THE STRATEGIC ROLE OF GCG IN MODERATING THE EFFECT OF IOS AND ENVIRONMENTAL PERFORMANCE ON FIRM VALUE

Abstract

The purpose of this study is to investigate the impact of the investment opportunity set (IOS) and environmental performance on firm value, with good corporate governance (GCG) serving as a moderating variable. The method used in this study is quantitative, utilizing secondary data obtained from annual reports and sustainability reports of manufacturing companies listed on the Indonesia Stock Exchange for the period 2021–2025. Purposive sampling was applied to determine the sample, resulting in 60 companies. For data analysis, panel data regression and Moderated Regression Analysis (MRA) were used. The findings of this study indicate that the IOS and environmental performance have a significant positive influence on firm value. Additionally, GCG enhances the influence of environmental performance on firm value but does not act as a moderator for the impact of the IOS on firm value. These results indicate that investors not only consider a company’s growth potential but also pay attention to environmental responsibility and good governance standards when assessing corporate value. This study contributes to the development of signaling theory and stakeholder theory by reinforcing the aspects of corporate governance and sustainability. The limitations of this study include a sample focused solely on the manufacturing sector and a short observation period. Future research is recommended to expand the sample to other industrial sectors, extend the observation period, and explore alternative moderating variables.

Keywords: Investment opportunity set, Environmental performance, Good corporate governance, Firm Value