ESG Performance, Corporate Governance, and Firm Value: The Moderating Role of Artificial Intelligence in Emerging Markets

Abstract

This study examines the effects of Environmental, Social, and Governance (ESG) performance and corporate governance quality on firm value across nine emerging markets, and tests whether Artificial Intelligence (AI) adoption moderates these relationships. Using an unbalanced panel of 162 publicly listed firms observed from 2015 to 2025 (N = 1,782 firm-year observations) drawn from Indonesia, Malaysia, Thailand, the Philippines, Vietnam, India, China, Brazil, and South Africa, the study applies fixed-effects panel regression with firm-clustered standard errors, moderated regression analysis, and a dynamic robustness specification. Firm value is proxied by Tobin's Q; ESG performance, corporate governance, and AI adoption are measured through composite indices. Results indicate that both ESG performance (β = 0.013, p < 0.01) and corporate governance quality (β = 0.012, p < 0.01) significantly increase firm value, and that AI adoption significantly strengthens both relationships (ESG × AI: β = 0.0004, p < 0.01; CG × AI: β = 0.0003, p < 0.10). The interaction effects survive a dynamic, lagged-dependent-variable robustness check and hold across firm and year fixed effects. The findings extend Stakeholder Theory, Agency Theory, and the Resource-Based View by positioning AI as a dynamic capability that converts sustainability and governance practices into superior valuation outcomes, and they offer managerial, investment, and policy guidance for sequencing digital transformation alongside sustainability and governance reform in emerging economies