Environmental performance, profitability, asset utilization, debt monitoring and firm value

Abstract

The growing issue on firm value shows that firm value is not only determined by the firm ability to increase financial profit, but also by the company's concern in maintaining the environmental condition. The industrial development produces waste that pollutes the environment that has potential to serious impact on the next life. In addition to provide financial benefits, companies are increasingly facing pressure to be socially responsible for the survival of the company. However, past findings demonstrate that the effect of environmental performance, profitability, and asset utilization to the firm’s value are still unclear. This study aims to test whether environmental performance, firm profitability and asset utilization can effectively enhance firm value in two different conditions: intensive debt monitoring and less intensive debt monitoring. Sample of companies is taken from the list of Indonesia Stock Exchange during the period of 2013 to 2015. Using multiple regression analysis, discloses that: in intensive monitoring, managers tend to have high firm value when company has high environmental performance and or high profitability and high asset utilization. Monitoring system needs to be intensified especially for companies with the above characteristics.

Profitability and Firm Value: Does Dividend Policy Matter for Indonesian Sustainable and Responsible Investment (SRI)-KEHATI Listed Firms?

“…Since its introduction, studies have examined the role of profitability in firm value and investigated this relationship in various sample settings (Chen and Chen 2011;Liow 2010). The literature review in this study revealed conflicting findings of the relationship between profitability and firm value, as documented in (Handoko 2017;Hirdinis 2019;Harahap et al 2020;Ardila et al 2018;Bukit et al 2018;Endri and Fathony 2020). We attempt to examine whether the mixed results for the profitability-firm value relationship can be explained by the dividend policy.…”

“…Another study examined the relationship between profitability and firm valuation using data from the Indonesian capital market, and the authors of Chune et al (2018); Cleary (1999); Harahap et al (2020); Ardila et al (2018); Bukit et al (2018); Sutopo and Hananto (2019) proved there was positive evidence of this relationship. For instance, in Ardila et al (2018), whether state ownership enterprises (SOEs) outperform non-SOEs was investigated using a sample of 297 observations from 2012 to 2016.…”

“…They suggested that the indifferent outcome between SOEs and non-SOEs is because SOE companies use cost or expense inefficiently, and there may be some manipulating behavior in SOE companies. The authors of Bukit et al (2018) investigated whether environmental performance, business profitability, and asset utilization may increase firm value in intense and less-intensive debt monitoring. They found that in intensive monitoring, managers tend to have high firm value when a company has high environmental performance or high profitability and high asset utilization.…”

Pengaruh Ukuran Perusahaan, Leverage, Profitabilitas Dan Likuiditas Terhadap NILAI Perusahaan Dengan Kebijakan Dividen Sebagai Variabel Moderasi Pada Perusahaan Industri Barang Konsumsi Yang Terdaftar Di BEI Periode 2007-2018

“…Tobin'S Q melihat prospek perusahaan dimasa yang akan datang, indikator ini sangat penting diperhatikan untuk mengetahui seberapa besar return yang dapat diterima oleh investor atas investasi yang dilakukannya. Penelitian Bukit et al (2018) menyatakan profitabilitas berpengaruh positif dan signifikan terhadap nilai perusahaan. Sedangkan penelitian yang dilakukan oleh Hirdinis (2019) menyatakan bahwa profitabilitas berpengaruh tidak signifikan terhadap nilai perusahaan.…”

Tanggung Jawab Sosial Dan Risiko Sistematis: Efek Moderasi Dari Fleksibilitas Keuangan Dan Investasi Penelitian Dan Pengembangan

“…Tanggung jawab sosial tidak hanya dapat meningkatkan manajemen risiko namun juga memberikan perlindungan kekayaan. Kinerja lingkungan yang tinggi dapat memungkinkan mengurangi risiko perusahaan (Bukit et al, 2018;Muhammad et al, 2015). Cai et al (2016) menjelaskan bahwa kinerja lingkungan yang baik dapat membawakan berbagai manfaat kepada masyarakat dan perusahaan.…”