Open AccessEnvironmental Performance and Firm Value: Testing the Role of Firm Reputation
Author(s) -
Khanifah Khanifah,
Jaka Isgiyarta,
Alfiana Fitri,
Udin Udin
Publication year - 2019
Publication title -
international journal of financial research
Language(s) - English
Resource type - Journals
eISSN - 1923-4031
pISSN - 1923-4023
DOI - 10.5430/ijfr.v11n1p137
Subject(s) - reputation , structural equation modeling , sample (material) , value (mathematics) , enterprise value , business , stock exchange , partial least squares regression , empirical evidence , econometrics , industrial organization , accounting , economics , statistics , mathematics , social science , philosophy , chemistry , finance , chromatography , epistemology , sociology
This study aims to analyze the empirical evidence about the effect of environmental performance on firm value mediated by firm reputation. The sample of this study is the mining industry sectors listed on the Indonesia Stock Exchange from 2015 to 2018. The data is analyzed using partial least squares based structural equation modeling (PLS-SEM) with WarpPLS 6.0 software. The results show that environmental performance has a positive and significant effect on firm reputation. In contrast to the expectation, environmental performance has a negative and significant effect on firm value. Firm reputation further becomes a significant mediator in the relationship between environmental performance and firm value. These findings recommend for future studies to expand the objects and extend the observation period.