Green Innovation Capability and Firm Value: The Moderating Role of ESG Rating and Energy Transition in ASEAN Countries

Abstract

Amidst burgeoning interest in sustainability and corporate value, this study addresses an empirical gap in the ASEAN-6 markets (Indonesia, Malaysia, Singapore, Philippines, Thailand, and Vietnam) by investigating the interplay between green innovation capability (GIC), environmental, social, and governance ratings (ESGR), energy transition (ETR), and firm value (FV). It further explores how ESGR and ETR moderate the GIC–FV relationship. Using Generalized Method of Moments (GMM) regression, we analyzed panel data from Refinitiv Eikon for 2806 companies across the region from 2020 to 2024 (14,030 firm-year observations). Findings reveal novel insights specific to ASEAN-6; GIC and ESGR significantly enhance FV, confirming their strategic importance. However, the pathway to increased FV through sustainability is neither straightforward nor uniform but a multidimensional phenomenon. The findings reveal that while GIC and ESGR significantly enhance FV, confirming their strategic importance, the pathway to value creation is neither straightforward nor uniform. Instead, the impact of these sustainability factors is profoundly shaped by country-specific characteristics and intricate interactions among variables. Practically, this study underscores the necessity for managers to formulate sustainability strategies that leverage GIC and ESGR. Furthermore, it offers guidance for policymakers to design tailored, context-specific frameworks within each ASEAN-6 nation. By illuminating the context-dependent nature of these relationships, this research fills a critical empirical void in understanding how sustainability dimensions influence FV in key emerging economies.