Intellectual Capital Efficiency, Innovation, Sensitive Industries and Environmental, Social and Governance Performance: Evidence from Malaysian Public Listed Companies
List of Authors
Fathyah Hashim, Norsafrina Mansori
Keyword
Intellectual Capital Efficiency, Environmental, Social and Governance Performance, Innovation and Sensitive Industries
Abstract
There is growing awareness of the crucial role intangible assets play in corporate sustainability and to achieve the Sustainable Development Goals (SDGs). Intangible assets are recognized as key drivers influencing Environmental, Social and Governance (ESG) performance. This research examines how components of Intellectual Capital Efficiency (ICE) influence the ESG performance of Malaysian Public Listed Companies (PLCs) within the theoretical framework of the Resource-Based View (RBV) theory. It further investigates how innovation and sensitive industries moderate the relationship. Data from 161 Bursa Malaysia PLCs in 2022 were analyzed using STATA software to test the hypotheses developed. The findings revealed that Human Capital Efficiency (HCE) and Structural Capital Efficiency (SCE) influence ESG performance. Innovation positively moderates the relationship between HCE and ESG performance, while the influence of SCE on ESG performance is stronger in sensitive industries. Relational Capital Efficiency (RCE) and Capital Employed Efficiency (CEE) revealed no significant influence. These findings offer valuable insights for PLC managers to prioritize investments in HCE and SCE to improve ESG. Policymakers and regulators can also collaborate with Malaysian PLCs to develop regulatory frameworks that encourage intellectual capital investments for sustainable development.