Digital Intensity, ESG Performance and Market Valuation: A Fixed-Effects and Shapley Decomposition Analysis of European Banks

Digital Intensity, ESG Performance and Market Valuation: A Fixed-Effects and Shapley Decomposition Analysis of European Banks | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Digital Intensity, ESG Performance and Market Valuation: A Fixed-Effects and Shapley Decomposition Analysis of European Banks Raminta Vaitiekuniene, Alfreda Sapkauskiene, Sandra Morini Marrero, and 2 more This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-9377446/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This article examines the effects of digital intensity and sustainability performance on market valuation of banks in Europe over the period 2010–2024. Using a panel dataset of 192 European banks, the analysis employs fixed-effects (FE) regression models to estimate empirical relationships and complements them with Shapley value decomposition to evaluate the relative importance of explanatory variables. Tobin Q and the Price-to-Book (P/B) ratio measure market valuation, accommodating long-term growth expectations and short-term market perceptions. Digital intensity is operationalized by the intangible assets to total assets ratio, as intangible assets reflect banks’ investments in digital technologies and capabilities underpinning digital transformation. Sustainability performance in terms of ESG disclosure scores and their environmental, social, and governance dimensions. Findings indicate that digital intensity is a strong and dominant predictor of bank market valuation, in terms of all model specifications, suggesting it can have a positive influence on investor perception and competitive position. The strong positive relationship between ESG performance and valuation is also confirmed, in that governance and social factors have a stronger and more enduring effect relative to environmental factors. The Shapley decomposition also shows that, though more traditional accounting factors are still the prominent driver for valuations, digital intensity is an effective and growing contributor, especially concerning short-term market valuations. Taken together, the results indicate that digital intensity and sustainability performance are complementary drivers of market value through enhanced effectiveness, enhanced reputation, and sustained financial stability. digital intensity ESG performance bank valuation Tobin Q Price-to-Book ratio Shapley value European banks Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-9377446","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":624201882,"identity":"6766af52-dc53-421c-94e8-804b9dc44b76","order_by":0,"name":"Raminta Vaitiekuniene","email":"data:image/png;base64,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","orcid":"","institution":"Vilnius University","correspondingAuthor":true,"prefix":"","firstName":"Raminta","middleName":"","lastName":"Vaitiekuniene","suffix":""},{"id":624201883,"identity":"a159b0d7-8028-415a-bd7e-24ecc6a2d24f","order_by":1,"name":"Alfreda Sapkauskiene","email":"","orcid":"","institution":"Vilnius University","correspondingAuthor":false,"prefix":"","firstName":"Alfreda","middleName":"","lastName":"Sapkauskiene","suffix":""},{"id":624201887,"identity":"c47f2193-498a-4ecb-a041-11f900df10c7","order_by":2,"name":"Sandra Morini Marrero","email":"","orcid":"","institution":"University of La Laguna","correspondingAuthor":false,"prefix":"","firstName":"Sandra","middleName":"Morini","lastName":"Marrero","suffix":""},{"id":624201888,"identity":"00ccd7e9-de2e-4820-88f2-5fa9a88e39e3","order_by":3,"name":"Javier Giner Rubio","email":"","orcid":"","institution":"University of La Laguna","correspondingAuthor":false,"prefix":"","firstName":"Javier","middleName":"Giner","lastName":"Rubio","suffix":""},{"id":624201890,"identity":"0ab94dc2-1b77-4ab3-992d-91d2a3035425","order_by":4,"name":"Rytis Krusinskas","email":"","orcid":"","institution":"Kaunas University of Technology","correspondingAuthor":false,"prefix":"","firstName":"Rytis","middleName":"","lastName":"Krusinskas","suffix":""}],"badges":[],"createdAt":"2026-04-10 09:25:24","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-9377446/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-9377446/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":107708094,"identity":"8c50d2e7-bfce-4b21-838a-51de2999866f","added_by":"auto","created_at":"2026-04-24 09:21:53","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":719715,"visible":true,"origin":"","legend":"","description":"","filename":"Manuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-9377446/v1_covered_a6b1623d-df61-46f1-9a9d-581e681924d1.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Digital Intensity, ESG Performance and Market Valuation: A Fixed-Effects and Shapley Decomposition Analysis of European Banks","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"digital intensity, ESG performance, bank valuation, Tobin Q, Price-to-Book ratio, Shapley value, European banks","lastPublishedDoi":"10.21203/rs.3.rs-9377446/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-9377446/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis article examines the effects of digital intensity and sustainability performance on market valuation of banks in Europe over the period 2010\u0026ndash;2024. 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