Article Sidebar

Download
PDF
Statistic
Read Counter : 59 Download : 31

Downloads

Download data is not yet available.

Main Article Content

Abstract

This study examines the effect of green innovation on firm value and investigates whether CEO founders moderate this relationship. Using purposive sampling, the study analyzes 1,730 firm-year observations from 346 non-financial firms listed on the Indonesia Stock Exchange (IDX) during the 2019–2023 period. Generalized least squares (GLS) regression is employed as the primary estimation method to address heteroscedasticity and autocorrelation issues. To ensure the robustness of the findings, fixed-effects panel regression and generalized method of moments (GMM) estimations are conducted to control for unobserved heterogeneity, endogeneity, and potential reverse causality. The GLS and fixed-effects results indicate that green innovation is positively associated with firm value. However, the relationship becomes insignificant in the GMM estimations, suggesting that the positive association may be sensitive to endogeneity concerns. Furthermore, CEO founders do not significantly moderate the relationship between green innovation and firm value across all model specifications. These findings provide mixed evidence regarding the value implications of green innovation and highlight the importance of addressing endogeneity when examining the economic consequences of corporate sustainability initiatives. By investigating the moderating role of CEO founders in the green innovation–firm value relationship within an emerging market context, this study extends the corporate sustainability and upper echelons literature. The findings also suggest that firms should carefully evaluate the economic outcomes of green innovation initiatives while considering their broader strategic and sustainability objectives.

Keywords

CEO Founder firm value Green Innovation Resource-Based View Upper Echelon Theory

Article Details

License

Copyright (c) 2026 Jurnal Akuntansi dan Auditing Indonesia

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Authors who publish with this journal agree to the following terms:

  1. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
  2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
  3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).

References

  1. Abebe, M. A., Li, P., Acharya, K., & Daspit, J. J. (2021). The founder chief executive officer: A review of current insights and directions for future research. Corporate Governance: An International Review, 28(6), 406–436. https://doi.org/10.1111/corg.12348 DOI: https://doi.org/10.1111/corg.12348
  2. Agustia, D., Sawarjuwono, T., & Dianawati, W. (2019). The mediating effect of environmental management accounting on green innovation - firm value relationship. International Journal of Energy Economics and Policy, 9(2), 299–306. https://doi.org/10.32479/ijeep.7438 DOI: https://doi.org/10.32479/ijeep.7438
  3. Amin, A., Ali, R., & Rehman, R. U. (2026). Family founders, firm value and founder’s companions. Journal of Applied Accounting Research, 27(2). https://doi.org/10.1108/JAAR-06-2024-0210 DOI: https://doi.org/10.1108/JAAR-06-2024-0210
  4. Asni, N., & 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, 25(5), 1328–1347. https://doi.org/10.1108/EJIM-11-2020-0459 DOI: https://doi.org/10.1108/EJIM-11-2020-0459
  5. Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108 DOI: https://doi.org/10.1177/014920639101700108
  6. Bloomberg. (2023). Bloomberg’s impact report. Bloomberg. https://esgvoices.com/post/bloomberg-s-2023-impact-report/
  7. Colombelli, A., Ghisetti, C., & Quatraro, F. (2020). Green technologies and firms’ market value: A micro-econometric analysis of European firms. Industrial and Corporate Change, 29(3), 855–875. https://doi.org/10.1093/icc/dtaa003 DOI: https://doi.org/10.1093/icc/dtaa003
  8. Dai, D., & Xue, Y. (2022). The impact of green innovation on a firm’s value from the perspective of enterprise life cycles. Sustainability, 14(1226), 1–19. https://doi.org/10.3390/su14031226 DOI: https://doi.org/10.3390/su14031226
  9. Gao, Y., & Han, K. S. (2022). Managerial overconfidence, CSR and firm value. Asia-Pacific Journal of Accounting and Economics, 29(6), 1600–1618. https://doi.org/10.1080/16081625.2020.1830558 DOI: https://doi.org/10.1080/16081625.2020.1830558
  10. Hambrick, D. C. (2007). Upper echelons theory: An update. Academy of Management Review, 32(2), 334–343. https://doi.org/10.5465/amr.2007.24345254 DOI: https://doi.org/10.5465/amr.2007.24345254
  11. Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2), 193–206. https://doi.org/10.5465/amr.1984.4277628 DOI: https://doi.org/10.2307/258434
  12. Hart, S. L. (1995). A natural resource-based view of the firm. Academy of Management Review, 20(4), 986–1014. https://doi.org/10.2307/258963 DOI: https://doi.org/10.2307/258963
  13. Hidayat, I., Hamdani, Abbas, D. S., Lam, N. T., & Sari, P. A. (2024). The role of environmental management accounting in mediating green innovation to firm value: Moderated by quality management. International Journal of Energy Economics and Policy, 14(3), 281–287. https://doi.org/10.32479/ijeep.15869 DOI: https://doi.org/10.32479/ijeep.15869
  14. Huang, Y., Ding, H., & Kao, M.-R. (2009). Salient stakeholder voices: Family business and green innovation adoption. Journal of Management & Organization, 15, 309–326. https://doi.org/10.1017/S1833367200002649 DOI: https://doi.org/10.5172/jmo.2009.15.3.309
  15. Husnaini, W., & Tjahjadi, B. (2021). Quality management, green innovation and firm value: Evidence from Indonesia. International Journal of Energy Economics and Policy, 11(1), 255–262. https://doi.org/10.32479/ijeep.10282 DOI: https://doi.org/10.32479/ijeep.10282
  16. Indrawati, H., Caska, C., Hermita, N., Sumarno, S., & Syahza, A. (2025). Green innovation adoption of SMEs in Indonesia: What factors determine it? International Journal of Innovation Science, 17(1), 19–37. https://doi.org/10.1108/IJIS-02-2023-0047 DOI: https://doi.org/10.1108/IJIS-02-2023-0047
  17. International Energy Agency. (2023). International Energy Agency reports. International Energy Agency. https://www.iea.org/countries/indonesia
  18. Kim, W. S., & Kiymaz, H. (2023). Founder CEOs, business groups and firm value: Evidence from an emerging market. International Journal of Emerging Markets, 18(5), 1102–1123. https://doi.org/10.1108/IJOEM-05-2019-0351 DOI: https://doi.org/10.1108/IJOEM-05-2019-0351
  19. Kongkaew, T., Tongkong, S., & Ngudgratoke, S. (2021). Moderating effects of founders’ role on the influence of internationalization on IPO performance of listed companies in Thailand. International Journal of Financial Studies, 9(37), 1–16. https://doi.org/10.3390/ijfs9030037 DOI: https://doi.org/10.3390/ijfs9030037
  20. LeCounte, J. F. (2024). A theory of founder-CEOs succession: Governance implications for mature family firms amidst strategic successes and failures. International Journal of Organizational Analysis, 32(3), 451–475. https://doi.org/10.1108/IJOA-09-2022-3433 DOI: https://doi.org/10.1108/IJOA-09-2022-3433
  21. Lestari, K. C., & Soewarno, N. (2024). Do female directors influence firm value? The mediating role of green innovation. Gender in Management, 39(2), 255–273. https://doi.org/10.1108/GM-08-2022-0281 DOI: https://doi.org/10.1108/GM-08-2022-0281
  22. Liu, L. (2024). Green innovation, firm performance, and risk mitigation: Evidence from the USA. Environment, Development and Sustainability, 26, 24009–24030. https://doi.org/10.1007/s10668-023-03632-z DOI: https://doi.org/10.1007/s10668-023-03632-z
  23. Lu, F., Zang, Z., Mehmood, K., Ghani, U., & Rao, S. (2025). The green blueprint: Founder clan culture imprints and green innovation in Chinese family firms. Sustainability (Switzerland), 17(5), 1–20. https://doi.org/10.3390/su17051978 DOI: https://doi.org/10.3390/su17051978
  24. MSCI. (2023). The MSCI net-zero tracker. https://www.msci.com/documents/1296102/38217127/NetZero-Tracker-May.pdf
  25. Samhadi, Roekhudin, & Syaiful, I. (2024). The moderating role of good corporate governance in the relationship between green innovation, environmental disclosure and firm value. Jurnal Reviu Akuntansi Dan Keuangan, 14(3), 553–569. https://doi.org/10.22219/jrak.v14i3.33925 DOI: https://doi.org/10.22219/jrak.v14i3.33925
  26. Shao, Y., Zheng, M., Xu, X., & Ji, X. (2025). Does ESG performance have an impact on firm value? Evidence from the Chinese textile and garment industry. Industria Textila, 76(2), 249–256. https://doi.org/10.35530/IT.076.02.2023126 DOI: https://doi.org/10.35530/IT.076.02.2023126
  27. Sutrisno, P., & Karmudiandri, A. (2020). CEO overconfidence, founder and restatement of financial reporting. International Journal of Business, Economics and Law, 23(1), 192–198.
  28. Sutrisno, P., Utama, S., Anitawati Hermawan, A., & Fatima, E. (2022). Founder and descendant vs. professional CEO: Does CEO overconfidence affect tax avoidance in the Indonesia case? Economies, 10(327), 1–20. https://doi.org/10.3390/economies10120327 DOI: https://doi.org/10.3390/economies10120327
  29. Sutrisno, P., Utama, S., Hermawan, A. A., & Fatima, E. (2023a). Do founder CEOs and overconfidence affect firm risk? Accounting Research Journal, 36(4/5), 434–452. https://doi.org/10.1108/ARJ-09-2022-0234 DOI: https://doi.org/10.1108/ARJ-09-2022-0234
  30. Sutrisno, P., Utama, S., Hermawan, A. A., & Fatima, E. (2023b). Founder or descendant CEOs, tax avoidance and firms’ future risks: The Indonesian evidence. Journal of Family Business Management, 13(4), 1190–1211. https://doi.org/10.1108/JFBM-10-2022-0122 DOI: https://doi.org/10.1108/JFBM-10-2022-0122
  31. Tian, J., Dong, Y., Vagnani, G., & Liu, P. (2023). Green innovation and the stock market value of heavily polluting firms: The role of environmental compliance costs and technological collaboration. Business Strategy and the Environment, 32(7), 4938–4953. https://doi.org/10.1002/bse.3401 DOI: https://doi.org/10.1002/bse.3401
  32. Wang, Q., Pei, X., & Liang, H. (2022). Founder CEO, CEO characteristics, and firm innovation efficiency: An empirical study of China’s GEM-listed companies. Sustainability, 14(8250), 1–22. https://doi.org/10.3390/su14148250 DOI: https://doi.org/10.3390/su14148250
  33. Wang, Z., Ye, Y., & Liu, X. (2024). How CEO responsible leadership shapes corporate social responsibility and organization performance: The roles of organizational climates and CEO founder status. International Journal of Contemporary Hospitality Management, 36(6), 1944–1962. https://doi.org/10.1108/IJCHM-11-2022-1498 DOI: https://doi.org/10.1108/IJCHM-11-2022-1498
  34. World Bank. (2024). World Bank report. World Bank. https://data.worldbank.org/indicator/EN.GHG.FGAS.IP.MT.CE.AR5?end=2024&locations=ID&start=1990&view=chart
  35. Wu, H., Fargher, N., & Wright, S. (2010). Accounting for investments and the relevance of losses to firm value. International Journal of Accounting, 45(1), 104–127. https://doi.org/10.1016/j.intacc.2010.01.005 DOI: https://doi.org/10.1016/j.intacc.2010.01.005
  36. Xie, Z., Wang, J., & Zhao, G. (2022). Impact of green innovation on firm value: Evidence from listed companies in China’s heavy pollution industries. Frontiers in Energy Research, 9(January), 1–17. https://doi.org/10.3389/fenrg.2021.806926 DOI: https://doi.org/10.3389/fenrg.2021.806926
  37. Yan, X., & Zhang, Y. (2021). The effects of green innovation and environmental management on the environmental performance and value of a firm: An empirical study of energy-intensive listed companies in China. Environmental Science and Pollution Research, 28(27), 35870–35879. https://doi.org/10.1007/s11356-021-12761-9 DOI: https://doi.org/10.1007/s11356-021-12761-9
  38. Yuniarti, R., Soewarno, N., & Isnalita. (2022). Green innovation on firm value with financial performance as mediating variable: Evidence of the mining industry. Asian Academy of Management Journal, 27(2), 41–58. https://doi.org/10.21315/aamj2022.27.2.3 DOI: https://doi.org/10.21315/aamj2022.27.2.3
  39. Zhang, F., Qin, X., & Liu, L. (2020). The interaction effect between ESG and green innovation and its impact on firm value from the perspective of information disclosure. Sustainability, 12(1866), 1–18. https://doi.org/10.3390/su12051866 DOI: https://doi.org/10.3390/su12051866