Voluntary Adoption of Integrated Reporting and Firm Valuation: The Moderating Effect of ESG Performance

This study addresses a research gap by examining the impact of the voluntary adoption
of integrated reporting on company value (TOBINSQ) for companies listed on the Indonesian
Stock Exchange. A purposive sampling method was used to select the sample, which included
companies with available ESG scores from 2018 to 2022 and accessible annual reports for the
same period. The final sample consists of 83 companies, totalling 299 observations. Multiple
regression analysis was employed to assess the direct effects of integrated reporting and the
moderating role of ESG performance (ESGSCORE) on company value. Our findings reveal
that integrated reporting positively influences company value and that ESG performance significantly moderates this relationship, enhancing the benefits of integrated reporting. The results underscore the importance for companies to adopt integrated reporting and enhance ESG
performance to improve market valuation. The study also suggests that promoting integrated
reporting and ESG disclosures can enhance market transparency and accountability. Future
research should focus on longitudinal studies, sector-specific analyses, geographical variations,
and the role of digital technologies in integrated reporting and ESG performance to provide
deeper insights and practical recommendations.