THE MODERATING ROLE OF DIGITALIZATION IN THE RELATIONSHIP BETWEEN ACCOUNTING INFORMATION, ESG DISCLOSURE, AND MARKET VALUE: EVIDENCE FROM INDONESIA’S ENERGY SECTOR

Abstract

Inconsistent market responses to financial and non-financial information continue to pose challenges in emerging capital markets. This study examines the impact of accounting information and ESG disclosure on firm market value, while assessing the moderating role of digitalization. The analysis is based on panel data from 32 energy companies listed on the Indonesia Stock Exchange between 2021 and 2023. We apply a panel data regression using a Fixed Effect Model with robust standard errors. The results indicate that Earnings per Share (EPS) positively influences market value, whereas Book Value per Share (BVPS) shows a significant negative effect. This finding reflects a diminishing relevance of traditional balance sheet indicators in the current market environment. As with Book Value per Share, ESG disclosure—representing a non-financial signal of sustainability commitment—also fails to demonstrate a direct impact on market value. This limited effect may reflect challenges in how sustainability information is conveyed and perceived by investors. In this context, digitalization emerges as a critical factor that reshapes how these signals are transmitted and interpreted. Specifically, it weakens the association between EPS and market value, yet enhances the influence of both BVPS and ESG disclosure. These findings suggest that digital technologies can transform the communication of financial and sustainability-related information.