Company Growth and Profitability in Corporate Value with Environmental Disclosure as a Moderation in Oil, Gas and Coal Companies

Ika Swasti  Putri; Bambang Sutopo

doi:10.33395/owner.v8i4.2345

Authors

Ika Swasti Putri Universitas Dharma AUB Surakarta, Universitas Sebelas Maret
Bambang Sutopo Universitas Sebelas Maret

DOI:

10.33395/owner.v8i4.2345

Keywords:

Profitability, Company Growth, Company Value, Environmental Disclosure, Oil and Gas Sector.

Abstract

This study examines the relationship between company growth, profitability, and corporate value, focusing on the role of environmental disclosure as a moderation variable in the oil, gas, and coal sectors. Using data from 15 companies listed on the Indonesia Stock Exchange (IDX) during the period 2019-2022, this study applies multiple linear regression analysis to test hypotheses related to the effect of growth and profitability on company value, as well as how environmental disclosures moderate these relationships. The results show that profitability significantly affects the value of the company, confirming that more profitable companies tend to be valued higher in the market. Environmental disclosure also has a significant impact on corporate value, emphasizing the importance of transparency and environmental responsibility. While company growth has no significant relationship with firm value, the interaction between profitability and environmental disclosure to company value is significant, suggesting that the positive effects of environmental disclosure are amplified by firm profitability. These findings offer important insights for stakeholders in making investment decisions and environmentally sound business practices.

Downloads

Download data is not yet available.

Plum-X Analityc

Author Biography

Ika Swasti Putri, Universitas Dharma AUB Surakarta, Universitas Sebelas Maret

References

Ahrends, M., Drobetz, W., & Puhan, T. X. (2016). Cyclicality of Growth Opportunities and the Value of Cash Holdings (SSRN Scholarly Paper 2644749). https://doi.org/10.2139/ssrn.2644749

Artikis, P. G., Diamantopoulou, L., Papanastasopoulos, G. A., & Sorros, J. N. (2022). Asset growth and stock returns in european equity markets: Implications of investment and accounting distortions. Journal of Corporate Finance, 73, 102193. https://doi.org/10.1016/j.jcorpfin.2022.102193

Atasel, O. Y., Guneysu, Y., & Unal, H. (2020). Impact of environmental information disclosure on cost of equity and financial performance in an emerging market: Evidence from Turkey. Ekonomika, 99(2), 76–91. Scopus. https://doi.org/10.15388/EKON.2020.2.5

Cecil, L. (2008). Corporate Social Responsibility Reporting in the United States. McNair Scholars Research Journal. https://www.semanticscholar.org/paper/Corporate-Social-Responsibility-Reporting-in-the-Cecil/df4f03d4844b3b97b75d4de1395bf27fd03a2e42

Cooper, M., Gulen, H., & Ion, M. (2024). The use of asset growth in empirical asset pricing models. Journal of Financial Economics, 151, 103746. https://doi.org/10.1016/j.jfineco.2023.103746

Dierkes, S., & Schäfer, U. (2021). Valuation of firms with multiple business units. Journal of Business Economics, 91(4), 401–432. https://doi.org/10.1007/s11573-020-01010-z

Eugene F. Brigham, J. F. H. (2016). Fundamentals of Financial Management, 8th Edition. Financial Management, 9781305249325.

Fahad, P., & Busru, S. A. (2020). CSR disclosure and firm performance: Evidence from an emerging market. Corporate Governance (Bingley), 21(4), 553–568. Scopus. https://doi.org/10.1108/CG-05-2020-0201

Garcia, D., Janssen, M. C. W., & Shopova, R. (2023). Dynamic Pricing with Uncertain Capacities. Management Science, 69(9), 5275–5297. https://doi.org/10.1287/mnsc.2022.4613

Gerged, A. M., Beddewela, E., & Cowton, C. J. (2021). Is corporate environmental disclosure associated with firm value? A multicountry study of Gulf Cooperation Council firms. Business Strategy and the Environment, 30(1), 185–203. Scopus. https://doi.org/10.1002/bse.2616

Gregory, A., Tharyan, R., & Whittaker, J. (2014). Corporate Social Responsibility and Firm Value: Disaggregating the Effects on Cash Flow, Risk and Growth. Journal of Business Ethics, 124(4), 633–657. https://doi.org/10.1007/s10551-013-1898-5

Khan, A., Muttakin, M. B., & Siddiqui, J. (2013). Corporate Governance and Corporate Social Responsibility Disclosures: Evidence from an Emerging Economy. Journal of Business Ethics, 114(2), 207–223. https://doi.org/10.1007/s10551-012-1336-0

Kong, Y., Donkor, M., Musah, M., Nkyi, J. A., & Ampong, G. O. A. (2023). Capital Structure and Corporates Financial Sustainability: Evidence from Listed Non-Financial Entities in Ghana. Sustainability (Switzerland), 15(5). https://doi.org/10.3390/su15054211

Le, H. N. Q., Nguyen, T. V. H., & Schinckus, C. (2022). The role of strategic interactions in risk-taking behavior: A study from asset growth perspective. International Review of Financial Analysis, 82, 102127. https://doi.org/10.1016/j.irfa.2022.102127

Nuskiya, M. N. F., Ekanayake, A., Beddewela, E., & Meftah Gerged, A. (2021). Determinants of corporate environmental disclosures in Sri Lanka: The role of corporate governance. Journal of Accounting in Emerging Economies, 11(3), 367–394. Scopus. https://doi.org/10.1108/JAEE-02-2020-0028

Perrini, F. (2005). Building a European Portrait of Corporate Social Responsibility Reporting. European Management Journal, 23(6), 611–627. https://doi.org/10.1016/j.emj.2005.10.008

Plumlee, M., Brown, D., Hayes, R. M., & Marshall, R. S. (2015). Voluntary environmental disclosure quality and firm value: Further evidence. Journal of Accounting and Public Policy, 34(4), 336–361. https://doi.org/10.1016/j.jaccpubpol.2015.04.004

Qiu, Y., Shaukat, A., & Tharyan, R. (2016). Environmental and social disclosures: Link with corporate financial performance. The British Accounting Review, 48(1), 102–116. https://doi.org/10.1016/j.bar.2014.10.007

RI, S. D. (n.d.). Pencemaran Lingkungan Akibat Kebocoran Pipa Gas PT Chevron Dipertanyakan. Retrieved February 24, 2024, from http://www.dpr.go.id/berita/detail/id/27271

Spescha, A., & Woerter, M. (2019). Innovation and firm growth over the business cycle. Industry and Innovation, 26(3), 321–347. https://doi.org/10.1080/13662716.2018.1431523

Suchman, M. C. (1995). Managing Legitimacy: Strategic and Institutional Approaches. The Academy of Management Review, 20(3), 571–610. https://doi.org/10.2307/258788

Tarjo, T., Anggono, A., Yuliana, R., Prasetyono, P., Syarif, M., Alkirom Wildan, M., & Syam Kusufi, M. (2022). Corporate social responsibility, financial fraud, and firm’s value in Indonesia and Malaysia. Heliyon, 8(12). https://doi.org/10.1016/j.heliyon.2022.e11907

Valeeva, D. (2023). Perusahaan semakin sering membagikan keuntungan mereka kepada para pemegang saham melalui dividen tunai dan pembelian kembali saham, yang menyoroti pentingnya profitabilitas untuk nilai perusahaan. New Political Economy.

Verbeeten, F. H. M., Gamerschlag, R., & Möller, K. (2016). Are CSR disclosures relevant for investors? Empirical evidence from Germany. Management Decision, 54(6), 1359–1382. Scopus. https://doi.org/10.1108/MD-08-2015-0345

Warga bersihkan Laut Jawa yang tercemar tumpahan minyak dan gas: Warga “Nganggur, rumah perlu biaya hidup.” (n.d.). BBC News Indonesia. Retrieved February 24, 2024, from https://www.bbc.com/indonesia/indonesia-49123606

Zhang, L., & Su, W. (2023). Corporate social responsibility, internal control, and firm financial performance. Frontiers in Psychology, 13(January), 1–19. https://doi.org/10.3389/fpsyg.2022.977996