Does ISO 14001 Moderate the Effect of Green Innovation on Financial Performance

Indira Karima Umaroe, Hamidah Hamidah

Abstract


The purpose of this research is to gather empirical evidence on the influence of green processes and green product innovation on financial performance moderated by ISO 14001. The research population is the manufacturing sector listed on the Indonesia Stock Exchange during 2012-2019. The sample was chosen based on specific criteria and so the research sample obtained 184 observations. The conclusion is that green process innovation and green product innovation influence an increase in financial performance proxied by return on assets (ROA) however, ISO 14001 certification does not moderate the influence of green process innovation and green product innovation on financial performance. Regardless of whether the organization achieves ISO 14001 certification, it will continue to implement green innovation. The purpose of ISO 14001 certification is to create a green image for the organization; therefore, a company with ISO 14001 certification does not always apply green innovation or even increase its performance.

 

 


Keywords


green process innovation; green product innovation; return on assets; ISO 14001

Full Text:

PDF

References


Afiezan, A., et.al. (2020). The Effect of Free Cash Flow, Company Size, Profitability and Liquidity on Debt Policy for Manufacturing Companies Listed on IDX in 2016-2019 Periods. Budapest International Research and Critics Institute-Journal (BIRCI-Journal) Vol 3 (4): 4005-4018.

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/https://doi.org/10.32479/ijeep.7438 ABSTRACT

Ann, G. E., Zailani, S., & Abd Wahid, N. (2006). A study on the impact of environmental management system (EMS) certification towards firms’ performance in Malaysia. Management of Environmental Quality: An International Journal. https://doi.org/https://doi.org/10.1108/14777830610639459

Ar, I. M. (2012). The impact of green product innovation on firm performance and competitive capability: the moderating role of managerial environmental concern. Procedia-Social and Behavioral Sciences, 62, 854–864. https://doi.org/10.1016/j.sbspro.2012.09.144

Arocena, P., Orcos, R., & Zouaghi, F. (2020). The impact of ISO 14001 on firm environmental and economic performance: The moderating role of size and environmental awareness. Business Strategy and the Environment, September, 1–13. https://doi.org/10.1002/bse.2663

Asni, N., & Agustia, D. (2021). The mediating role of financial performance in the relationship between green innovation and firm value: evidence from ASEAN countries. European Journal of Innovation Management. https://doi.org/10.1108/EJIM-11-2020-0459

Cai, W., & Li, G. (2018). The drivers of eco-innovation and its impact on performance: Evidence from China. Journal of Cleaner Production, 176, 110–118. https://doi.org/10.1016/j.jclepro.2017.12.109

Calza, F., Parmentola, A., & Tutore, I. (2017). Types of green innovations: Ways of implementation in a non-green industry. Sustainability, 9(8), 1301. https://doi.org/10.3390/su9081301

Chen, Y. S., Lai, S. B., & Wen, C. T. (2006). The influence of green innovation performance on corporate advantage in Taiwan. Journal of Business Ethics, 67(4), 331–339. https://doi.org/10.1007/s10551-006-9025-5

Cheng, C. C. J., Yang, C. L., & Sheu, C. (2014). The link between eco-innovation and business performance: A Taiwanese industry context. Journal of Cleaner Production, 64, 81–90. https://doi.org/10.1016/j.jclepro.2013.09.050

Chiou, T. Y., Chan, H. K., Lettice, F., & Chung, S. H. (2011). The influence of greening the suppliers and green innovation on environmental performance and competitive advantage in Taiwan. Transportation Research Part E: Logistics and Transportation Review, 47(6), 822–836. https://doi.org/10.1016/j.tre.2011.05.016

Duque-Grisales, E., Aguilera-Caracuel, J., Guerrero-Villegas, J., & García-Sánchez, E. (2020). Does green innovation affect the financial performance of Multilatinas? The moderating role of ISO 14001 and R&D investment. Business Strategy and the Environment, May, 1–17. https://doi.org/10.1002/bse.2572

Durif, F., Roy, J., & Boivin, C. (2012). Could perceived risks explain the “green gap” in green product consumption? Electronic Green Journal, 1(33). https://doi.org/10.5070/g313310923

Ferrón-Vílchez, V. (2016). Does symbolism benefit environmental and business performance in the adoption of ISO 14001? Journal of Environmental Management, 183, 882–894. https://doi.org/10.1016/j.jenvman.2016.09.047

Hart, S. L. (1995). A Natural Resource View of the Firm. Academy of Management Review, 20(4), 986–1014. https://doi.org/https://doi.org/10.5465/amr.1995.9512280033

Inoue, E., Arimura, T. H., & Nakano, M. (2013). A new insight into environmental innovation: Does the maturity of environmental management systems matter? Ecological Economics, 94, 156–163. https://doi.org/10.1016/j.ecolecon.2013.07.014

Katharina, N., et.al. (2021). Influence Capital Structure, Liquidity, Size the Company, Debt Policy and Profitability towards Corporate Value on Property Company, Real Estate and Building Construction Listed on the Stock Exchange Indonesia Period 2016-2019. Budapest International Research and Critics Institute-Journal (BIRCI-Journal) Vol 4 (2): 2241-2256.

Küçükoğlu, M. T., & Pınar, R. İ. (2015). Positive influences of green innovation on company performance. Procedia - Social and Behavioral Sciences, 195, 1232–1237. https://doi.org/10.1016/j.sbspro.2015.06.261

Li, D., Tang, F., & Jiang, J. (2019). Does environmental management system foster corporate green innovation? The moderating effect of environmental regulation. Technology Analysis and Strategic Management, 31(10), 1242–1256. https://doi.org/10.1080/09537325.2019.1602259

Lin, R. J., Chen, R. H., & Huang, F. H. (2014). Green innovation in the automobile industry. Industrial Management and Data Systems, 114(6), 886–903. https://doi.org/10.1108/IMDS-11-2013-0482

Lin, R. J., Tan, K. H., & Geng, Y. (2013). Market demand, green product innovation, and firm performance: Evidence from Vietnam motorcycle industry. Journal of Cleaner Production, 40, 101–107. https://doi.org/10.1016/j.jclepro.2012.01.001

Madaleno, M., Robaina, M., Ferreira Dias, M., & Meireles, M. (2020). Dimension effects in the relationship between eco-innovation and firm performance: A European comparison. Energy Reports, 6, 631–637. https://doi.org/10.1016/j.egyr.2019.09.038

Maesaroh, & Etty, M. (2021). The Influence of Organizational Culture Environment, Environmental Capability on Firm Value in Green Competitive Advantage Moderation. Budapest International Research and Critics Institute-Journal (BIRCI-Journal), 5(3), 21018–21028. https://doi.org/https://doi.org/10.33258/birci.v5i3.6120 21018

Radon, J. (2019). CLIMATE ACTION. Journal of International Affairs, 73(1), 145–154.

Saleh, A., Dalimunthe, A.H., and Lubis, F.H. (2019). Development of Banking CSR Model for Community Empowerment Slum Area in Medan City. Budapest International Research and Critics Institute-Journal (BIRCI-Journal) Vol 2 (3): 39-50.

Sezen, B., & Çankaya, S. Y. (2013). Effects of green manufacturing and eco-innovation on sustainability performance. Procedia - Social and Behavioral Sciences, 99, 154–163. https://doi.org/10.1016/j.sbspro.2013.10.481

Simamora, V., & Sulistianingsih, I. (2021). The Role of Innovation and Information Technology Capabilities in Increasing the Competitive Advantage of MSMEs Coffee Shops in Jakarta. Budapest International Research and Critics Institute-Journal (BIRCI-Journal), 5(2), 16128–16139. https://doi.org/https://doi.org/10.33258/birci.v5i2.5530 16128

Tang, M., Walsh, G., Lerner, D., Fitza, M. A., & Li, Q. (2018). Green innovation, managerial concern and firm performance: An empirical study. Business Strategy and the Environment, 27(1), 39–51. https://doi.org/10.1002/bse.1981

Tariq, A., Badir, Y., & Chonglerttham, S. (2019). Green innovation and performance: moderation analyses from Thailand. European Journal of Innovation Management, 22(3), 446–467. https://doi.org/10.1108/EJIM-07-2018-0148

Wong, C. W. Y., Lai, K. H., Shang, K. C., Lu, C. S., & Leung, T. K. P. (2012). Green operations and the moderating role of environmental management capability of suppliers on manufacturing firm performance. International Journal of Production Economics, 140(1), 283–294. https://doi.org/10.1016/j.ijpe.2011.08.031

Xie, X., Huo, J., & Zou, H. (2019). Green process innovation, green product innovation, and corporate financial performance: A content analysis method. Journal of Business Research, 101(January), 697–706. https://doi.org/10.1016/j.jbusres.2019.01.010

Xue, M., Boadu, F., & Xie, Y. (2019). The penetration of green innovation on firm performance: Effects of absorptive capacity and managerial environmental concern. Sustainability, 11(9), 2455. https://doi.org/10.3390/su11092455

Zhang, D., Rong, Z., & Ji, Q. (2019). Green innovation and firm performance: Evidence from listed companies in China. Resources, Conservation and Recycling, 144(January), 48–55. https://doi.org/10.1016/j.resconrec.2019.01.023.




DOI: https://doi.org/10.33258/birci.v5i3.6832

Article Metrics

Abstract view : 56 times
PDF - 18 times

Refbacks

  • There are currently no refbacks.


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

 

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