ESG Performance and Bankruptcy Risk in Southeast Asia: Moderating Role of Board Gender Diversity

Abstract

This study examines the impact of Environmental, Social, and Governance (ESG) performance on bankruptcy risk while investigating the moderating role of board gender diversity in Southeast Asia non-financial firms. Using a longitudinal dataset of 131 publicly listed companies and 1,310 firm-year observations over ten years (2015-2024), data were analyzed with STATA version 17 employing panel regression techniques. The findings reveal that superior ESG performance significantly reduces bankruptcy risk, and this protective effect is strengthened by greater board gender diversity. These results provide robust empirical evidence supporting the integration of inclusive governance with sustainable business practices to enhance corporate financial resilience. The originality of this research lies in its longitudinal design spanning a decade and its focus on the moderating role of board gender diversity within the Southeast Asia context—an area where rigorous empirical studies remain scarce, offering a valuable contribution to ESG and corporate governance literature. Theoretically, this study deepens understanding within agency and stakeholder frameworks on how governance diversity enhances ESG outcomes. Practically, it highlights the strategic importance for companies and regulators to promote gender-balanced boards alongside robust ESG initiatives, fostering sustainable growth and mitigating financial distress risks in rapidly evolving markets.

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