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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.
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