Sustainability Environmental Performance Future Investment for Company Value

Sustainability Environmental Performance Future Investment for Company Value

March 2024 | Agus Dwianto, Diana Puspitasari, Annisa Qurrota A'yun, Ardiani Ika Sulistyawati, and Ade Pugara
This study investigates the financial dynamics of 182 manufacturing companies listed on the Indonesia Stock Exchange from 2019 to 2022, focusing on the impact of environmental performance on firm value. Using a quantitative approach with SPSS for regression analysis, the research reveals that while capital structure and dividend policy do not significantly affect firm value, firm growth, profitability, and investment decisions have differential impacts. Environmental performance moderates the effect of growth and profitability on firm value but does not significantly influence relationships involving capital structure, dividend policy, or investment decisions. The study highlights the importance of sustainable practices in improving financial performance and firm value, especially during global crises like the COVID-19 pandemic. It contributes to financial analysis by incorporating environmental performance as a moderating factor. The findings suggest that environmental performance plays a crucial role in shaping firm value, particularly in the context of economic and environmental challenges. The research also emphasizes the need for companies to integrate environmental considerations into their decision-making processes to enhance long-term value creation. The study provides insights into how companies can improve their value by considering both financial and environmental factors in their strategies. The results indicate that firm growth has a positive impact on firm value, while profitability and investment decisions have mixed effects. Environmental performance is found to moderate the relationship between firm growth and profitability and firm value. The study underscores the importance of sustainable practices in corporate finance and the need for companies to adapt to environmental challenges. The research also highlights the significance of environmental performance in corporate decision-making and its potential to influence firm value. The study contributes to the understanding of how environmental factors interact with financial variables to affect firm value. The findings suggest that companies should prioritize sustainable practices to enhance their financial performance and long-term value. The research provides a comprehensive analysis of the relationship between environmental performance and firm value, emphasizing the role of sustainability in corporate finance. The study concludes that while financial variables such as capital structure and dividend policy do not significantly affect firm value, environmental performance plays a critical role in shaping firm value, particularly in the context of global crises. The research highlights the importance of integrating environmental considerations into corporate strategies to achieve sustainable growth and value creation.This study investigates the financial dynamics of 182 manufacturing companies listed on the Indonesia Stock Exchange from 2019 to 2022, focusing on the impact of environmental performance on firm value. Using a quantitative approach with SPSS for regression analysis, the research reveals that while capital structure and dividend policy do not significantly affect firm value, firm growth, profitability, and investment decisions have differential impacts. Environmental performance moderates the effect of growth and profitability on firm value but does not significantly influence relationships involving capital structure, dividend policy, or investment decisions. The study highlights the importance of sustainable practices in improving financial performance and firm value, especially during global crises like the COVID-19 pandemic. It contributes to financial analysis by incorporating environmental performance as a moderating factor. The findings suggest that environmental performance plays a crucial role in shaping firm value, particularly in the context of economic and environmental challenges. The research also emphasizes the need for companies to integrate environmental considerations into their decision-making processes to enhance long-term value creation. The study provides insights into how companies can improve their value by considering both financial and environmental factors in their strategies. The results indicate that firm growth has a positive impact on firm value, while profitability and investment decisions have mixed effects. Environmental performance is found to moderate the relationship between firm growth and profitability and firm value. The study underscores the importance of sustainable practices in corporate finance and the need for companies to adapt to environmental challenges. The research also highlights the significance of environmental performance in corporate decision-making and its potential to influence firm value. The study contributes to the understanding of how environmental factors interact with financial variables to affect firm value. The findings suggest that companies should prioritize sustainable practices to enhance their financial performance and long-term value. The research provides a comprehensive analysis of the relationship between environmental performance and firm value, emphasizing the role of sustainability in corporate finance. The study concludes that while financial variables such as capital structure and dividend policy do not significantly affect firm value, environmental performance plays a critical role in shaping firm value, particularly in the context of global crises. The research highlights the importance of integrating environmental considerations into corporate strategies to achieve sustainable growth and value creation.
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[slides and audio] Sustainability Environmental Performance Future Investment for Company Value