How Does Financial Performance Effect Environmental Investment and How Do Foreign Ownership Moderate It?

Abstract

The purpose of this study is to examine whether financial performance affects environmental investment. Furthermore, this study examines whether foreign ownership moderates the financial performance of the environmental investment. This study tries to contribute to the response of mining companies in Indonesia in preserving the environment by investing in the environment. The method used in this study is multiple linear regression. The number of samples of this study is 195, which are mining companies in Indonesia published in 2014-2018. The results of this study indicate that mining companies in Indonesia have a relatively low response in making environmental investments. However, this study indicates that financial performance affects environmental investment and foreign ownership moderates the financial performance of the environmental investment. The implication of this research is the important role of the government to encourage mining companies in Indonesia to invest in the environment.