DETERMINING COMPANY VALUE IN THE DIGITAL ECONOMY ERA: ANALYSIS OF DIGITAL INNOVATION, INTANGIBLE ASSETS, AND SUSTAINABILITY REPORTING

Abstract

This study aims to empirically examine the impact of digital innovation, intangible assets, and sustainability reporting on company value in Indonesia's technology sector. The shift from physical assets to digital ecosystems poses significant challenges for firm valuation, often leading to an information gap in which conventional financial statements fail to reflect true economic value. Using Signalling Theory, this research analyses how investors respond to financial and non-financial information. The study employs a quantitative explanatory approach, focusing on technology companies listed on the Indonesia Stock Exchange from 2023 to 2025. Through purposive sampling, 23 companies were selected, resulting in 69 observations. The data were analysed using multiple linear regression. Company value is measured by Tobin's Q, while independent variables include R&D intensity, intangible asset ratios, and ESG disclosure indexes. The results reveal that digital innovation has a significant negative effect on company value, suggesting that investors perceive high innovation costs as short-term financial burdens. Intangible assets show no significant impact, indicating a decoupling between book value and market valuation. Conversely, sustainability reporting significantly and positively influences company value, proving that ESG transparency is a high-quality signal that enhances investor trust. These findings contribute to accounting literature by integrating financial and non-financial factors into a single empirical model. Practically, the study recommends that management strengthen communication strategies through transparent sustainability reporting to mitigate information asymmetry and maximise shareholder wealth in the digital era.