Empirical Examination of Green Industry Strategy through ISO-14001 on Firm Value: Mediating Roles of Profitability and Leverage

Monica Rahardian Ary Helmina · Ibnu Sutomo · Novita Weningtyas Respati

10 citations0/0 files storedInternational Journal of Sustainable Development and Planning

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Environmental Sustainability in Business Corporate Social Responsibility Reporting Quality and Management Systems

Abstract

The research aims to analyze the effect of green industry strategy on firm value by leverage and profitability as a moderating variable.Green strategies are widely seen as being able to direct industries and corporations to increase productivity and competitiveness.In addition, this strategy can help the industry promote economic value.In this study, an empirical examination of the green strategy is assessed from the implementation of ISO-14001 as an important consideration in interpreting green practice in industry.Specifically, the variables used to measure it are using eco-efficiency proxies as independent variables with a dummy with ISO-14001, the dependent variable of firm value with Tobin-Q, and using moderating variables of leverage and profitability with Return on Assets (ROA).Using the purposive sampling method on 74 companies and 222 samples listed on the Jakarta Composite Index (JCI) in 2016-2018, the research results underline the important role of eco-efficiency in promoting firm value.This shows that the implementation and proactiveness of management in the green industry through ISO-14001 is an important consideration for investors and stakeholders and ensures the sustainability of the company in the long term.Practically, recommendations need to be made regarding the role of corporations and sectoral industries in dealing with issues of sustainability, environmental pollution, environmental degradation, and deforestation.This paper proposes an empirical innovation in examining how the adoption of environmental standards by companies can be useful for increasing manufacturing company profitability.This study has limitations on the object of research which only examines the manufacturing industry.Therefore, further studies are expected to investigate the role ISO-14001 in other industries with high environmental risks.

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References

1995Toward a New Conception of the Environment-Competitiveness Relationship 2010Signaling Theory: A Review and Assessment 1995A Natural-Resource-Based View of the Firm 2017Stakeholder Theory: The State of the Art 2009Adopting Proactive Environmental Strategy: The Influence of Stakeholders and Firm Size 2010Green marketing strategies: an examination of stakeholders and the opportunities they present 2010The Economic Value of Corporate Eco-Efficiency 2011A system model for green manufacturing

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