Integrity and Green Value: Reducing Fraud and Tax Avoidance for Sustainable Business in ASEAN

Abstract

This study investigates how financial practices influence market value-oriented sustainability (green value) in the mining sector. The research aims to analyze the effects of fraudulent financial reporting, financial performance, and tax avoidance on green value, with integrity serving as a moderating variable. The study covers mining companies in Indonesia and Malaysia during the 2018–2023 period. Out of 89 listed companies, 70 met the sample criteria, yielding a total of 420 firm-year observations. The data were analyzed using panel data regression with Stata version 17. The results show that fraud has a positive and significant effect on green value, suggesting that the market still perceives manipulated financial reporting as a positive signal. Conversely, tax avoidance has a negative and significant impact on green value, reflecting investors’ sensitivity to unethical tax behavior. Integrity, however, does not moderate the relationship between fraud or tax avoidance and green value. These findings imply that market participants in the mining sector may undervalue the long-term risks associated with fraudulent reporting while penalizing tax avoidance activities. The study contributes to the growing literature on financial integrity and sustainability by providing cross-country evidence from ASEAN mining industries. It also offers practical implications for regulators, investors, and corporate managers to enhance governance quality, transparency, and sustainable market performance.