Environmental performance, profitability, asset utilization, debt monitoring and firm value

The growing issue on firm value shows that firm value is not only determined by the firm ability to increase financial profit, but also by the company's concern in maintaining the environmental condition. The industrial development produces waste that pollutes the environment that has potential...

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Bibliographic Details
Published in:IOP conference series. Earth and environmental science 2018-02, Vol.122 (1), p.12137
Main Authors: Bukit, R Br, Haryanto, B, Ginting, P
Format: Article
Language:English
Subjects:
Economics
Environmental conditions
Environmental management
Environmental performance
Environmental testing
Industrial development
Industrial pollution
Monitoring
Multiple regression analysis
Profitability
Stock exchanges
Utilization
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Summary:The growing issue on firm value shows that firm value is not only determined by the firm ability to increase financial profit, but also by the company's concern in maintaining the environmental condition. The industrial development produces waste that pollutes the environment that has potential to serious impact on the next life. In addition to provide financial benefits, companies are increasingly facing pressure to be socially responsible for the survival of the company. However, past findings demonstrate that the effect of environmental performance, profitability, and asset utilization to the firm's value are still unclear. This study aims to test whether environmental performance, firm profitability and asset utilization can effectively enhance firm value in two different conditions: intensive debt monitoring and less intensive debt monitoring. Sample of companies is taken from the list of Indonesia Stock Exchange during the period of 2013 to 2015. Using multiple regression analysis, discloses that: in intensive monitoring, managers tend to have high firm value when company has high environmental performance and or high profitability and high asset utilization. Monitoring system needs to be intensified especially for companies with the above characteristics.
ISSN:1755-1307
1755-1315
DOI:10.1088/1755-1315/122/1/012137