Does Eco-Efficiency Improve Financial Performance of Manufacturing Companies in Indonesia?

Abstract

This study aims to determine the impact of environmental performance proxied by eco-efficiency on the financial performance of manufacturing companies in Indonesia. İn this study, the multiple linear regression test was used to analyse the data. The sample of this study is manufacturing companies that listed at the Indonesia Stock Exchange from 2012 until 2016 with the total observation is 80 firm-years.The results of this study indicated that the average level of eco-efficiency of the manufacturing companies is still relatively low (0.38). The environmental performance as measured by the eco-efficiency has a positive significant effect on the financial performance of the companies. Therefore, this study suggests that companies can improve their financial performance by enhancing their eco-efficiency level.This study aims to determine the impact of environmental performance proxied by eco-efficiency on the financial performance of manufacturing companies in Indonesia. İn this study, the multiple linear regression test was used to analyse the data. The sample of this study is manufacturing companies that listed at the Indonesia Stock Exchange from 2012 until 2016 with the total observation is 80 firm-years.The results of this study indicated that the average level of eco-efficiency of the manufacturing companies is still relatively low (0.38). The environmental performance as measured by the eco-efficiency has a positive significant effect on the financial performance of the companies. Therefore, this study suggests that companies can improve their financial performance by enhancing their eco-efficiency level.

Does Good Corporate Governance and Eco–efficiency Really Contribute to Firm Value? An Empirical Study in Indonesian State-Owned Enterprises (Soes)

“…This means that increased efficiency in the field of ecology is effective for improving the firm's financial performance.This shows that H4 which states that the ecoefficiency variable is associated to firm's financial performance is supported.This is in line with the results of research conducted byMeutia et al (2019). Meanwhile, the result for good corporate governance variable shows that there is no relationship between good…”

“…This means that companies that adopt the eco-efficiency concept have a higher firm value and are able to generate profits in the future than companies that do not adopt the eco-efficiency concept. Research conducted by Meutia et al (2019) also found that eco-efficiency has a positive and significant impact on the firm's financial performance. Based on the description above, the hypotheses that can be used are:…”

“…Financial performance is the company's ability to manage and control its resources. In a study conducted by Meutia et al (2019) stated that the accounting-based approach in measuring financial performance that is commonly used is such as profitability, asset returns, asset turnover and growth. The better the company's ability to manage its resources, the better the company's value.…”

“…The eco-efficiency variable is measured using an ISO 14001 environmental management certificate. This measurement refers to the research of Meutia et al (2019).…”

Pengaruh Eco-Efficiency, Green Inovation Dan Carbon Emission Disclosure Terhadap Nilai Perusahaan Dengan Kinerja Lingkungan Sebagai Moderasi

“…Selain itu, eco-efficiency dapat diterapkan sebagai sistem manajemen lingkungan untuk mengelola sumberdaya yang dimiliki (Panggau & Septiani, 2017). Eco-efficiency adalah singkatan dari "ecological economic efficiency" sebuah konstruksi yang menunjukkan peningkatan produktivitas dan secara bersamaan mengurangi biaya dengan peningkatan kinerja lingkungan (Meutia et al, 2019).…”