Moderating Role of Good Corporate Governance in the Effects of Green Finance, Leverage, and Profitability on Firm Value

Ainal Mardhiah; Asep Risman

doi:10.55927/ajabm.v5i1.16

Authors

Ainal Mardhiah Universitas Mercu Buana
Asep Risman Universitas Mercu Buana

DOI:

https://doi.org/10.55927/ajabm.v5i1.16

Keywords:

Green Finance, Leverage, Profitability, Firm Value, Good Corporate Governance

Abstract

This study analyzes the influence of green finance, leverage, and profitability on firm value, with Good Corporate Governance (GCG) as a moderating variable, in energy companies listed on the Indonesia Stock Exchange (IDX) from 2020 to 2024. Using a quantitative explanatory approach, the study employs secondary data from annual and sustainability reports, with purposive sampling resulting in 11 firms and 72 firm-year observations. Panel data regression using Fixed Effect Model (FEM) and Moderated Regression Analysis (MRA) was applied, measuring firm value by Price-to-Book Value (PBV), green finance by Green Finance Disclosure Index (GFDI), leverage by Debt-to-Asset Ratio (DAR), profitability by Net Profit Margin (NPM), and GCG by institutional ownership. The results indicate that green finance positively and significantly affects firm value, while leverage has a negative and significant effect. Profitability shows no significant influence. Moreover, GCG moderates the relationships between green finance and firm value and between leverage and firm value by reducing their effects, but it does not moderate profitability. These findings highlight the importance of governance in improving firm value.

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