The associations between environmental disclosures with financial performance, environmental performance, and firm value

2018 ◽  
Vol 14 (1) ◽  
pp. 180-193 ◽  
Author(s):  
Refandi Budi Deswanto ◽  
Sylvia Veronica Siregar
Keyword(s):  
Financial Performance ◽  
Environmental Performance ◽  
Firm Value ◽  
Stock Exchange ◽  
Mining Industry ◽  
Simultaneous Equation ◽  
Annual Reports ◽  
Equation Modeling ◽  
Content Type ◽  
Environmental Disclosures

Purpose This study aims to investigate both the direct and indirect associations of environmental disclosures with financial performance, environmental performance and firm value. Design/methodology/approach The samples are companies listed on the Indonesia Stock Exchange in the agriculture industry, mining industry, basic industry and chemicals, miscellaneous industry and consumer goods industry and that are participating in the Performance Rating Assessment Program on Environment Management (PROPER/Program Penilaian Peringkat Kinerja Perusahaan) of the Ministry of the Environment Republic of Indonesia or have been awarded the Green Industry Award by the Ministry of Industry Republic of Indonesia in 2012-2014. Data are collected from sustainability reports, annual reports and annual financial statements. The authors used simultaneous equation modeling and panel data regression analysis to analyze the data. Findings The authors find that the financial performance does not affect the environmental disclosures. The lagged environmental performance has a positive effect on the current environmental disclosures, and environmental disclosures do not affect the firm market value and do not mediate the effect of financial performance and environmental performance on firm value. Originality/value This study comprehensively examines both direct and indirect associations of environmental disclosures with financial performance, environmental performance and firm value, which is rarely examined in extant studies.

scholarly journals Environmental Performance and Firm Value: Testing the Role of Firm Reputation

2019 ◽  
Vol 11 (1) ◽  
pp. 137
Author(s):  
Khanifah Khanifah ◽  
Jaka Isgiyarta ◽  
Fitri Alfiana ◽  
Udin Udin
Keyword(s):  
Environmental Performance ◽  
Firm Value ◽  
Structural Equation ◽  
Stock Exchange ◽  
Mining Industry ◽  
Equation Modeling ◽  
Firm Reputation ◽  
Industry Sectors ◽  
The Relationship

This study aims to analyze the empirical evidence about the effect of environmental performance on firm value mediated by firm reputation. The sample of this study is the mining industry sectors listed on the Indonesia Stock Exchange from 2015 to 2018. The data is analyzed using partial least squares based structural equation modeling (PLS-SEM) with WarpPLS 6.0 software. The results show that environmental performance has a positive and significant effect on firm reputation. In contrast to the expectation, environmental performance has a negative and significant effect on firm value. Firm reputation further becomes a significant mediator in the relationship between environmental performance and firm value. These findings recommend for future studies to expand the objects and extend the observation period.

scholarly journals The relationship between intellectual capital information and firms’ market value: a study from an emerging economy

2019 ◽  
Vol 24 (1) ◽  
pp. 39-51
Author(s):  
A.A. Ousama ◽  
Mashael Thaar Al-Mutairi ◽  
A.H. Fatima
Keyword(s):  
Intellectual Capital ◽  
Firm Value ◽  
Stock Exchange ◽  
Market Value ◽  
Total Sample ◽  
Emerging Economy ◽  
Annual Reports ◽  
Content Type ◽  
Knowledge Based Economy ◽  
The Relationship

Purpose The purpose of this paper is to investigate the relationship between the intellectual capital (IC) information reported in the annual reports and market value of the companies listed on the Qatar Stock Exchange. Design/methodology/approach The study is based on a panel data collected from the annual reports and Bloomberg database for six years, specifically the periods 2010-2012 and 2016-2018. The total sample consists of 252 observations. The theoretical framework was developed in reference to the resource-based theory. The regression model is based on Ohlson’s model, which has been modified by including IC information. Findings The study found that there is a significant relationship between IC information and firm market value. This finding indicates that companies report their IC to help the stakeholders (e.g. shareholders, investors) to understand the real value of the company (which includes IC values). Practical implications The shift to a knowledge-based economy (KBE) has made knowledge a driver for economic growth, and it has become more important than capital, land and labour. This shift makes IC and resources vital for companies to create wealth, value and gain competitive advantage. The State of Qatar plans to transform its economy to a KBE in its “Qatar Vision 2030”. The findings of the study show that the companies have started to depend more on IC to contribute to transforming Qatar’s economy to a KBE. Originality/value This study could be considered a pioneer study to examine the association of IC disclosure and firm value in Qatar. Furthermore, prior literature has mixed findings, which justifies further investigation of IC’s effect on market value, particularly in the emerging economy of Qatar.

scholarly journals INTENSITAS RESEARCH AND DEVELOPMENT, GOODWILL, INTELLECTUAL CAPITAL DAN PERFORMA FINANSIAL SEBAGAI PENENTU NILAI PERUSAHAAN

2021 ◽  
Vol 1 ◽  
pp. 296-306
Author(s):  
Ellen Monata Wahono ◽  
Shinta Permata Sari
Keyword(s):  
Research And Development ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Firm Value ◽  
Stock Exchange ◽  
Total Sample ◽  
Annual Reports ◽  
Manufacturing Companies ◽  
Fierce Competition ◽  
A Company

The increasingly fierce competition that occurs between companies in the  current  era of globalization is forcing the company to improve its strategies. Therefore, the main purpose of establishing a company is to increase the value of the firm. To achieve that purpose,managers have to understand the factors that can increase the value of the firms and also fulfillthe interests of stakeholders. This study aims to analyze the effect of Research and Development Intensity (RnD), Goodwill (GDW), Intellectual Capital (IC), and Financial Performance (PF) on Firm Value. The research data is obtained from  the  annual reports  of  manufacturing  companies  listed  on the Indonesia  Stock  Exchange  in 2015-2019 with a total sample of 60 after meeting certain criteria. The data is analyzed using multiple linear regression analysis.The results show that goodwill, intellectual  capital,  and financial performance have an effect on firm value. Meanwhile, the intensity of research and development has no effect on firm value The increasingly fierce competition that occurs between companies in the  current  era of globalization is forcing the company to improve its strategies. Therefore, the main purpose of establishing a company is to increase the value of the firm. To achieve that purpose,managers have to understand the factors that can increase the value of the firms and also fulfillthe interests of stakeholders. This study aims to analyze the effect of Research and Development Intensity (RnD), Goodwill (GDW), Intellectual Capital (IC), and Financial Performance (PF) on Firm Value. The research data is obtained from  the  annual reports  of  manufacturing  companies  listed  on the Indonesia  Stock  Exchange  in 2015-2019 with a total sample of 60 after meeting certain criteria. The data is analyzed using multiple linear regression analysis.The results show that goodwill, intellectual  capital,  and financial performance have an effect on firm value. Meanwhile, the intensity of research and development has no effect on firm value    

scholarly journals The Mediation Effect Firm Performance on Green Innovation and Firm Value: Evidence the Mining Industry

2021 ◽  
Vol 12 (3) ◽  
pp. 1377-1783
Author(s):  
Andi Auliya Ramadhany Et.al
Keyword(s):  
Financial Performance ◽  
Firm Value ◽  
Stock Exchange ◽  
Mining Industry ◽  
Secondary Data ◽  
Total Sample ◽  
Iso 14001 ◽  
Mediation Effect ◽  
Environmental Damage ◽  
Green Innovation

Global warming is currently an issue that is widely discussed of both the accounting literature and others. The topic of environmental performance is gaining increasing attention from academics and politics when it is associated with each country’s policies regarding environmental damage. Purpose: This article to investigate both the direct and indirect the effect of green innovation and firm value on financial performance as mediating variable Design/methodology/approach: The samples in this study are applied using purposive sampling ad obtained total sample of PROPER participating companies listed in Indonesia Stock Exchange during the year of 2012-2018. The data used in this study are secondary data obtained from annual report. Companies are listed on the Indonesia Stock Exchange in mining industry in 2012-2018. The variable green innovation was measured by using PROPER, the financial performance was measured by ROA and the firm value were measured by Tobin’s Q. Data processing uses SEM-PLS with WarpPLS 6.0 with the consideration that SEM-PLS is a reliable tool for testing predictive models. Several studies using capital market data in Indonesia have found data with abnormal distribution, so data using PLS is appropriate. Result of the study: The authors find that the green innovation has a positive effect on the firm value and financial performance full mediate the effect green innovation and firm value. Research limitations: this article only examines green innovation using the PROPER measure while the green innovation measure is thought to be related to company value such as ISO 14001, content analysis is not discussed at all in this article and the research sample is limited to mining companies. This scope may not be able to describe the overall conditions in Indonesia. Originality/value: This study comprehensively examines both direct and indirect effect of green innovation with financial performance and firm value, which is rarely examined in extant studies.

The impact of environmental performance on capital structure and firm performance: the case of Turkey

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ismail Kalash
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Stock Returns ◽  
Environmental Performance ◽  
Positive Impact ◽  
Stock Exchange ◽  
Ordinary Least Squares ◽  
Content Type ◽  
The Impact ◽  
The Capital Structure

Purpose The purpose of this study is to investigate the effect of environmental performance on the capital structure and financial performance of Turkish listed firms. Design/methodology/approach This study used data of 49 firms listed on Istanbul Stock Exchange during the period between 2014 and 2019, resulting in 205 firm-year observations. The environmental performance data were drawn from the carbon disclosure project Turkey climate change reports. Ordinary least squares and binary logistic regression models were used to examine whether environmental performance impacts the capital structure and financial performance. Findings The findings of this research revealed that environmental performance significantly positively affects the firm leverage. Findings also showed that environmental performance has a significantly positive impact on return on assets, operating profitability and return on equity, but no significant impact on stock returns. Practical implications Given the increased borrowing costs for Turkish firms after the 2018 currency crisis in Turkey, the findings of this study are very important as they enable managers of Turkish firms to make better decisions related to capital structure and to understand the role of environmental performance in reducing the cost of debt and enhancing financial performance. Originality/value To the author’s knowledge, this research is the first to investigate the effect of environmental performance on capital structure in the Turkish context, and is one of few that explained how environmental performance affects the financial performance of Turkish firms.

scholarly journals PENGARUH KINERJA LINGKUNGAN DAN BIAYA LINGKUNGAN TERHADAP KINERJA KEUANGAN DENGAN PENGUNGKAPAN LINGKUNGAN SEBAGAI VARIABEL INTERVENING (Studi Empiris Pada Perusahaan Pertambangan Yang Terdaftar di BEI Tahun 2014-2018

2020 ◽  
Vol 5 (2) ◽  
pp. 123-138
Author(s):  
Mas Findi Mulya Saputra
Keyword(s):  
Linear Regression ◽  
Financial Performance ◽  
Environmental Performance ◽  
Stock Exchange ◽  
Sampling Technique ◽  
Environmental Costs ◽  
Environmental Disclosure ◽  
Mining Companies ◽  
Environmental Disclosures ◽  
Positive Effect

This study aims to determine the effect of environmental performance and environmental costs on financial performance with environmental disclosure as an intervening variable. The population in this study are mining companies listed on the Indonesia Stock Exchange (IDX) in 2014-2018. By using purposive sampling technique obtained 45 sample companies and analyzed using multiple linear regression. The results of this study indicate that (1) environmental performance has a positive effect on financial performance (2) environmental costs have no positive effect on financial performance (3) environmental disclosure has no positive effect on financial performance. (4) Environmental Performance has a positive effect on Environmental Disclosure. (5) Environmental Costs have no positive effect on Environmental Disclosure. (6) Environmental Performance against Financial Performance is mediated by Environmental Disclosures. (7) Environmental Costs to Financial Performance are not mediated by Environmental Disclosures.

Firm value and social contribution with the interaction of corporate governance

2018 ◽  
Vol 9 (2) ◽  
pp. 165-200 ◽  
Author(s):  
Carlos Noronha ◽  
Jieqi Guan ◽  
Jing Fan
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Stock Exchange ◽  
Social Performance ◽  
Annual Reports ◽  
Chinese Market ◽  
Content Type ◽  
The World ◽  
Social Contribution ◽  
Corporate Social

Purpose This study aims to investigate the relationship between corporate social contribution measures and investors’ reaction under the effect of corporate governance for firms listed in China, the largest emerging economy in the world. Corporate social contribution is examined from an informative perspective by using a financial indicator – social contribution value per share (SCVPS) brought up by the Shanghai Stock Exchange in 2008. Design/methodology/approach Data are obtained from two channels: financial information during 2007-2015 generated from database and social accounting information manually collected from the 2007-2015 annual reports and social reports. Findings It is predicted that investors’ reaction toward corporate social contribution becomes stronger for companies with higher corporate governance quality. Practical implications This paper is one of the first to use Chinese SCVPS data to indicate the informativeness of social contribution toward firm value. It can serve as a valuable reference to both investors and companies in terms of the issue of social contribution. Social implications The study highlights the importance of social contribution on firm value by using an empirical approach in the Chinese market. The study can be used as a reference for many other developing countries in the world. Originality/value The findings of this study can provide guidance to investors on how to evaluate a firm’s social performance and encourage companies to improve the transparency of their social reporting, as well as the quality of corporate governance.

scholarly journals The Effect Of Greenhouse Gas Emissions Disclosure And Environmental Performance On Firm Value: Indonesia Evidence

2019 ◽  
Author(s):  
Gabrielle Gabrielle ◽  
Agus Arianto Toly
Keyword(s):  
Greenhouse Gas Emissions ◽  
Greenhouse Gas ◽  
Environmental Performance ◽  
Firm Value ◽  
Stock Exchange ◽  
Secondary Data ◽  
Annual Reports ◽  
Gas Emissions ◽  
Operating Income ◽  
Positive Effect

This study aimed to investigates the effect of greenhouse gas emissions disclosure and environmental performance on firm value. The samples were companies participating in the Performance Rating Assessment Programme on Environment Management (PROPER/Program Penilaian Peringkat Kinerja Perusahaan) of the Ministry of Environment Republic of Indonesia that are listed in the Indonesia Stock Exchange (BEI) 2014-2017 period. The data used were secondary data from annual reports and/or sustainability reports. This study uses moderated regression analysis with panel data processed by using EViews. The results of this research found that greenhouse gas emissions disclosure and environmental performance have a positive effect on firm value. Environmental performance can moderate the relationship between greenhouse gas emissions disclosure and firm value. Debt to equity ratio and net operating income as control variables have a positive effect on firm value, but firm size has a negative effect on firm value. Keywords: Carbon Disclosure; Greenhouse Gas Emissions; Environmental Performance; Firm Value

scholarly journals The relationships between reporting format, environmental disclosure and environmental performance

2017 ◽  
Vol 18 (4) ◽  
pp. 425-444 ◽  
Author(s):  
Abeer Hassan ◽  
Xin Guo
Keyword(s):  
Environmental Performance ◽  
Strategic Communication ◽  
Environmental Information ◽  
Annual Reports ◽  
Equation Modeling ◽  
Legitimacy Theory ◽  
Environmental Disclosure ◽  
Content Type ◽  
New Perspective ◽  
The Relationship

Purpose The purpose of this paper is to assess whether European companies issue standalone environmental reports in an attempt to gain and maintain legitimacy with relevant stakeholders. This is achieved by creating and empirically testing a model of the relationships between corporate reporting format, industry membership, environmental disclosure, and environmental performance. Design/methodology/approach Data are collected from 100 large European companies in carbon and non-carbon-intensive industries. Hypothesis testing is conducted via structure equation modeling. Findings Evidence exists that companies which disclose environmental information in standalone environmental reports tend to provide higher levels of environmental information than companies which combine financial and environmental disclosure in annual reports. The findings support greenwashing as a new perspective of legitimacy theory: companies in carbon-intensive industry use standalone environmental reports to pose as good corporate citizens even when they are not. Research limitations/implications The sample companies are large European companies and this could limit the generalizability of research findings. The authors call for longitudinal studies examining how the relationship between reporting format and environmental disclosure changes. Practical implications This paper suggests that reporting format be considered a proactive, strategic communication-driven activity rather than a decision that managers passively make in response to external scrutiny. Originality/value The paper contributes to the literature by adding to the scarce evidence of the relationship between reporting format and environmental disclosure. Greenwashing as a new perspective of legitimacy theory is used to develop research hypotheses.

A study of the relationships among environmental performance, environmental disclosure, and financial performance

2018 ◽  
Vol 26 (1) ◽  
pp. 107-130 ◽  
Author(s):  
Lucy Wenxiang Lu ◽  
Martin Edward Taylor
Keyword(s):  
Financial Performance ◽  
Environmental Performance ◽  
Negative Relationship ◽  
Simultaneous Equation ◽  
Least Square ◽  
Medium Size ◽  
Environmental Disclosure ◽  
Content Type ◽  
Industry Effect ◽  
Using Data

Purpose The purpose of this paper is to study the relationships among environmental performance (EP), environmental disclosure (ED), and financial performance (FP) (three corporate constructs) using data from Newsweek’s green rankings. Design/methodology/approach Previous studies document mixed results about the relations among the three constructs. A firm’s overall management strategy may affect the three constructs simultaneously; therefore, the interrelationships among EP, ED, and FP were jointly examined. A simultaneous equations approach was used to test the hypothesis. Findings The three-stage least square (3SLS) estimation results show a negative relationship between EP and FP and a positive relationship between EP and ED, suggesting that financially successful firms are less likely good environmental performers but green firms are more likely to disclose their EP. Research limitations/implications Since the sample firms examined in this study are US large-size companies, the results found in this paper may not apply to small- and/or medium-size firms or to companies in other countries. Practical implications Three corporate constructs are jointly correlated with each one. A firm’s overall strategic plan on environmental engagement is likely reflected in how it engages in each of the constructs that affect costs and benefits. Sustainable efforts, in short term, may put firms at risk. Companies may need to take a long-term perspective when cutting costs is curtailed. Originality/value The research contributes to the ED and EP literature by using a 3SLS simultaneous equation method and analyzing a more recent and comprehensive multi-industry data. By controlling industry effect, the research investigates the interrelationships among three corporate constructs and finds interesting results. An interpretation and discussion are provided.

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