Title: The Role of Environmental Dynamics and Financial Performance on the Influence of Green Innovation on Company Value
Author: Rina Yuniarti
Affiliations : Doctoral Program in Accounting, Faculty of Economics and Business, Universitas Airlangga , Surabaya, Indonesia
Publisher: Universitas Airlangga
Abstract
This research aims to examine the effect of green innovation (green product innovation and green process innovation) on financial performance with environmental dynamics as moderation. This research also tests financial performance variables as mediating effects of green innovation on company value. The sample for this research is manufacturing companies listed on the Indonesia Stock Exchange in 2012-2018 with a total of 412 firm years of observations. The data used is secondary data obtained from annual reports and financial reports accessed via idx.co.id and green process innovation reports accessed via mnlh.go.id. The proxies for each variable, namely, the independent variables are green product innovation and green process innovation. Green product innovation is measured by content analysis. Green process innovation is measured by ISO 14001 and PROPER. The mediating variable is financial performance measured by ROA (Return On Assets). The moderating variable is environmental dynamics measured by the Herfindall Index. The dependent variable is company value measured by Tobin's Q. The results prove that environmental dynamics moderate the influence of green product innovation and green process innovation on financial performance. The financial performance variable is the intervening influence of green product innovation and green process innovation on company value. The results of this research can be used by regulators as consideration for determining policies related to green innovation and motivating companies and investors to care about the environment. This research is the first research to use a comprehensive model of green innovation on company value. Further research can use surveys or Focus Group Discussions (FGD) to determine categories of green innovation items.
Keywords: Environmental dynamics, green product innovation, green process innovation, financial performance, company value
