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The role of sales and investment on the environmental performance of publicly listed firms in Indonesia

Author

Listed:
  • Hadi Ismanto
  • Atmaji Atmaji
  • Endang Suhari
  • Tastaftiyan Risfandy

Abstract

This paper examines the impact of sales and investment on the environmental performance of a firm listed in the Indonesian stock market. A deeper analysis is also conducted to examine operational efficiency as a moderator in this relationship. To investigate this issue, we use data collected from 133 publicly listed firms in Indonesia from 2015 to 2021. Using ordered probit analysis, our findings indicate that sales and investments of a firm, proxied by capital expenditures, have a positive impact on environmental performance. It implies that firms with high sales and allocate more of their funds to acquire fixed assets have more incentive to enhance their long-term profits through environmental initiatives. Furthermore, this paper also demonstrates that operational efficiency serves as a good moderator to strengthen the impact of sales and investments on a company's environmental performance. Overall, the paper suggests that Indonesian firms should accelerate their business practices not only for accounting and market performance but also for environmental performance.

Suggested Citation

  • Hadi Ismanto & Atmaji Atmaji & Endang Suhari & Tastaftiyan Risfandy, 2025. "The role of sales and investment on the environmental performance of publicly listed firms in Indonesia," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 21(2), pages 115-139.
    • Handle: RePEc:ids:ijtrgm:v:21:y:2025:i:2:p:115-139
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