Do Environmental Performance and Environmental Management Have a Direct Effect on Firm Value?

Soedjatmiko SOEDJATMIKO, Bambang TJAHJADI, Noorlailie SOEWARNO

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)


This paper investigates the effect of environmental performance and environmental management on firm value using financial performance as mediation variable. There are still inconsistencies in research on environmental performance and environmental management and their impact on company value. This research used a quantitative approach involving secondary data. The variables used are environmental performance, environmental management, company financial performance, and company value. Multiple regression was used because it allowed the researchers to examine the relationship of each variable contained in the research framework by describing all of the direct effects (non-mediated effects) and the indirect effects of the research variables. The research sample consisted of 144 manufacturing companies listed on the Indonesia Stock Exchange from 2012 to 2017. Statistically, this study found that there was no direct effect that had a significant impact on environmental performance and firm value, and found that there is a significant direct effect of environmental management variables on firm value. Improved environmental management by the company is proven to increase the value of the company directly. This paper found that, not only does an increase in stakeholder trust happen when a company increases its environmental awareness, but there is also an increase in the financial aspects of the company.

Original languageEnglish
Pages (from-to)687-696
Number of pages10
JournalJournal of Asian Finance, Economics and Business
Issue number1
Publication statusPublished - 2021


  • Environmental Management
  • Environmental Performance
  • Financial Performance
  • Firm Value


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