ESG INVESTMENT AND FIRM VALUE: THE MODERATING ROLE OF CORPORATE REPUTATION IN ADVANCING CORPORATE SUSTAINABILITY AND SUSTAINABLE GROWTH IN BANGLADESH

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Published: 2026-09-20
DOI: https://doi.org/10.46281/bjmsr.v11i4.2951
Keywords:
ESG Investment, Firm Value, Corporate Reputation, Corporate Sustainability, Corporate Social Responsibility, Sustainable Growth, Inclusive Economic Growth, Climate Finance, Panel ARDL, Bangladesh

Main Article Content

K. M. Anwarul Islam
Research Professor, Department of Business Administration, University of Asia Pacific, Bangladesh
https://orcid.org/0000-0002-5305-6724
Lamia Islam
Lecturer, Department of Business Administration, University of Asia Pacific, Bangladesh
https://orcid.org/0009-0005-1907-1399
Nurul Mohammad Zayed
Associate Professor, Faculty of Business & Communications (FBC), INTI International University, Nilai, Malaysia
https://orcid.org/0000-0001-7519-6552
Guneratne Wickremasinghe
Senior Lecturer, College of Business, Victoria University, Australia
https://orcid.org/0000-0001-6946-0660
Werner Krings
Professor, Department of Marketing, Framingham State University, United States
https://orcid.org/0000-0002-2071-5703

Abstract

Emerging-market firms are asked to fund environmental, social and governance commitments at a moment when capital is scarce and investors still question whether corporate sustainability spending destroys or creates shareholder wealth; in Bangladesh, where the cumulative intensity of green-banking and disclosure directives has risen almost eightfold since 2004, the value consequences of such spending remain unsettled. This study examines whether ESG investment raises firm value and whether corporate reputation conditions that relationship. The analysis employs a balanced panel of 110 non-financial firms listed on the Dhaka Stock Exchange over 2004–2024, comprising 2,310 firm-year observations, and applies two-way fixed-effects moderation models, panel unit-root and cointegration tests, pooled mean group ARDL estimation, a panel vector autoregression with variance decomposition, Dumitrescu–Hurlin causality tests, mediation decomposition and two-stage least squares. The results show that ESG investment raises Tobin’s Q (β = 0.126, p = .001) and that the ESG × reputation interaction is positive and significant (β = 0.117, p < .001), lifting explained variance by 5.5 percentage points; the marginal effect of ESG investment is indistinguishable from zero below a Johnson–Neyman reputation threshold of 49.6 and reaches 0.305 one standard deviation above the reputation mean. Panel cointegration is confirmed, the pooled mean group long-run ESG coefficient is 0.457, and the error-correction speed is −0.619. The findings suggest that reputation is a complement rather than a substitute for ESG investment, that approximately 15% of the ESG–value relation is transmitted through reputation building, and that the payoff to sustainable growth commitments is contingent rather than automatic.


JEL Classification Codes: G32, M14, Q56, C33, G34, O16.

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Vol. 11 No. 5 (2026): Continuous Publication

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Research Paper/Theoretical Paper/Review Paper/Short Communication Paper
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This work is licensed under a Creative Commons Attribution 4.0 International License.

Author Biographies

K. M. Anwarul Islam , Research Professor, Department of Business Administration, University of Asia Pacific, Bangladesh

Dr. K. M. Anwarul Islam is a Full Research Professor, Department of Business Administration, University of Asia Pacific (UAP), BD and a Research Fellow at INTI International University, Malaysia. He previously served as Dean of the School of Business and Social Sciences and as Chairman of the Department of Business Studies at the State University of Bangladesh. He is a graduate of the University of Dhaka and earned his PhD from Universiti Selangor, Malaysia. Through his scholarly output and academic leadership, he has established himself as an internationally recognised researcher in finance and banking.

Dr. Islam has authored or presented approximately 200 research papers, appearing in journals listed in the ABDC, ABS and ERA rankings and indexed in Scopus (Q1/Q2) and Web of Science (SCIE, SSCI and ESCI). He has also written five books, serves on the editorial boards of several international journals, and contributes to a number of professional societies and institutional committees.

As of September 2026, his work has attracted more than 4,194 citations on Google Scholar, with an h-index of 33 and an i10-index of 119, and 1004 citations on Scopus, with an h-index of 20. He has been recognised as a Top Scientist by the AD Scientific Index, which ranked him first in Bangladesh in Business Administration for 2027.

Lamia Islam , Lecturer, Department of Business Administration, University of Asia Pacific, Bangladesh

Lamia Islam is a Lecturer in the Department of Business Administration at the University of Asia Pacific (UAP), Bangladesh. She is involved in teaching and academic activities, with a focus on developing students’ knowledge and practical understanding of business and management.

Nurul Mohammad Zayed , Associate Professor, Faculty of Business & Communications (FBC), INTI International University, Nilai, Malaysia

Dr. Nurul Mohammad Zayed is an Associate Professor (Research Track) in the Faculty of Business & Communications at INTI International University, Nilai, Malaysia. He holds a PhD in Management and specializes in Economics, Finance, international business, and economic development. He is an active researcher with extensive publications in business, economics, and finance.

Guneratne Wickremasinghe , Senior Lecturer, College of Business, Victoria University, Australia

Guneratne Wickremasinghe is a Senior Lecturer in the College of Business at Victoria University, Australia. His academic and research interests include accounting, finance, corporate governance, and business-related fields. He has contributed to academic research and teaching in business and accounting.

Werner Krings , Professor, Department of Marketing, Framingham State University, United States

Werner Krings is a Professor in the Department of Marketing at Framingham State University, United States. His academic interests include marketing, consumer behavior, and related areas of business. He is engaged in teaching, research, and academic development in the field of marketing.

How to Cite

Islam , K. M. A. ., Islam , L. ., Zayed , N. M., Wickremasinghe , G. ., & Krings , W. . (2026). ESG INVESTMENT AND FIRM VALUE: THE MODERATING ROLE OF CORPORATE REPUTATION IN ADVANCING CORPORATE SUSTAINABILITY AND SUSTAINABLE GROWTH IN BANGLADESH. Bangladesh Journal of Multidisciplinary Scientific Research, 11(5), 45-64. https://doi.org/10.46281/bjmsr.v11i4.2951
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