Journal of Indonesian Economy and Business
Vol 30, No 2 (2015): May

DOES ECO-EFFICENCY REDUCE THE COST OF EQUITY CAPITAL? EMPIRICAL EVIDENCE FROM INDONESIA

Lisa Alviani (Ministry of Finance, Republic of Indonesia)
Mahfud Sholihin (Universitas Gadjah Mada)

Article Info

Publish Date
08 Mar 2016

Abstract

The objective of this study is to examine the effect of eco-efficiency on the cost of equity capital. The study hypothesizes that the implementation of eco-efficiency reduces the cost of equity capital. Using manufacturing companies listed on the Indonesian Stock Exchange for the period 2010-2012 as data, and controlling for beta, company size, Book to Market ratio, and leverage; the study finds that the implementation of eco-efficiency may reduce the cost of equity capital. The findings suggest that companies should implement ecoefficency.Keywords: cost of equity capital; eco-efficiency; ISO 14001; environmental accounting

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Journal Info
Journal of Indonesian Economy and Business
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Abbrev

Publisher

Universitas Gadjah Mada

Subject

Economics, Econometrics & Finance

Description

Journal of Indonesian Economy and Business (JIEB) is open access, peer-reviewed journal whose objectives is to publish original research papers related to the Indonesian economy and business issues. This journal is also dedicated to disseminating the published articles freely for international ...