Regional firm's market value with 5Ps for sustainability: Evidence from India.

The present article examines whether, when, and how corporate Sustainable Development Goals (SDGs) adoption, along with its subdimensions of 5Ps (People, Planet, Prosperity, Partnership, and Peace), are associated with firm market value using Indian-listed firms. Findings reveal that SDGs adoption by firms has a significant positive impact on their market value. Additionally, among the 5Ps, Planet SDGs adoption demonstrates the most substantial effect on firm market value. Results remain robust even when adopting an alternate measure to capture firm market value and after controlling for endogeneity concerns. Furthermore, mechanism analysis indicates that SDGs increase a firm's market value by reducing information asymmetry, lowering agency costs, and enhancing environmental, social, and governance (ESG) performance. Finally, heterogeneity analysis reveals that the positive impact of SDGs on firm market value is accentuated in non-state-owned businesses, enterprises with unitary board structures, and enterprises with large board sizes. However, executive member gender diversity does not exhibit a substantial heterogeneous effect. These findings present a compelling rationale for policymakers to incentivize SDG adoption practices and encourage corporate leaders to prioritize SDG adoption initiatives for sustained financial performance.