The Relationship Between Sustainability Assessment Scores on Return on Equity and Stock Prices of Companies Listed on the Stock Exchange of Thailand
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Abstract
The objective of this study is to examine the relationships among firms’ sustainability assessment scores, return on equity (ROE), and stock prices; the relationship between ROE and stock prices; as well as the mediating role of ROE in the relationship between sustainability assessment scores and stock prices of companies listed on the Stock Exchange of Thailand (SET). Data were collected from 558 companies listed on the Stock Exchange of Thailand in 2024.Descriptive statistics, Pearson’s correlation coefficients, and multiple regression analysis were employed to test the hypotheses. The findings revealed that 1) sustainability assessment scores were positively correlated with ROE; 2) ROE is positively correlated with stock prices;(3) sustainability assessment scores were positively correlated with stock prices; and (4) ROE partially mediated the relationship between sustainability assessment scores and stock prices. These results indicated that sustainability assessment scores, although non-financial in nature, were significantly associated with firms’ operating performance and market value. The findings were consistent with stakeholder theory, which suggested that firms’ environmental, social, and governance (ESG) practices aligned with stakeholder expectations enhance organizational outcomes and market valuation.
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