DOES GOOD CORPORATE GOVERNANCE AND ECO–EFFICIENCY REALLY CONTRIBUTE TO FIRM VALUE? AN EMPIRICAL STUDY IN INDONESIAN STATE-OWNED ENTERPRISES (SOES)

Abstract

This study examined the relationship between good corporate governance (GCG) and eco-efficiency on firm performance and firm value. Good corporate governance were proxied by GCG score, board meeting, and board independent. Eco-efficiency was proxied by the ownership of the environmental management certificate ISO 14001. Firm value was proxied by Tobins’Q value owned the company. Firm’s financial performance was proxied by Return on Assets (ROA) value. This research was motivated by an empirical gap, which there are companies that have corporate governance issues but still have a positive response by the market as indicated by an increasing share price. In addition, there are still differences results from previous studies. The results of this study indicate that eco-efficiency which proxied by the ownership of an ISO 14001 environmental management certificate has a positive and significant relationship with firm’s financial performance (ROA), where ROA has a positive and significant relationship to firm value. However, eco-efficiency does not have a direct relationship with firm value. Meanwhile, good corporate governance has no relationship with firm’s financial performance and firm value.