Green innovation and corporate value: The mediating role of financial performance and the moderating role of green accounting

Research aims: This study examines the impact of green innovation and green accounting on financial and environmental performance, with green intellectual capital (GIC) as a moderating variable.Design/Methodology/Approach: The analysis is based on 188 firm-year observations from companies listed on the Indonesia Stock Exchange (2020–2023), selected through purposive sampling. Panel data moderated regression analysis is employed.Research findings: Green process innovation does not significantly affect financial performance but improves environmental performance. Green product innovation negatively impacts financial performance yet positively influences environmental outcomes. Green accounting enhances financial performance but shows no effect on the environment. GIC strengthens the positive effect of green product innovation and green accounting on environmental performance, and also reinforces the link between green product innovation and financial performance. However, GIC does not moderate the effects of green process innovation or green accounting on financial performance.Theoretical Contribution/ Originality: The study offers novel insights into the role of GIC as a strategic intangible asset that enhances the effectiveness of green innovation and accounting practices, thereby bridging a gap in the environmental accounting and sustainability literature, particularly within emerging markets such as Indonesia.Practitioner/Policy implication: Findings underscore the importance of integrating GIC into corporate sustainability strategies and call for stronger collaboration between policymakers and business leaders to support green initiatives without compromising economic performance.Research limitation/Implication: The use of purposive sampling may limit the generalizability of the findings to the broader population of listed firms.

This study examines the influence of green intellectual capital, green accounting, and green innovation on firm value and return on assets. Green intellectual capital refers to the knowledge and expertise of environmental sustainability, green accounting involves incorporating environmental costs into financial reporting, and green innovation focuses on developing environmentally friendly technologies and processes. Indicators for evaluating these factors include the Green Intellectual Capital Index, Global Reporting Index disclosures for green accounting, and green process and product innovation dimensions for green innovation. The study employs Warp PLS to analyze data from 88 companies listed on the Sustainable and Responsible Investment (SRI-KEHATI) index on the Indonesia Stock Exchange. The findings indicate that green accounting significantly enhances firm value, while green innovation does not show a direct impact. However, all three factors positively influence return on asset (ROA). The moderating role of ROA was found to strengthen the relationship between green intellectual capital and green accounting with firm value, but it did not moderate the effect of green innovation. ROA was used as an indirect financial indicator to formulate the company’s profitability and strategic sustainability planning. These results highlight the importance of embedding sustainability into business strategies to enhance financial and environmental performance.

The purpose of this study is to investigate the effect of the publication of carbon emissions, COVID-19, and green innovation on financial overall performance and their impact on firm value. The population utilized here are Indonesian companies registered at the Indonesia Stock Exchange from 2015 to 2021 acquired from forty-eight organizations as a sample using purposive sampling. Path analysis is used as the analysis method. This study found that the publication of carbon emissions had no enormous impact on financial performance, while COVID-19 had a full-size negative impact on financial overall performance and green inno­vation had a substantial-higher-quality impact on financial performance. Meanwhile, COVID-19 has an extensive negative impact on firm value, financial performance has a substantial effect on firm value, and disclosure of carbon emissions and green innovation has no massive effect on firm value. Similarly, financial performance cannot seriously mediate the effect of carbon emission disclosure on firm value. However, financial performance was capable of noticeably mediating the bad effect of COVID-19 on firm value and the big high effect of green innovation on firm value.

In this study the complex relationships between sustainability practices and green innovation in Indian manufacturing firms, focusing on quality management, green process innovation, and green product innovation are examined. The aim of the study was to investigate the impact of green technological advancements and quality management on the financial performance and investor-perceived value of manufacturing firms. The green process and green product innovations implication on financial performance and investor perception was also explored. With the help of Pearson correlation and regression analyses, the study assessed the impact of quality management and green innovations on financial performance and investor perception. The findings revealed a significant positive correlation between green product innovation and investor perception, endorsing environmentally responsible companies to attract higher investments and improve financial prospects. However, no significant positive correlation was found between green process innovation and financial performance, which may be influenced by upfront costs and delayed benefits. Green process innovation moderates the relationship between quality management and investor perception, while green product innovation mediates the relationship between green process innovation and investor perception. These insights highlight the importance of prioritising green product innovation to enhance investor perception and integrate environmental considerations into quality management. The study's results align with Sustainable Development Goal 9, promoting sustainable industrialisation, innovation, and infrastructure in the Indian manufacturing industry, fostering a more resilient and environmentally responsible sector.

Green process innovation and financial performance: The role of green social capital and customers’ tacit green needs

Global warming is currently an issue that is widely discussed of both the accounting literature and others. The topic of environmental performance is gaining increasing attention from academics and politics when it is associated with each country’s policies regarding environmental damage. Purpose: This article to investigate both the direct and indirect the effect of green innovation and firm value on financial performance as mediating variable Design/methodology/approach: The samples in this study are applied using purposive sampling ad obtained total sample of PROPER participating companies listed in Indonesia Stock Exchange during the year of 2012-2018. The data used in this study are secondary data obtained from annual report. Companies are listed on the Indonesia Stock Exchange in mining industry in 2012-2018. The variable green innovation was measured by using PROPER, the financial performance was measured by ROA and the firm value were measured by Tobin’s Q. Data processing uses SEM-PLS with WarpPLS 6.0 with the consideration that SEM-PLS is a reliable tool for testing predictive models. Several studies using capital market data in Indonesia have found data with abnormal distribution, so data using PLS is appropriate. Result of the study: The authors find that the green innovation has a positive effect on the firm value and financial performance full mediate the effect green innovation and firm value. Research limitations: this article only examines green innovation using the PROPER measure while the green innovation measure is thought to be related to company value such as ISO 14001, content analysis is not discussed at all in this article and the research sample is limited to mining companies. This scope may not be able to describe the overall conditions in Indonesia. Originality/value: This study comprehensively examines both direct and indirect effect of green innovation with financial performance and firm value, which is rarely examined in extant studies.

Green innovation and corporate financial performance: Insights from operating risks

The topic of environmental performance is gaining much attention from academics and politics when it is associated with each country’s policies regarding environmental problems. Unfortunately, the comprehensive studies to observe this case become rare, therefore this study is aimed to investigate the direct and indirect effect of green innovation on firm value based on financial performance as the mediating variable. Mining companies which participate in Corporate Performance Rating Assessment (PROPER) listed in the Indonesia Stock Exchange during the year of 2012–2018 were used as the samples. The financial performance was measured by return on assets (ROA) and the firm value were measured by Tobin’s Q. The results showed that green innovation had a positive effect on firm value. Financial performance has a positive effect on firm value and financial performance mediates the effect of green innovation on firm value. The green innovation could increase the mining company value. This increase is mediated by financial performance. This present study has been conducted to reveal the direct and indirect effect of green innovation and firm value, financial performance, and firm value comprehensively in which never been done before.

Analyses in the fields of environmental and innovation research have hindered our understanding of the real effects of external drivers of firms' green innovation and sustainability behaviors on financial performance. This study compares the ways in which two different external factors drive firms to be green innovative: environmental regulation and market turbulence. By dividing green innovation into green process innovation and green product innovation, we propose that environmental regulation increases financial performance mainly through green process innovation rather than through green product innovation, and market turbulence affects financial performance mainly through green product innovation rather than through green process innovation. The results of an empirical analysis based on a mediation model and panel data on 472 Chinese listed firms for 2006–2017 lend support to our hypotheses. Our study contributes to the green innovation management and sustainability literature by offering a holistic framework for examining how firms pursue green innovation and sustainability in response to two different forms of external pressure.

The research method uses a quantitative approach with secondary data from annual reports and sustainability reports. The research population is companies in food and beverage listed on the IDX and PROPER for the 2021-2023 period. The research sample consisted of 9 companies with a total of 27 observations over three years. The data analysis technique used Structural Equation Modeling with Partial Least Square (PLS-SEM) version 2.0 M3 to test 18 research hypotheses. The results of the study showed that green intellectual capital does not have a significant effect on firm value, financial performance, and environmental performance. Green Innovation Significant effect on firm value, but no significant effect on financial performance and environmental performance. Corporate social responsibility has a significant effect on financial performance, environmental performance, and firm value. Financial performance has a significant effect on firm value, while environmental performance does not have a significant effect on financial performance and firm value. The results of the mediation test indicate that financial performance and environmental performance are not proven to be mediating variables in the relationship between independent variables and firm value. This study contributes to the literature on green business practices and corporate value in the context of the Indonesian food and beverage industry.

<abstract> <p>Green innovation is the creation of new and competitive products, services, processes, procedures and systems designed to use natural resources at a minimum level and to provide better quality of life on behalf of all that respects sustainability of the nature and of the future generations. The study objective was to examine the relationship between green innovation and financial performance. The study used an explanatory research design and a quantitative research approach to achieve the study's objective. Secondary time series data collected quarterly during the study period (2014–2020) was utilized to run the regression model. Autoregressive moving average (ARIMA) was used to forecast the growing level of green financial innovation transactions, and autoregressive distributed lag model (ARDL) was used to examine the effect of green financial innovation transactions on financial performance. According to forecasted results, on average green financial innovation transaction is expected to grow by 11 percent each quarter, and its impact on financial performance is found positive and significant in the short run. However, the long-run estimation of ARDL shows the positive and insignificant effect of green financial innovation on financial performance. Based on the study's findings, we recommend that the banking sector focuses on adopting green financial innovations to improve financial performance by taking into account both the short-run and long-run benefits of the products. At the same time, we suggest that the sector focus on those green financial innovations which have the lowest adoption and development costs compared to others since the long-run effect affects the overall financial performance of the sector. The main contribution of this study is to provide future indication on the relationship between the two variables in order to provide proper decision making in a bid to make green innovation investment.</p> </abstract>

Effective green accounting practices can improve a company's image in the eyes of consumers and investors, which in turn can influence company value. Additionally, positive perceptions of firm value can result in lower costs of capital and better access to financial resources, which can ultimately strengthen financial performance. This research aims to determine the effect of the integration of green accounting and firm value on financial performance. This research analyzes manufacturing companies listed on the Indonesia Stock Exchange in 2021-2023. The type of research used is quantitative research. The data used is secondary data from the company's annual report. The sample in this research was 35 manufacturing companies listed on the Indonesia Stock Exchange consecutively in 2021-2023. The sampling technique in this research used purposive sampling. The data analysis technique used is path analysis using the eviews 10 program. The research results show that green accounting has no effect on financial performance, firm value has a positive effect on financial performance, and green accounting and firm value have a positive effect on financial performance. Therefore, by integrating green accounting and corporate value in financial performance analysis, companies can gain a more holistic understanding of their environmental impact, investor perceptions, and overall financial health. This can help them identify opportunities to increase efficiency, minimize environmental risks and create long-term, sustainable value for all stakeholders.

The Purpose of this research is to examine the impact of Green Innovation, Environmental Management Systems (EMS), and Research & Development (R&D) on Firm Value, with Corporate Financial Performance as a moderating factor. Green Innovation is assessed using 12 specific innovation disclosure items, while EMS is measured by the ISO-14001 certification. Firm value, the dependent variable, is quantified by the price-to-book value (PBV) ratio. Additionally, this research includes price-to-book value and corporate financial performance as control variables to provide a clearer understanding of their influence. The sample for this study consists of coal companies listed on the Indonesia Stock Exchange (IDX) from 2020 to 2023, with a total of 26 companies selected using a purposive sampling method. This technique ensures that the sample aligns with specific criteria relevant to the research objectives. The observational data gathered over this period are analyzed using partial least squares (PLS), a statistical method commonly used for analyzing complex relationships between variables.The results indicate that both green innovation and research & development do not significantly influence firm value, suggesting that these factors alone may not drive immediate changes in market perceptions or financial metrics like price-to-book value. However, the environmental management system (EMS) does have a significant positive effect on firm value. Interestingly, EMS does not moderate the relationship between green innovation, research & development, and firm value, meaning it does not enhance the impact of these variables on firm value. From a theoretical standpoint, while actions aimed at improving environmental sustainability, such as pollution prevention and sustainable development, may contribute to a company’s long-term competitive advantage, they may not always be reflected in short-term financial measures like price-to-book value. This highlights the complexity of linking sustainable practices to firm value.

This study empirically examines whether green innovation moderates the relationship between Green Accounting, Quality Management, and Financial Performance. This research is a causal descriptive quantitative research on traditional banking companies listed on the Indonesia Stock Exchange (IDX). This survey data is secondary data from the 2018-2021 Financial and Sustainability Reports of banking companies listed on the Indonesia Stock Exchange. It consists of three independent variables. Green accounting, Quality Management, and Green Innovation. The dependent variable is Financial Performance. The results show that Green Accounting affects Financial Performance, but Quality Management does not, whereas Green innovation moderates the relationship between Green Accounting and Financial Performance and between Quality Management and Financial Performance.

This research aims to test whether profitability strengthens the influence of eco innovation and eco efficiency disclosures on the value of mining sector companies listed on the Indonesia Stock Exchange. Research data was obtained from annual reports and sustainability reports from the Indonesian Stock Exchange website and company websites. The sample used was 39 companies that met the criteria and were listed on the Indonesia Stock Exchange in 2018 – 2021. The sample data calculation technique used the cross sectional method via the eviews application. Hypothesis testing in this research uses multiple linear regression analysis methods. The results of this research show that eco innovation and eco efficiency have a positive effect on firm value, and profitability has an effect as a moderating predictor variable in the relationship between eco innovation and eco efficiency on firm value. This study differentiates samples based on more diverse dependent variables and involves moderating variables as amplifiers. Previous research did not use the two dependent variables, namely eco innovation and eco efficiency simultaneously so that the value of the company could not be determined as a whole whether the implementation of both had an effect on the value of the company. Then the researchers found that investors considered the application of eco innovation and eco efficiency to the value of mining sector companies.