DOI: 10.12688/f1000research.178277.2 ISSN: 2046-1402

FinTech Adoption and ESG Disclosure in Corporate Valuation: Intellectual Capital and Financial Performance Effects on Dividend Policy and Firm Value

Md Qamruzzaman, Abdulrahman Alomair, Mohammed Alomair
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Background This paper examines the complex interconnections among FinTech adoption, intellectual capital, ECG disclosure, and dividend policy, and their impacts on corporate value in financial institutions of emerging economies. Questioning traditional corporate finance theory, which often undervalues non-physical assets, the scholarship is propelled by the growing gap between market and book value, which, in turn, is enhanced by the process of digital transformation and the strategic importance of data and intellectual property. Method Our hypothesis is formulated as an opportunity to explain and confirm the full effect of these variables on a company’s value through a complex framework that will successfully fill a gap in the existing literature on the synergistic synthesis of these variables in the so-called Digital-ESG-Value nexus. Using a sample of DSE-listed financial institutions from 2015 to 2023, we employ rigorous econometric methods, including fixed-effects models, dynamic panel GMM, CS-ARDL, quantile regressions, and deep neural network models, to ensure our conclusions are sound and valid. Findings The empirical findings clearly show that FinTech adoption, intellectual capital, ESG disclosure, and dividend policy, when combined with various proxies, have a significant positive influence on firm value. ESG disclosure is observed to have a substantial moderating effect on the dividend policy and firm value, strengthening the plausibility of dividend payments. Financial performance also serves as a moderating factor between ESG and the dividend policy. Quantile regressions also help understand heterogeneity, showing that better-performing companies reap disproportionately from these strategic features. Findings The empirical findings clearly show that FinTech adoption, intellectual capital, ESG disclosure, and dividend policy, when combined with various proxies, have a significant positive influence on firm value. ESG disclosure is observed to have a substantial moderating effect on the dividend policy and firm value, strengthening the plausibility of dividend payments. Financial performance also serves as a moderating factor between ESG and the dividend policy. Quantile regressions also help understand heterogeneity, showing that better-performing companies reap disproportionately from these strategic features. Conclusion These results have significant theoretical implications by applying the assumptions of Signaling Theory, the Resource-Based View, and Stakeholder Theory in an evolving digital environment. In practice, the research provides practical guidance to managers who need to determine how to allocate resources to maximise the sustainability of value creation between technology and human resource.

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