IDEAS home Printed from https://ideas.repec.org/a/bjz/ajisjr/2242.html
   My bibliography  Save this article

The Effect of Environmental Performance on Firm Value with Mediating Role of Financial Performance in Manufacturing Companies in Indonesia

Author

Listed:
  • Teddy Hikmat Fauzi

Abstract

The purpose of this study is to investigate the determinants of firm value by formulating the relationship between environmental performance and the intervening variable of financial performance. This study analyzes how public companies in Indonesia comply with environmental responsibility and use it as a basis for increasing corporate value. Using the sampling of purposive sampling method, the research was conducted by examining 64 basic industries and mining companies listed on the Indonesia Stock Exchange during 2016-2018. Empirical testing is done by path analysis. The results of the study suggest that firms are more likely to be able to increase the utility of environmental performance by mediating effects of financial performance. This means that the environmental performance effect is more likely in firms that have superior financial performance. Practically speaking, the results have implications that the implementation of environmental responsibility supported by adequate financial resources can significantly affect the perception of sustainability by company stakeholders and ultimately increase firm value.

Suggested Citation

  • Teddy Hikmat Fauzi, 2022. "The Effect of Environmental Performance on Firm Value with Mediating Role of Financial Performance in Manufacturing Companies in Indonesia," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 11, May.
  • Handle: RePEc:bjz:ajisjr:2242
    DOI: https://doi.org/10.36941/ajis-2022-0081
    as

    Download full text from publisher

    File URL: https://www.richtmann.org/journal/index.php/ajis/article/view/12917
    Download Restriction: no

    File URL: https://www.richtmann.org/journal/index.php/ajis/article/view/12917/12512
    Download Restriction: no

    File URL: https://libkey.io/https://doi.org/10.36941/ajis-2022-0081?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Tze San Ong & Boon Heng Teh & Sin Huei Ng & Wei Ni Soh, 2016. "Environmental Management System and Financial Performance," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 8(2), pages 27-53, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Quang Linh Huynh & Tran Thi Ngoc Lan, 2021. "Importance of Environmentally Managerial Accounting to Environmental and Economic Performance," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 381-388.
    2. Yang Liu & Ling Tang, 2024. "Environmental Penalties, Internal and External Governance, and Green Innovation: Does the Deterrence Effect Work?," Sustainability, MDPI, vol. 16(16), pages 1-17, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bjz:ajisjr:2242. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Richtmann Publishing Ltd (email available below). General contact details of provider: https://www.richtmann.org/journal/index.php/ajis .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.