PENGARUH GREEN INNOVATION DAN MARKET CAPITALIZATION TERHADAP SUSTAINABILITY PERFORMANCE

Agnes Kristina Gosal, Etty Murwaningsari

Abstract


This study aims to investigate (1) the influence of Green Innovation (GI) on Sustainability Performance (SP) and (2) the effect of Market Capitalization (MC) on Sustainability Performance (SP). The increasing prominence of environmental issues and the growing expectations for corporate sustainability have compelled organizations to integrate sustainable practices into their business operations to enhance stakeholder value. Sustainability performance may be shaped by a variety of determinants originating from both internal and external organizational environments. Green Innovation represents a firm's commitment to implementing environmentally responsible initiatives through the development of eco-friendly products, production processes, and business practices. In contrast, Market Capitalization serves as an indicator of a company's market valuation and reflects investors’ perceptions and confidence regarding the firm's future prospects.This research adopts a quantitative approach utilizing secondary data collected from the annual reports and sustainability reports of companies operating in the basic materials and consumer non-cyclicals sectors listed on the Indonesia Stock Exchange (IDX) throughout the 2022–2024 period. The proposed hypotheses are tested using panel data regression analysis to evaluate the relationship between the independent variables and Sustainability Performance.Drawing upon Stakeholder Theory and Legitimacy Theory, this study posits that both Green Innovation and Market Capitalization contribute positively to corporate Sustainability Performance. The empirical findings reveal that Green Innovation exerts a positive and statistically significant impact on Sustainability Performance. Conversely, although Market Capitalization demonstrates a positive association with Sustainability Performance, its effect is not found to be statistically significant.

Keywords


Sustainability Performance, Green Innovation, Market Cap , Firm Age.

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DOI: https://doi.org/10.32509/jmb.v6i2.7564

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