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VOL. 6, ISSUE 2 (2024)
Effect environmental performance, financial ratio, and company size on company environmental disclosures
Authors
Lufis Ariefudin Alarafi, Andri Prastiwi, Aditya Septiani
Abstract
This study aims to investigate the relationship
between environmental performance, financial ratios and firm size with
corporate environmental disclosure based on legitimacy and stakeholder
theories. A total of 44 non-financial companies in the 2017-2019 period became
the research sample and resulted in 86 observations after deducting outliers.
Hypothesis testing is done with multiple linear regression analysis, which is
preceded by the fulfilment of classical assumptions. The results showed that
environmental performance and leverage have a significant positive effect on
environmental disclosure as it occurs in manufacturing companies. Companies
realize the importance of conducting environmental activities and informing
stakeholders to obtain community legitimacy and a form of fulfilling the company's
information needs to stakeholders, which is in accordance with legitimacy and
stakeholder theory. Profitability, liquidity, and company size have no
significant effect on environmental disclosure, which indicates a positive
shift in understanding of the role of environmental performance and
environmental disclosure that is no longer influenced primarily by the
company's ability to generate profits and the size of the company. In addition,
the results of this study answer doubt about the role of financial ratios or
firm characteristics, which apparently do not cause the relationship between
environmental performance and environmental disclosure to be negative.
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Pages:65-71
How to cite this article:
Lufis Ariefudin Alarafi, Andri Prastiwi, Aditya Septiani "Effect environmental performance, financial ratio, and company size on company environmental disclosures". International Journal of Finance and Commerce, Vol 6, Issue 2, 2024, Pages 65-71
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