The Effect of Sustainability Report Disclosure, Firm Size, and Liquidity on Firm Value: Evidence from Indonesian Mining Companies
Article Sidebar
Main Article Content
Abstract
This study examines whether sustainability report disclosure, firm size, and liquidity affect firm value in Indonesian mining companies. Mining firms operate in a capital-intensive and environmentally sensitive sector; therefore, investor valuation may be shaped not only by financial indicators but also by sustainability transparency. The study applies a quantitative explanatory design using secondary data from mining-sector companies listed on the Indonesia Stock Exchange during 2020–2024. From a population of 39 firms, 14 companies were selected through purposive sampling, generating 70 firm-year observations. Firm value was measured using Price to Book Value, sustainability report disclosure was measured through a disclosure index, firm size used the natural logarithm of total assets, and liquidity used the current ratio. Multiple linear regression with SPSS 22 was employed after classical assumption testing. The results show that sustainability report disclosure has a negative and significant effect on firm value, with a coefficient of −73.065 and significance of 0.000. Firm size has a positive and significant effect, with a coefficient of 3.000 and significance of 0.000. Liquidity has a positive but insignificant coefficient of 0.874 and significance of 0.344. The model explains 42.5% of firm-value variation. These findings imply that sustainability disclosure in mining firms may be interpreted as a costly or risk-revealing signal unless supported by credible sustainability performance, while company scale remains a strong valuation signal.
Article Details
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
References
[1] Otoritas Jasa Keuangan, Peraturan Otoritas Jasa Keuangan Nomor 51/POJK.03/2017 tentang Penerapan Keuangan Berkelanjutan bagi Lembaga Jasa Keuangan, Emiten, dan Perusahaan Publik. Jakarta: Otoritas Jasa Keuangan, 2017. [Online]. Available: https://keuanganberkelanjutan.ojk.go.id/keuanganberkelanjutan/id/regulation/detailregulation/3781/penerapan-keuangan-berkelanjutan-bagi-lembaga-jasa-keuangan-emiten-dan-perusahaan-publik
[2] S. Syakur and Khomsiyah, “The effect of disclosing sustainability reports with the Global Reporting Initiative (GRI) G4 and green accounting on the value of mining companies on the IDX in 2020–2023,” Indones. Interdiscip. J. Sharia Econ., vol. 8, no. 1, pp. 1193–1211, 2025, doi: 10.31538/iijse.v8i1.5651.
[3] R. E. Freeman, Strategic Management: A Stakeholder Approach. Cambridge: Cambridge University Press, 2010. doi: 10.1017/CBO9781139192675.
[4] M. Spence, “Job market signaling,” Q. J. Econ., vol. 87, no. 3, pp. 355–374, 1973, doi: 10.2307/1882010.
[5] S. Bani-Khaled, G. Azevedo, and J. Oliveira, “Environmental, social, and governance (ESG) factors and firm value: A systematic literature review of theories and empirical evidence,” AMS Rev., vol. 15, no. 1–2, pp. 228–260, 2025, doi: 10.1007/s13162-025-00303-2.
[6] W. Friske, S. A. Hoelscher, and A. N. Nikolov, “The impact of voluntary sustainability reporting on firm value: Insights from signaling theory,” J. Acad. Mark. Sci., vol. 51, no. 2, pp. 372–392, 2023, doi: 10.1007/s11747-022-00879-2.
[7] P. Angir and Weli, “The influence of environmental, social, and governance (ESG) disclosure on firm value: An asymmetric information perspective in Indonesian listed companies,” Binus Bus. Rev., vol. 15, no. 1, pp. 29–40, 2024, doi: 10.21512/bbr.v15i1.10460.
[8] Y. Abdi, X. Li, and X. Càmara-Turull, “Exploring the impact of sustainability (ESG) disclosure on firm value and financial performance (FP) in airline industry: The moderating role of size and age,” Environ. Dev. Sustain., vol. 24, no. 4, pp. 5052–5079, 2022, doi: 10.1007/s10668-021-01649-w.
[9] S. H. Penman, Financial Statement Analysis and Security Valuation, 6th ed. McGraw-Hill, 2020.
[10] J. M. Wahlen, S. P. Baginski, and M. T. Bradshaw, Financial Reporting, Financial Statement Analysis, and Valuation, 9th ed. Cengage, 2020. [Online]. Available: https://www.cengage.com/c/etextbook-financial-reporting-financial-statement-analysis-and-valuation-9e-wahlen-baginski-bradshaw/9780357691007/
[11] J. Hanaffy, “Liquidity and firm size as determinants of firm value: An empirical study on textile and garment companies in the Indonesia Stock Exchange (IDX),” Int. J. Res. Innov. Soc. Sci., vol. 9, no. 9, pp. 6448–6456, 2025, doi: 10.47772/IJRISS.2025.909000528.
[12] A. Widyakto, E. T. Widyarti, Y. Suhardjo, O. Fresiliasari, and A. Karim, “Effect of capital structure, company size, profitability and liquidity on company value: Evidence from Indonesia manufacturing companies,” Diponegoro Int. J. Bus., vol. 7, no. 1, pp. 70–81, 2024, doi: 10.14710/dijb.7.1.2024.70-81.
[13] A. H. Mutiha, “The quality of sustainability report disclosure and firm value: Further evidence from Indonesia,” Proceedings, vol. 83, no. 1, p. 26, 2022, doi: 10.3390/proceedings2022083026.
[14] D. F. Latipatul Hamdah, A. Setiawan, E. Kartiko, N. B. Zakaria, and T. H. Fauzi, “The effect of sustainability report disclosure on firm value with growth and leverage as control variables,” Int. J. Res. Innov. Soc. Sci., vol. 9, no. 8, pp. 5588–5599, 2025, doi: 10.47772/IJRISS.2025.908000452.
[15] K. V Lins, H. Servaes, and A. Tamayo, “Social capital, trust, and firm performance: The value of corporate social responsibility during the financial crisis,” J. Finance, vol. 72, no. 4, pp. 1785–1824, 2017, doi: 10.1111/jofi.12505.
[16] R. G. Eccles, I. Ioannou, and G. Serafeim, “The impact of corporate sustainability on organizational processes and performance,” Manage. Sci., vol. 60, no. 11, pp. 2835–2857, 2014, doi: 10.1287/mnsc.2014.1984.
[17] M. López-Santamaría, N. Amaya, M. P. Grueso Hinestroza, and Y. A. Cuero, “Sustainability disclosure practices as seen through the lens of the signaling theory: A study of companies listed on the Colombian Stock Exchange,” J. Clean. Prod., vol. 317, pp. 1–9, 2021, doi: 10.1016/j.jclepro.2021.128416.
[18] O. Hawn and I. Ioannou, “Mind the gap: The interplay between external and internal actions in the case of corporate social responsibility,” Strateg. Manag. J., vol. 37, no. 13, pp. 2569–2588, 2016, doi: 10.1002/smj.2464.
[19] U. Sekaran and R. Bougie, Research Methods for Business: A Skill-Building Approach, 7th ed. Wiley, 2016.
[20] J. M. Wooldridge, Introductory Econometrics: A Modern Approach, 7th ed. Cengage, 2020.
[21] Global Reporting Initiative, “GRI 1: Foundation 2021,” Global Reporting Initiative, Amsterdam, Jul. 2021. [Online]. Available: https://www.globalreporting.org/publications/documents/english/gri-1-foundation-2021/
[22] D. N. Gujarati and D. C. Porter, Basic Econometrics, 5th ed. McGraw-Hill, 2009.
[23] I. Ghozali, Aplikasi Analisis Multivariate dengan Program IBM SPSS 26, 10th ed. Semarang: Badan Penerbit Universitas Diponegoro, 2021.