COVID-19, Green Innovation and Their Impacts on Financial Performance
Abstract
In the face of pandemics like COVID-19 today, environmental issues such as green innovation become very important, because companies with high levels of social and environmental awareness indicate that the companies are more resilient. This study aims to analyze the impact of COVID-19 and green innovation on financial performance. This study uses the Vector Error Correction Model (VECM) as a data analysis method and uses purposive sampling to get 48 samples with 336 observations. The results of this study indicate that COVID-19 has a significant negative impact on financial performance in the long and short term, managers ought to take note of the converting surroundings outside and adjust their commercial enterprise strategies in time. Meanwhile green innovation has a positive impact on financial performance in the long and short term. The implementation of green innovation activities affected the competitiveness and ?rm pro?ts.
Keywords: COVID-19; Green Innovation; Financial Performance; VECM
Downloads
Download data is not yet available.
References
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
Andrian, T. (2020). Linking Corporate Carbon Emission, Social Responsibility Disclosures and Firm Financial Performance. Test Engineering and Management, June. https://www.researchgate.net/profile/Tommy-Andrian/publication/342437520_Linking_Corporate_Carbon_Emission_Social_Responsibility_Disclosure_and_Firm_Financial_Performance/links/5ef4512192851c35353fc517/Linking-Corporate-Carbon-Emission-Social-Responsibili
Apriliana, E. (2019). Pengaruh Tipe Industri, Kinerja Lingkungan, Dan Profitabilitas Terhadap Carbon Emission Disclosure. Widyakala Journal, 6(1), 84. https://doi.org/10.36262/widyakala.v6i1.149
Azizah, W. (2021). Covid-19 in Indonesia: Analysis of Differences Earnings Management in the First Quarter. Jurnal Akuntansi, 11(1), 23–32. https://doi.org/10.33369/j.akuntansi.11.1.23-32
Boshnak, H. A., Basheikh, A. M., & Basaif, M. S. (2021). The impact of firm characteristics on firm performance during the covid-19 pandemic: evidence from Saudi Arabia. Asian Economic and Financial Review, 11(9), 693–709. https://doi.org/10.18488/JOURNAL.AEFR.2021.119.693.709
Broadstock, D. C., Chan, K., Cheng, L. T. W., & Wang, X. (2021). The role of ESG performance during times of financial crisis: Evidence from COVID-19 in China. Finance Research Letters, 38(June 2020), 101716. https://doi.org/10.1016/j.frl.2020.101716
Devi, S., Warasniasih, N. M. S., & Masdiantini, P. R. (2020). The Impact of COVID-19 Pandemic on the Financial Performance of Firms on the Indonesia Stock Exchange. Journal of Economics, Business, & Accountancy Ventura, 23(2), 226–242. https://doi.org/10.14414/jebav.v23i2.2313
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, 29(8), 3286–3302. https://doi.org/10.1002/bse.2572
Elsaid, K., Olabi, V., Sayed, E. T., Wilberforce, T., & Abdelkareem, M. A. (2021). Effects of COVID-19 on the environment: An overview on air, water, wastewater, and solid waste. Journal of Environmental Management, 292(November 2020), 112694. https://doi.org/10.1016/j.jenvman.2021.112694
Fadlilah, A. H., Ramadhany, A. A., Richmayati, M., Mustika, I., & Nabella, S. D. (2021). The Effect of Green Innovation on Financial Performance With Environmental Dynamism As Moderating Variable. Psychology and Education Journal, 58(1), 5228–5234. https://doi.org/10.17762/pae.v58i1.1776
Haxhimusa, A., & Liebensteiner, M. (2021). Effects of electricity demand reductions under a carbon pricing regime on emissions: lessons from COVID-19. Energy Policy, 156(June), 112392. https://doi.org/10.1016/j.enpol.2021.112392
Hu, D., Qiu, L., She, M., & Wang, Y. (2021). Sustaining the sustainable development: How do firms turn government green subsidies into financial performance through green innovation? Business Strategy and the Environment, 30(5), 2271–2292. https://doi.org/10.1002/bse.2746
Hu, S., & Zhang, Y. (2021). COVID-19 pandemic and firm performance: Cross-country evidence. International Review of Economics and Finance, 74(2020), 365–372. https://doi.org/10.1016/j.iref.2021.03.016
Li, L., Msaad, H., Sun, H., Tan, M. X., Lu, Y., & Lau, A. K. W. (2020). Green innovation and business sustainability: New evidence from energy intensive industry in China. International Journal of Environmental Research and Public Health, 17(21), 1–18. https://doi.org/10.3390/ijerph17217826
Lin, W. L., Cheah, J. H., Azali, M., Ho, J. A., & Yip, N. (2019). Does firm size matter? Evidence on the impact of the green innovation strategy on corporate financial performance in the automotive sector. Journal of Cleaner Production, 229, 974–988. https://doi.org/10.1016/j.jclepro.2019.04.214
Lu, W., Zhu, N., & Zhang, J. (2021). The impact of carbon disclosure on financial performance under low carbon constraints. Energies, 14(14). https://doi.org/10.3390/en14144126
Ma, Y., Zhang, Q., & Yin, Q. (2021). Top management team faultlines, green technology innovation and firm financial performance. Journal of Environmental Management, 285(February), 112095. https://doi.org/10.1016/j.jenvman.2021.112095
Martínez Serna, M. D. C., & García Guerra, A. (2021). Environmental hostility business in mexican exporting smes in the context of covid-19: Effect on the performance. Revista Venezolana de Gerencia, 26(Special Issue 5), 478–489. https://doi.org/10.52080/rvgluz.26.e5.31
Mior Ahmed Shahimi, W. R., Hanafi, A. H. A., & Mohamad Yusof, N. A. (2021). the Impact of Covid-19 on the Financial Performance of Pn17 and Gn3 Status Firms: Does It Add Salt Into the Wound? Advanced International Journal of Banking, Accounting and Finance, 3(7), 47–58. https://doi.org/10.35631/aijbaf.37004
Osayantin, H., Saidu, A., & Aifuwa, S. A. (2020). Coronavirus Pandemic Outbreak and Firms Performance in Nigeria. Management and Human Resource Research Journal, 9(4), 15–25. www.cird.online/MHRRJ
Rababah, A., Al-Haddad, L., Sial, M. S., Chunmei, Z., & Cherian, J. (2020). Analyzing the effects of COVID-19 pandemic on the financial performance of Chinese listed companies. Journal of Public Affairs, 20(4). https://doi.org/10.1002/pa.2440
Ramadhany, A. A., Fadlilah, A. H., Richmayati, M., Mustika, I., & Nabella, S. D. (2021). The Mediation Effect Firm Performance on Green Innovation and Firm Value: Evidence the Mining Industry. Turkish Journal of Computer and Mathematics Education (TURCOMAT), 12(3), 1377–1783. https://doi.org/10.17762/turcomat.v12i3.909
Sachs, J. D., Woo, W. T., Yoshino, N., & Taghizadeh-hesary, F. (n.d.). Sachs2019_ReferenceWorkEntry_ImportanceOfGreenFinanceForAch.pdf. 1–10.
Shen, H., Fu, M., Pan, H., Yu, Z., & Chen, Y. (2020). The Impact of the COVID-19 Pandemic on Firm Performance. Emerging Markets Finance and Trade, 56(10), 2213–2230. https://doi.org/10.1080/1540496X.2020.1785863
Spoz, Anna., Skibińska-Fabrowska, Ilona., Kotliński, Grzegorz & Żukowska, Helena (2021). The Impact of the Covid-19 Pandemic on the Financial Performance of Public Companies in Poland. European Research Studies Journal, XXIV(4), 955-976.
Wang, Y., Ouyang, Z., Lin, T. Y., & Chiu, S. H. (2021). Does corporate green innovation enhance the persistence of financial performance? Evidence from Chinese listed corporations. ACM International Conference Proceeding Series, 64–69. https://doi.org/10.1145/3460824.3460835
Xue, M., Boadu, F., & Xie, Y. (2019). The penetration of green innovation on firm performance: Effects of absorptive capacity and managerial environmental concern. Sustainability (Switzerland), 11(9). https://doi.org/10.3390/su11092455
Yi, Y., Zeng, S., Chen, H., & Shi, J. J. (2021). When Does It Pay to Be Good? A Meta-Analysis of the Relationship Between Green Innovation and Financial Performance. IEEE Transactions on Engineering Management, 1–11. https://doi.org/10.1109/TEM.2021.3079098
Yoo, S., Keeley, A. R., & Managi, S. (2021). Does sustainability activities performance matter during financial crises? Investigating the case of COVID-19. Energy Policy, 155(March), 112330. https://doi.org/10.1016/j.enpol.2021.112330
Andrian, T. (2020). Linking Corporate Carbon Emission, Social Responsibility Disclosures and Firm Financial Performance. Test Engineering and Management, June. https://www.researchgate.net/profile/Tommy-Andrian/publication/342437520_Linking_Corporate_Carbon_Emission_Social_Responsibility_Disclosure_and_Firm_Financial_Performance/links/5ef4512192851c35353fc517/Linking-Corporate-Carbon-Emission-Social-Responsibili
Apriliana, E. (2019). Pengaruh Tipe Industri, Kinerja Lingkungan, Dan Profitabilitas Terhadap Carbon Emission Disclosure. Widyakala Journal, 6(1), 84. https://doi.org/10.36262/widyakala.v6i1.149
Azizah, W. (2021). Covid-19 in Indonesia: Analysis of Differences Earnings Management in the First Quarter. Jurnal Akuntansi, 11(1), 23–32. https://doi.org/10.33369/j.akuntansi.11.1.23-32
Boshnak, H. A., Basheikh, A. M., & Basaif, M. S. (2021). The impact of firm characteristics on firm performance during the covid-19 pandemic: evidence from Saudi Arabia. Asian Economic and Financial Review, 11(9), 693–709. https://doi.org/10.18488/JOURNAL.AEFR.2021.119.693.709
Broadstock, D. C., Chan, K., Cheng, L. T. W., & Wang, X. (2021). The role of ESG performance during times of financial crisis: Evidence from COVID-19 in China. Finance Research Letters, 38(June 2020), 101716. https://doi.org/10.1016/j.frl.2020.101716
Devi, S., Warasniasih, N. M. S., & Masdiantini, P. R. (2020). The Impact of COVID-19 Pandemic on the Financial Performance of Firms on the Indonesia Stock Exchange. Journal of Economics, Business, & Accountancy Ventura, 23(2), 226–242. https://doi.org/10.14414/jebav.v23i2.2313
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, 29(8), 3286–3302. https://doi.org/10.1002/bse.2572
Elsaid, K., Olabi, V., Sayed, E. T., Wilberforce, T., & Abdelkareem, M. A. (2021). Effects of COVID-19 on the environment: An overview on air, water, wastewater, and solid waste. Journal of Environmental Management, 292(November 2020), 112694. https://doi.org/10.1016/j.jenvman.2021.112694
Fadlilah, A. H., Ramadhany, A. A., Richmayati, M., Mustika, I., & Nabella, S. D. (2021). The Effect of Green Innovation on Financial Performance With Environmental Dynamism As Moderating Variable. Psychology and Education Journal, 58(1), 5228–5234. https://doi.org/10.17762/pae.v58i1.1776
Haxhimusa, A., & Liebensteiner, M. (2021). Effects of electricity demand reductions under a carbon pricing regime on emissions: lessons from COVID-19. Energy Policy, 156(June), 112392. https://doi.org/10.1016/j.enpol.2021.112392
Hu, D., Qiu, L., She, M., & Wang, Y. (2021). Sustaining the sustainable development: How do firms turn government green subsidies into financial performance through green innovation? Business Strategy and the Environment, 30(5), 2271–2292. https://doi.org/10.1002/bse.2746
Hu, S., & Zhang, Y. (2021). COVID-19 pandemic and firm performance: Cross-country evidence. International Review of Economics and Finance, 74(2020), 365–372. https://doi.org/10.1016/j.iref.2021.03.016
Li, L., Msaad, H., Sun, H., Tan, M. X., Lu, Y., & Lau, A. K. W. (2020). Green innovation and business sustainability: New evidence from energy intensive industry in China. International Journal of Environmental Research and Public Health, 17(21), 1–18. https://doi.org/10.3390/ijerph17217826
Lin, W. L., Cheah, J. H., Azali, M., Ho, J. A., & Yip, N. (2019). Does firm size matter? Evidence on the impact of the green innovation strategy on corporate financial performance in the automotive sector. Journal of Cleaner Production, 229, 974–988. https://doi.org/10.1016/j.jclepro.2019.04.214
Lu, W., Zhu, N., & Zhang, J. (2021). The impact of carbon disclosure on financial performance under low carbon constraints. Energies, 14(14). https://doi.org/10.3390/en14144126
Ma, Y., Zhang, Q., & Yin, Q. (2021). Top management team faultlines, green technology innovation and firm financial performance. Journal of Environmental Management, 285(February), 112095. https://doi.org/10.1016/j.jenvman.2021.112095
Martínez Serna, M. D. C., & García Guerra, A. (2021). Environmental hostility business in mexican exporting smes in the context of covid-19: Effect on the performance. Revista Venezolana de Gerencia, 26(Special Issue 5), 478–489. https://doi.org/10.52080/rvgluz.26.e5.31
Mior Ahmed Shahimi, W. R., Hanafi, A. H. A., & Mohamad Yusof, N. A. (2021). the Impact of Covid-19 on the Financial Performance of Pn17 and Gn3 Status Firms: Does It Add Salt Into the Wound? Advanced International Journal of Banking, Accounting and Finance, 3(7), 47–58. https://doi.org/10.35631/aijbaf.37004
Osayantin, H., Saidu, A., & Aifuwa, S. A. (2020). Coronavirus Pandemic Outbreak and Firms Performance in Nigeria. Management and Human Resource Research Journal, 9(4), 15–25. www.cird.online/MHRRJ
Rababah, A., Al-Haddad, L., Sial, M. S., Chunmei, Z., & Cherian, J. (2020). Analyzing the effects of COVID-19 pandemic on the financial performance of Chinese listed companies. Journal of Public Affairs, 20(4). https://doi.org/10.1002/pa.2440
Ramadhany, A. A., Fadlilah, A. H., Richmayati, M., Mustika, I., & Nabella, S. D. (2021). The Mediation Effect Firm Performance on Green Innovation and Firm Value: Evidence the Mining Industry. Turkish Journal of Computer and Mathematics Education (TURCOMAT), 12(3), 1377–1783. https://doi.org/10.17762/turcomat.v12i3.909
Sachs, J. D., Woo, W. T., Yoshino, N., & Taghizadeh-hesary, F. (n.d.). Sachs2019_ReferenceWorkEntry_ImportanceOfGreenFinanceForAch.pdf. 1–10.
Shen, H., Fu, M., Pan, H., Yu, Z., & Chen, Y. (2020). The Impact of the COVID-19 Pandemic on Firm Performance. Emerging Markets Finance and Trade, 56(10), 2213–2230. https://doi.org/10.1080/1540496X.2020.1785863
Spoz, Anna., Skibińska-Fabrowska, Ilona., Kotliński, Grzegorz & Żukowska, Helena (2021). The Impact of the Covid-19 Pandemic on the Financial Performance of Public Companies in Poland. European Research Studies Journal, XXIV(4), 955-976.
Wang, Y., Ouyang, Z., Lin, T. Y., & Chiu, S. H. (2021). Does corporate green innovation enhance the persistence of financial performance? Evidence from Chinese listed corporations. ACM International Conference Proceeding Series, 64–69. https://doi.org/10.1145/3460824.3460835
Xue, M., Boadu, F., & Xie, Y. (2019). The penetration of green innovation on firm performance: Effects of absorptive capacity and managerial environmental concern. Sustainability (Switzerland), 11(9). https://doi.org/10.3390/su11092455
Yi, Y., Zeng, S., Chen, H., & Shi, J. J. (2021). When Does It Pay to Be Good? A Meta-Analysis of the Relationship Between Green Innovation and Financial Performance. IEEE Transactions on Engineering Management, 1–11. https://doi.org/10.1109/TEM.2021.3079098
Yoo, S., Keeley, A. R., & Managi, S. (2021). Does sustainability activities performance matter during financial crises? Investigating the case of COVID-19. Energy Policy, 155(March), 112330. https://doi.org/10.1016/j.enpol.2021.112330
Published
2022-12-26
How to Cite
RAMADHAN, Prasetyo et al.
COVID-19, Green Innovation and Their Impacts on Financial Performance.
E-Jurnal Akuntansi, [S.l.], v. 32, n. 12, p. 3658-3673, dec. 2022.
ISSN 2302-8556.
Available at: <https://ojs.unud.ac.id/index.php/akuntansi/article/view/91719>. Date accessed: 21 nov. 2024.
doi: https://doi.org/10.24843/EJA.2022.v32.i12.p13.
Issue
Section
Artikel
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
