SKRIPSI DIGITAL
Effect of Firm Size and Leverage Toward Profitability of Global Industrial Companies: Corporate Environmental Sustainability as Intervening Variable = Effect of Firm Size and Leverage Toward Profitability of Global Industrial Companies: Corporate Environmental Sustainability as Intervening Variable
The effects of environmental performance on firm’s financial performance still seems to be inconclusive for more than thirty years. Researchers believe that environmental performance may cause additional cost for the firm. This view is based on the premise that improvements on environment and reduction on pollution have been decreasing net margin. This study aims to determine the drivers of Corporate Environmental Sustainability and its effect on profitability by putting Corporate Environmental Sustainability as intervening variable between Firm Size and Leverage toward Profitability. This study is conducted by census in 76 industrial firms listed on S&P 500 FY2021-FY2022. The multiple linear regression and path analysis are used for data analysis technique including descriptive statistical analysis, classical assumption test, hypothesis testing and coefficient determination analysis. Data processing was carried out by using IBM SPSS Version 26. The results of this study indicate that firm size and leverage do not significantly affect corporate environmental sustainability. Firm size and leverage are found to significantly affect profitability while corporate environmental sustainability doesn’t. The result reveals that firm size negatively impacts profit generation and higher leverage ratio tends to increase profitability positively.
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