ESG Disclosure and Firm Value: The Moderating Roles of Institutional Quality and Economic Policy Uncertainty in a Global Context

As financial markets place greater emphasis on sustainability, the disclosure of environmental, social, and governance (ESG) information has become increasingly important for firm valuation. At the global level, ESG disclosures are positively associated with firm value, as they function as informative signals that reduce information asymmetry and convey long-term value creation to investors. This value relevance, however, is not uniform. It differs across regions, market types, and during periods of disruption such as the COVID-19 pandemic. The findings show that the quality of national institutions strengthens the valuation effects of ESG disclosures by enhancing their credibility. During periods of heightened economic policy uncertainty, these valuation effects improve as investors rely more heavily on ESG information to reduce information asymmetry.