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Intellectual capital (IC) has been considered as a valuable asset in the wealth creation and sustainability of the company; however, limited and mixed results are found on its impact on firm financial performance and market value (MV). This paper aims to investigate the influence of IC toward MV and financial performance of publicly listed firms in Indonesia. In addition, this research also presents the comparison of the high and low level of knowledge industries regarding IC performance.

A balanced panel data of 127 firms from 12 industries in Indonesia during 2010 until 2017 was evaluated using dynamic panel regression and administering a well-developed Blundell–Bond instrument (dynamic panel data estimator) to account for endogeneity problem.

The results of this study showed that IC had a significant and positive impact on firm performance. Specifically, structural capital efficiency and capital employed (CE) efficiency have been contributed to the value creation of the company, after controlling for firm size and type of industry. Different to the theoretical expectation, this research found no significant relationship between IC and MV of the firm. However, when the sample was clustered into high-level and low-level knowledge industry, CE displayed positive and significant relationship in high-level industry.

This research contributes to IC research by having a larger sample of Indonesian firms from all industries except banks and financial institutions and using Modified Value Added Intellectual Capital measurement model. To address the endogeneity problem, dynamic panel regression using system generalized method of moment was applied.

The paper examines the impact of financial statement comparability on cash holding moderated by Environmental Social Governance (ESG) performance.

A panel dataset of all publicly listed Indonesian firms from 2009 to 2022, evaluated with panel data regressions controlled by year and clustered by firms was the method of study. Then, a robustness test using alternative measurements, lagged variables and additional analyses are performed.

The result shows that there is no moderating role of ESG performance on financial statement comparability toward cash holding among Indonesian firms; nonetheless, ESG performance strengthened the capacity of financial statement comparability to lower cash holding significantly for firms with high ESG performance scores and not significant otherwise. This interplay of variables is developed following the Financial Services Authority imposed ESG regulation for publicly listed firms in Indonesia. Further, the analyses reveal that higher ESG performance can help firms achieve high market-based performance and make it easier to obtain external financing, thus lowering the need to hold more cash.

The study highlights the effect of financial statement comparability on cash holding, particularly moderated by ESG performance in a developing country where the agency cost is high and still very rare to be scrutinized. Additionally, the study helps to know the impacts prior and post-ESG regulation imposed in Indonesia.