To read this content please select one of the options below:

The mediating role of financial performance in the relationship between green innovation and firm value: evidence from ASEAN countries

Nur Asni (Department of Accounting, Faculty of Economics and Business, Universitas Airlangga, Surabaya, Indonesia) (Department of Accounting, Universitas Halu Oleo, Kendari, Indonesia)
Dian Agustia (Department of Accounting, Faculty of Economics and Business, Universitas Airlangga, Surabaya, Indonesia)

European Journal of Innovation Management

ISSN: 1460-1060

Article publication date: 11 June 2021

Issue publication date: 1 December 2022

936

Abstract

Purpose

The purpose of this paper is to investigate the mediating role of financial performance (FP) in modelling the relationship between green innovation (GI) and firm value (FV), using ASEAN countries as sample with panel analysis.

Design/methodology/approach

A panel data was collected from 374 publicly traded companies in six ASEAN countries, and was analysed using feasible general least squares (FGLS) to control heteroscedasticity and serial correlation.

Findings

The findings suggest that financial performance, namely return on assets (ROA) and return on equity (ROE), has a significant value in mediating the relationship between GI and FV. This illustrates that investors in the ASEAN region's capital market are more interested in the economic motivation for companies implementing GI. Other findings also provide evidence that ROA and ROE have positive and significant effects on FV. This indicates that the profitability resulting from a firm's ability to continuously innovate has a positive impact on the creation of value by manufacturing companies in the ASEAN region.

Research limitations/implications

The number of observations is still relatively limited, from manufacturing companies listed on stock exchanges in the ASEAN countries. The total number of samples used in this study was 374 companies with 22.30% of the total population.

Originality/value

This study combines the different types of secondary data to provide panel evidence on the mediating effect of financial performance using ROA and ROE in the relationship between green innovation and firm value, using ASEAN countries as the sample.

Keywords

Citation

Asni, N. and Agustia, D. (2022), "The mediating role of financial performance in the relationship between green innovation and firm value: evidence from ASEAN countries", European Journal of Innovation Management, Vol. 25 No. 5, pp. 1328-1347. https://doi.org/10.1108/EJIM-11-2020-0459

Publisher

:

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

Related articles