Green innovation on firm value with financial performance as mediating variable: Evidence of the mining industry

Abstract

The topic of environmental performance is gaining much attention from academics and politics when it is associated with each country’s policies regarding environmental problems. Unfortunately, the comprehensive studies to observe this case become rare, therefore this study is aimed to investigate the direct and indirect effect of green innovation on firm value based on financial performance as the mediating variable. Mining companies which participate in Corporate Performance Rating Assessment (PROPER) listed in the Indonesia Stock Exchange during the year of 2012–2018 were used as the samples. The financial performance was measured by return on assets (ROA) and the firm value were measured by Tobin’s Q. The results showed that green innovation had a positive effect on firm value. Financial performance has a positive effect on firm value and financial performance mediates the effect of green innovation on firm value. The green innovation could increase the mining company value. This increase is mediated by financial performance. This present study has been conducted to reveal the direct and indirect effect of green innovation and firm value, financial performance, and firm value comprehensively in which never been done before.

The Emergence of Green Management and Sustainability Performance for Sustainable Business at Small Medium Enterprises (SMEs) in the Culinary Sector in Indonesia

“…Organizations must develop a green innovation strategy embodied in a green organizational entity to obtain environmental and organizational legitimization and improve innovation performance [23]. Therefore, SMEs often need a more comprehensive view of the future path of innovation and are likely to address green issues appropriately [27,34,35].…”

The relationship between green innovation and sustainable growth in Korean companies: Moderated mediation effect of ESG score by industry

“…2.1.2 | Studies on the positive impact of green innovation, including mediating variable Fernando et al (2019) showed that green innovation has a strong influence on sustainable performance mediated by service innovation capabilities. Khusnah et al (2021), Asni and Agustia (2022), and Yuniarti et al (2022) found that financial performance mediates the impact of green innovation on firm value. Zheng et al (2022) found that green innovation can significantly improve the ESG performance, both green innovation and ESG performance can improve the financial performances, and ESG performance plays an indirect mediating role in promoting green innovation on financial performance.…”

“…Fernando et al (2019) showed that green innovation has a strong influence on sustainable performance mediated by service innovation capabilities . Khusnah et al (2021), Asni and Agustia (2022), and Yuniarti et al (2022) found that financial performance mediates the impact of green innovation on firm value .…”

The Role of Environmental Management Accounting in Mediating Green Innovation to Firm Value: Moderated by Quality Management

“…And applied to the entire business process (Mariyamah and Handayani, 2020;Dewi and Rahmianingsih, 2020). Even though there is no guarantee of certainty regarding the results obtained, the many benefits of innovation that can be obtained will be far more valuable than the costs incurred (Agustia et al, 2019), so that investor interest will focus on the company because they believe that the company is focused on environmental sustainability in the future (Yuniarti et al, 2022). However, creating environmentally friendly innovation is not an easy job, to make it happen requires quite a lot of money and companies need accurate, detailed and relevant information so EMA needs to be implemented.…”

“…Referring to research conducted by Yuniarti et al (2022) which suggests using different measurements of green innovation, this research applies measurements carried out by Agustia et al (2019), Damas and Tarisa (2022) using the Green Innovation Checklist The index and object carried out are by using a manufacturing company. This is because according to environmental problems it is mainly caused by manufacturing companies and because manufacturing has a big impact on sustainable and environmentally friendly economic growth (Lin, H, Zeng 2017).…”