Green Intellectual Disclosure, Cash Holding, and Foreign Ownership on Financial Performance: The Moderating Role of Good Corporate Governance in Indonesia

Abstract

Purpose – This study investigates the impact of Green Intellectual Disclosure, Cash Holding, and Foreign Ownership on Financial Performance, with Good Corporate Governance (GCG) as a moderating variable in Indonesia’s post-pandemic financial sector. The study responds to the limited empirical evidence on whether sustainability disclosure and governance mechanisms have translated into financial value creation following the implementation of Sustainable Finance regulations.

Design/methodology/approach – A quantitative research design was employed using secondary data from financial sector companies listed on the Indonesia Stock Exchange during 2022–2024. Through purposive sampling, 70 firms were selected. Panel data regression analysis with a Fixed Effect Model (FEM) was applied to capture firm-specific heterogeneity. The estimation was conducted using EViews9 software, which remains fully compatible with panel datasets and does not affect estimation accuracy.

Findings – The results reveal that Green Intellectual Disclosure and Cash Holding have negative but insignificant effects on Financial Performance. Conversely, Foreign Ownership demonstrates a positive and statistically significant influence. Moderation testing shows that GCG strengthens the relationship between Foreign Ownership and Financial Performance but fails to moderate the effects of Green Intellectual Disclosure and Cash Holding.

Research limitations/implications – The findings indicate that sustainability disclosure practices within Indonesia’s financial sector remain largely compliance-oriented and have not yet generated measurable financial benefits. This suggests that ESG transparency may still function symbolically rather than strategically in enhancing firm value. The study provides policy insights for regulators, particularly the Financial Services Authority (OJK), to strengthen the quality, assurance, and audit standards of sustainability reporting under POJK No. 51/2017 to ensure that green disclosure delivers market relevance rather than administrative burden.

JEL: M41, G21, G32