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Mediating Role of Sustainability Reporting Quality on the Relationship Between Green Banking and Firm Value

Author

Listed:
  • Rahman Aulia Fuad

    (Faculty of Economics and Business, University of Brawijaya, Indonesia)

  • Agusti Rosalita Rachma

    (Faculty of Administrative Science, University of Brawijaya, Indonesia)

  • Kurniawati Desi Tri

    (Faculty of Economics and Business, University of Brawijaya, Indonesia)

Abstract

The mounting environmental concerns have become a pressing issue across industries. Nevertheless, the banking sector has a distinct influence in shaping economic growth and development. This study sought to evaluate the impact of green banking in strengthening corporate value through its level of sustainability reporting in order to address these concerns. A research framework was developed based on theoretical support. The sampled data was collected from banks listed on the Indonesian Stock Exchange from 2018-2021. An empirical analysis was performed through hierarchical regression. The study’s findings indicated that green banking positively and significantly impacts firm value. Furthermore, there is a mediating effect between green banking and business value due to the quality of sustainability reporting. The empirical test revealed that the quality of sustainability reporting has a mediating effect to some extent. The results also showed that there is an interaction between business size (assets) and correlations between firm value and green banking. By undertaking a data-driven research that explains the impact of green banking on business value, this study aims to fill a significant gap in the body of knowledge on green banking and sustainability reporting.

Suggested Citation

  • Rahman Aulia Fuad & Agusti Rosalita Rachma & Kurniawati Desi Tri, 2024. "Mediating Role of Sustainability Reporting Quality on the Relationship Between Green Banking and Firm Value," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 34(4), pages 105-129.
    • Handle: RePEc:vrs:suvges:v:34:y:2024:i:4:p:105-129:n:1005
    DOI: 10.2478/sues-2024-0020
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    More about this item

    Keywords

    Green banking; Sustainability reporting quality; Firm value; Banking sector;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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