Role of Size: The Influence of Green Innovation and SDG Disclosure on Corporate Financial Performance

Nadya Larasati Salsabila; Eduard Ary Binsar Naibaho

doi:10.55927/ajabm.v4i4.583

Authors

Nadya Larasati Salsabila Universitas Pelita Harapan
Eduard Ary Binsar Naibaho Universitas Pelita Harapan

DOI:

https://doi.org/10.55927/ajabm.v4i4.583

Keywords:

Green Innovation, SDG Disclosure, Corporate Financial Performance, Firm Size

Abstract

This study seeks to fill a gap in the current literature by empirically investigating the impact of Green Innovation and Sustainable Development Goals (SDG) Disclosure on Corporate Financial Performance (CFP), with Firm Size serving as a moderating variable. The study employed purposive sampling to investigate 80 businesses listed on the Indonesia Stock Exchange (IDX) from 2019 to 2023. The hypotheses were evaluated using multiple linear regression analysis across six distinct models. The results disclose multiple significant insights. Initially, neither green product innovation nor SDG disclosure exhibited a statistically significant effect on firm financial performance. Secondly, business size did not influence the association between green product innovation and green process innovation, on the one hand, and financial performance, on the other. Notably, green process innovation was observed to have an adverse impact on financial performance, indicating either cost burdens or short-term inefficiencies associated with its implementation. Nonetheless, business size positively influenced the association between SDG disclosure and financial success, suggesting that larger enterprises may derive more advantages from sustainability reporting due to enhanced stakeholder visibility and resource accessibility. These findings possess significant practical ramifications.

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