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

Abstract

This study examined the relationship between good corporate governance (GCG) and eco-efficiency on firm performance and firm value. Good corporate governance were proxied by GCG score, board meeting, and board independent. Eco-efficiency was proxied by the ownership of the environmental management certificate ISO 14001. Firm value was proxied by Tobins’Q value owned the company. Firm’s financial performance was proxied by Return on Assets (ROA) value. This research was motivated by an empirical gap, which there are companies that have corporate governance issues but still have a positive response by the market as indicated by an increasing share price. In addition, there are still differences results from previous studies. The results of this study indicate that eco-efficiency which proxied by the ownership of an ISO 14001 environmental management certificate has a positive and significant relationship with firm’s financial performance (ROA), where ROA has a positive and significant relationship to firm value. However, eco-efficiency does not have a direct relationship with firm value. Meanwhile, good corporate governance has no relationship with firm’s financial performance and firm value.

The Impact of Corporate Governance Quality on Firm Value: A Case Study on Corporate Governance Index of Borsa Istanbul

“…They used the Corporate Social Responsibility Index (CSRI) to represent corporate governance and Tobins'Q to represent firm valueThe period of the study was 2014-2018As a result of the analysis made with the panel regression method, it has been understood that corporate governance and firm characteristics have a positive effect on firm value. Safitri and Nani (2021) tested the effect of corporate governance and eco-efficiency on firm value of firmsThe 2015-2019 period of 18 State Economic Enterprises traded on the Indonesian Stock Exchange was examined. Tobin's Q value is used for firm value and Return on Asset (ROA) is used to represent financial performance.…”

The Moderating Role of Environmental Management Accounting on Firm Value

“…External guarantees provide confidence that information related to environmental management accounting such as the total energy consumption used and the economic value obtained can be accounted for because it has gone through an assessment and evaluation (Harymawan et al, 2019). Supported by research conducted by (Safitri & Nani, 2021) which obtained the results that eco-efficiency had a positive effect on firm value with the ISO 14001 proxy indicating the application of a good environmental management system supported by research (Larojan & Thevaruban, 2011) which obtained results that environmental accounting has a positive effect on firm value. Supported by research results (Zwetsloot et al, 2013) which supports the legitimacy theory that the application of health and safety can increase firm values by reducing health and safety risks for workers, companies as well as for the community and the environment around the factory or workplace as a fulfillment of its legitimacy.…”

Corporate Social Responsibility and Eco-Efficiency: Impact on Firm Value in The Indonesian Manufacturing Sector

“…Putri (2019) also found negative relationship between eco-efficiency and firm value resulted from the implementation of eco-efficiency that potentially can reduce value of the corporation. Safitri and Nani (2021) added that eco-efficiency proxyed with ownership of the environment management with ISO 14001 certification has a favourable and considerable influence on financial performance of the company but has no direct relationship with firm value (Safitri & Nani 2021).…”