THE VALUE RELEVANCE OF ESG DISCLOSURE PERFORMANCE IN INFLUENCING THE ROLE OF STRUCTURED WARRANTS IN FIRM VALUE CREATION

This research empirically explores the impact of ESG (Environmental, Social and Governance) disclosure on structured warrants and firm value based on Malaysia environment. The study applied the panel regression analysis and sampled 37 Malaysian firms and 795 structured warrants through years 2012 to 2017. The results uggested the ESG disclosure performance (proxied by ESG score) associated positively with the firm value. The moderation effect of ESG disclosure performance on the nexus between structured warrants and firm value is evident. This study concluded that ESG disclosure drives transparency, increases the information processing ability of superior investors who prefer to trade in structured warrants and eventually impounds the information into equity market. Listed firm which is close to its fundamental will be valued by the market due to lower investment risk. To-date, the impact of ESG disclosure on the nexus between structured warrants and firm value has never been explored. This study aims to provide direction to both stock exchange regulator and firms on the source of firm value enhancement and suggests new research avenue to future researchers.