Influence of Proactive ESG Strategies, Slack Resources, and Collective Brain on ESG Disclosure and Firm Value in Japanese Companies

Abstract

This study examines the influence of firms' proactive ESG strategies (PESGS) and slack resources on ESG disclosure quality and firm value in Japanese companies, using a cross-sectional sample of 107 firms. The findings reveal that PESGS and slack resources positively influence firm value, with ESG disclosure quality mediating the relationship between PESGS and firm value. The study introduces the concept of the collective brain, which moderates the effect of slack resources on firm value by fostering innovation through shared knowledge with cultural diversity. Employing a multi-theory approach—the resource-based view, dynamic capability theory, and voluntary disclosure theory—this study addresses gaps in ESG literature, offering insights into how ESG practices and disclosure create firm value. The study highlights the importance of strategic resources and capabilities and innovation in enhancing firm value through ESG, providing practical implications for managers, investors, and academics aiming to align sustainability with stakeholder expectations.