ESG Disclosure, Agency Costs, and Firm Value: Evidence from Digital Transformation in Emerging Markets

Abstract

This study explores the relationship between ESG disclosure, agency costs, and firm value, with a focus on the moderating role of digital transformation in emerging markets. Using a qualitative approach and employing literature review and library research methods, the study synthesizes findings from a range of scholarly articles to provide insights into how ESG disclosures impact agency costs and firm performance. The findings suggest that transparent ESG disclosures help reduce information asymmetry between shareholders and managers, thereby lowering agency costs and enhancing firm value. Moreover, the integration of digital transformation is found to further improve the effectiveness of ESG disclosures by increasing transparency, data accuracy, and governance standards. However, the study also highlights that the effectiveness of ESG reporting varies across markets, with emerging markets facing challenges due to weaker regulatory enforcement and digital infrastructure. The study emphasizes the importance of high-quality ESG disclosure and the role of technology in enhancing corporate governance. Finally, the research calls for further investigation into the role of digital transformation in shaping ESG practices across different market contexts, particularly in emerging economies.