial performance, and market value: Evidence from Chinese listed companies. Journal of Business Ethics and Sustainability, 18(3), 334-352.
Zubeltzu-Jaka, E., Alvarez-Echabe, I., & Orbea-Aizpurua, I. (2020). Sustainability reporting and firm value: Does the mediation of financial performance matter? Journal of Cleaner Production, 260, 121015.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Anggy Zefania Sabatini
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
