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Environmental Performance and Firm Value: Testing the Role of Firm Reputation in Emerging Countries

Author

Listed:
  • Khanifah Khanifah

    (Universitas Wahid Hasyim, Jawa Tengah 50232, Indonesia,)

  • Udin Udin

    (Universitas Muhammadiyah Yogyakarta, Yogyakarta, Indonesia,)

  • Nor Hadi

    (IAIN Kudus, Kudus, Jawa Tengah 59322, Indonesia.)

  • Fitri Alfiana

    (Universitas Wahid Hasyim, Jawa Tengah 50232, Indonesia,)

Abstract

This study aims to analyze the empirical evidence about the effect of environmental performance on firm value mediated by firm reputation in emerging countries. The sample of this study is the mining industry sectors listed on the Indonesia Stock Exchange from 2015 to 2018. The data is analyzed using partial least squares based structural equation modeling (PLS-SEM) with WarpPLS 6.0 software. The results show that environmental performance has a positive and significant effect on firm reputation. In contrast to the expectation, environmental performance has a negative and significant effect on firm value. Firm reputation further becomes a significant mediator in the relationship between environmental performance and firm value. These findings recommend for future studies to expand the objects and extend the observation period.

Suggested Citation

  • Khanifah Khanifah & Udin Udin & Nor Hadi & Fitri Alfiana, 2020. "Environmental Performance and Firm Value: Testing the Role of Firm Reputation in Emerging Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 10(1), pages 96-103.
    • Handle: RePEc:eco:journ2:2020-01-14
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    References listed on IDEAS

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    Cited by:

    1. Suripto Suripto & Dedy Hermawan & Putri Irmal Sari & Ahmad Rifai, 2022. "Impact of Green Management and Earning Management of Energy Companies in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 12(3), pages 192-196, May.
    2. Zhu, Danyu & Gao, Xin & Luo, Zijun & Xu, Weidong, 2022. "Environmental performance and corporate risk-taking: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 74(C).
    3. Ricky Y. K. Chan & Jennifer W. M. Lai & Namwoon Kim, 2022. "Strategic motives and performance implications of proactive versus reactive environmental strategies in corporate sustainable development," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2127-2142, July.

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    More about this item

    Keywords

    environmental performance; firm reputation; firm value;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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