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The Role of Green Innovation in the Effect of Corporate Social Responsibility on Firm Performance

Author

Listed:
  • Maya Novitasari

    (Accounting Department, Universitas PGRI Madiun, Setia Budi 85, Kota Madiun 63118, Indonesia)

  • Zeplin Jiwa Husada Tarigan

    (Master of Management Department, Petra Christian University, Siwalankerto 121-131, Surabaya 60236, Indonesia)

Abstract

Indonesia’s government policy recommends that medium and large companies carry out corporate social responsibility programs. These programs provide sustainability for the company because they can involve community social relations, economic growth, and increasing environmental awareness. This study aimed to test corporate social responsibility on firm performance with green innovation as a mediation. This study used PROPER companies in 2015–2019, which were chosen using a purposive sampling method involving annual reports and financial reports, yielding 253 companies as a sample. Data were obtained from the Indonesia Stock Exchange and tested using STATA. This study indicates that corporate social responsibility can increase green innovation in companies with the stability of environmentally friendly materials, emission reductions for the surrounding community, and saving energy use. Corporate social responsibility has a positive effect on firm performance because the company has maintained the continuity of the process. After all, it has a harmonious relationship with the community. Furthermore, green innovation positively affects firm performance because the company can reduce energy use and utilize environmentally friendly resources. Therefore, green innovation can mediate the influence of corporate social responsibility and firm performance. This research contributes to senior managers who are part of their company’s top management to understand the critical role of corporate social responsibility in maintaining the company’s sustainability by paying attention to the part of the company’s environment and implementing government regulations. Corporate social responsibility can maintain good stakeholder relations and increase green innovation and firm performance. Theoretical contributions can enrich research related to the context of sustainable performance.

Suggested Citation

  • Maya Novitasari & Zeplin Jiwa Husada Tarigan, 2022. "The Role of Green Innovation in the Effect of Corporate Social Responsibility on Firm Performance," Economies, MDPI, vol. 10(5), pages 1-19, May.
    • Handle: RePEc:gam:jecomi:v:10:y:2022:i:5:p:117-:d:817329
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    References listed on IDEAS

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    Cited by:

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    2. Li, Houjian & Cheng, Quanfeixue & Su, Mengying & Zhang, Kuan, 2025. "Empowering ESG: The pivotal influence of directors' and officers' liability insurance on corporate sustainability," International Review of Economics & Finance, Elsevier, vol. 101(C).
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    5. Leojan G. Datahan & Angeline Medallo & Erika Mae Colis & Jericho Lebrilla & Gerald Alcaria & Devan Joy Rola & April D. Mahomoc & Alkhaser V. Sappayani, 2025. "The Level of Awareness on Vision, Mission and Goals Among 4th Year Students at Toril, Davao City," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(5), pages 3899-3911, May.
    6. Nian Zhang & Logaiswari Indiran & Zuraidah Sulaiman & Maria Anityasari, 2025. "Factors Influencing CSR in the Practice of “Zero-Waste City†and Its Impact on Eco-Innovation and Environmental Performance," SAGE Open, , vol. 15(3), pages 21582440251, August.
    7. Hasan Emin Gurler, 2026. "The impact of corporate social responsibility on green innovation: do industry, data type and region matter? a meta-analysis research," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 28(3), pages 7595-7621, March.
    8. Xi, Kang & Shao, Xuefeng, 2025. "Impact of AI applications on corporate green innovation," International Review of Economics & Finance, Elsevier, vol. 99(C).

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