Sustainability Disclosure and Firm Market Valuation: Evidence from the Saudi Capital Market
DOI:
https://doi.org/10.29284/1zg38611Keywords:
Sustainability Disclosure, ESG Reporting, Firm Value, Saudi Capital Market, Tobin’s QAbstract
This study investigates the relationship between sustainability (ESG) disclosure and firm market value in the Saudi capital market from 2019 to 2024. With sustainability reporting gaining importance in emerging markets, the research examines whether ESG transparency influences investor valuation decisions. ESG disclosure is measured using a structured content analysis index based on Global Reporting Initiative (GRI) Standards, while firm value is assessed through market capitalization, with Tobin’s Q and the Price-to-Book ratio employed for robustness. Using panel regression analysis and controlling for firm size and profitability, the results reveal a positive and statistically significant association between ESG disclosure and firm market value. Firms with higher sustainability transparency demonstrate higher market valuation, highlighting the relevance of ESG information for investors and its role in market pricing. The study contributes empirical evidence from a rapidly evolving emerging market context, aligned with Saudi Arabia’s Vision 2030 reforms.
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