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Journal : Binus Business Review

Environmental, Social, and Governance Risk on Firm Performance: The Mediating Role of Firm Risk Wildan Yudhanto; Alex Johanes Simamora
Binus Business Review Vol. 14 No. 2 (2023): Binus Business Review
Publisher : Bina Nusantara University

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.21512/bbr.v14i2.8935

Abstract

Business sustainability can be improved by achieving Environmental, Social, and Governance (ESG) aspects. The research aimed to examine the effect of ESG risk on firm risk and performance, the effect of firm risk on performance, and the mediating role of firm risk between ESG risk and performance. The research sample included 150 firms listed on the Indonesia ESG Leaders Index in Indonesian Stock Exchange in 2020-2022. The research measured ESG risk by the value of ESG risk, firm risk by stock return volatility, and performance by Return on Asset (ROA) and Tobin’s Q. Data analysis applied path analysis. Based on data analysis, lower ESG risk reduces firm risk and increases performance. Moreover, lower firm risk increases performance, and lower ESG risk increases performance through firm risk reduction. The result indicates that lower ESG risk captures the ability of ESG implementation to reduce the risk of economic value and give benefit to reducing costs of conflict, uncertainty, and bad reputation risk. Furthermore, lower ESG risk improves performance by helping firms to promote higher revenue and cost efficiency. In additional analysis, the effect of lower ESG risk on firm risk reduction and performance improvement occurs more for firms in the environmentally sensitive industry. The results show that industry sensitivity strengthens the positive effect of ESG risk on firm risk and the negative effect of ESG risk on performance. The research contributes to giving new evidence of ESG risk on firm risk and performance in Indonesia since ESG risk assessment is a new evaluation on the Indonesian Stock Exchange.
How Does Entrepreneurial Competence Contribute to Livestock Farmers’ Performance? Mikael Sihite; Eka Nur Jannah; Alex Johanes Simamora; Wildan Yudhanto
Binus Business Review Vol. 16 No. 1 (2025): Binus Business Review
Publisher : Bina Nusantara University

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.21512/bbr.v16i1.11585

Abstract

The research aimed to examine (1) the direct effect of entrepreneurial skill, market orientation, sales orientation, and networking on entrepreneurial competence; (2) the direct effect of entrepreneurial competence on livestock farmers’ performance; and (3) the indirect effect of entrepreneurial skill, market orientation, sales orientation, and networking on livestock farmers’ performance through entrepreneurial competence. Samples were 399 livestock farmers in Magelang Regency. The independent variables were entrepreneurial skills, market orientation, sales orientation, and networking. Meanwhile, the dependent variable was livestock farmers’ performance, and the mediating variable was entrepreneurial competence. Variable measurement used 7-Likert scale questionaries. Then, data analysis used Structural Equation Modeling (SEM). Based on data analysis, the research finds that entrepreneurial skill, market orientation, sales orientation, and networking improve entrepreneurial competence. In addition, entrepreneurial competence increases livestock farmers’ performance, Then, entrepreneurial skill, market orientation, sales orientation, and networking improve livestock farmers’ performance through entrepreneurial competence. The research contributes to giving new evidence of entrepreneurial competence in the context of animal husbandry. The research also contributes to capturing how the implementation of the Resources-Based View (RBV) concept affects the achievement of livestock farmers’ performance. The research has some implications. First, livestock farmers increase entrepreneurial competence by building entrepreneurial skills, market orientation, sales orientation, and networking to improve performance. Second, regulators can formulate regulations or programs that can help livestock farmers to grow their businesses since the business is run individually, such as human resource development or business establishment programs.