RENEWABLE SOCIO-ECONOMIC INCLUSION IN PREDICTING ECONOMIC SUSTAINIBILITY: EMPIRICAL ANALYSIS FROM INDONESIA
Abstract
The study aims to identify various sustainable initiatives undertaken by Indonesia's manufacturing and services industry, which examines the 50 largest companies listed on the IDX. Furthermore, this study shows the impact of Social Sustainibility (SS), Environmental Sustainibility (Env-S), Financial Sustainibility (FS) on Economic Sustainibility (ES) with financial performance as a variable control. This study uses a descriptive quantitative design method and clause. The sample consists of a series of time series data on the results of reporting on the disclosure of environmental conservation responsibilities of companies listed on the IDX and data for the last 24 years of Foreign Investment (PMA) and Domestic Investment (PMDN). Multiple linear regression analysis was used to test the influence of SS, Env-S, FS on economic sustainability. FS, which is a variable control, is intended as a constant variable to minimize the influence of other variables. The main findings of this study are that director policies and donations have a significant positive influence on the financial sustainability of companies; However, the green house and climate bond factors were not found to have a significant sustainability impact and the results were negative; Then, the domestic credit and ATM factors have a significant positive impact on sustainability on the Employee's utilization ratio and the Human Development Index. The implications of this study have been classified into factual novelty categories; The implications of the theorical environmental ethic, practical managerial and policy brief of the green economy to encourage the sustainability of the national economy.
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Sokołowski, M. M. (2019). When black meets green: A review of the four pillars of India’s energy policy. Energy Policy, 130(10), 60–68. https://doi.org/10.1016/j.enpol.2019.03.051
Thornton, L. M., Autry, C. W., & Gligor, D. M. (2018). Does socially responsible supplier selection pay off for customer firms? A cross-cultural comparison University of Tennessee. Journal of Supply Chain Management, 49(3), 66–89. https://doi.org/10.1111/jscm.12014
Allouche, J., & Laroche, P. (2005). A Meta-analytical investigation of the relationship between corporate social and financial performance. Revue de Gestion Des Ressources Humaines, 57(1), 18. https://ideas.repec.org/p/hal/journl/hal-00923906.html
Andrés, M. R., Ramos, M., Ángel, M., Castillo, S., & Danvila, I. (2019). Exploring sustainability, good governance, and social responsibility in small and medium enterprises. August, 261, 1–18. https://doi.org/ 10.1002/csr.1849
Carayannis, E. G., Grigoroudis, E., Sindakis, S., & Walter, C. (2014). Business model innovation as antecedent of sustainable enterprise excellence and resilience. Journal of the Knowledge Economy, 5(3), 440–463. https://doi.org/10.1007/s13132-014-0206-7
Chang, D., & Kuo, L. R. (2008). The effects of sustainable development on firms. Financial Performance – an Empirical Approach. Sustainable Development, 380 (January), 365–380. https://doi.org/10.1002/sd
Chouaibi, J. (2021). Innovation and financial performance in manufacturing companies: an empirical study Tunisian. Journal of the Knowledge Economy, 12(4), 1870–1890. https://doi.org/10.1007/s13132-020-00692-8
Cortez, M. A. A., & Cudia, C. P. (2019). Environmental Innovations and financial performance of Japanese automotive and electronics companies. Green Growth: Managing the Transition to a Sustainable Economy, 1(1), 173–190. https://doi.org/10.1007/978-94-007-4417-2
Dhar, S., Pathak, M., & Shukla, P. R. (2020). Transformation of India’s steel and cement industry in a sustainable world. Energy Policy, 137(1), 111104. https://doi.org/10.1016/j.enpol.2019.111104
Din, S. U., Khan, M. Y., Khan, M. J., & Nilofar, M. (2022). Nexus between sustainable development, adjusted net saving, economic growth, and financial development in south asian emerging economies. Journal of the Knowledge Economy, 13(3), 2372–2385. https:// doi.org/10.1007/s13132-021-00818-6
Earnhart, D. (2018). The Effect of Corporate Environmental Performance on Corporate Financial Performance. Social Responsibility Journal, 14(4), 895–916. https://doi.org/10.1108/SRJ-12-2016-0212
Girón, A., Kazemikhasragh, A., Cicchiello, A. F., & Panetti, E. (2021). Sustainability Reporting and Firms’ Economic Performance: Evidence from Asia and Africa. Journal of the Knowledge Economy, 12(4), 1741–1759. https://doi.org/10.1007/s13132-020- 00693-7
Hafiz M. Sohail, Hossam Haddad, Mirzat Ullah, Nidal Mahmoud Al-Ramahi, N. F. H. and A. M. K. A. (2024). Optimizing sustainable high-quality economic development throughGreen Finance with robust spatial estimation. COGENT ECONOMICS & FINANCE, 12(1), 1–14. https://doi.org/doi.org/10.1080/23322039.2024.2363466
Jayasundara, S., Worden, D., Weersink, A., Wright, T., Vanderzaag, A., Gordon, R., & Wagner-riddle, C. (2019). Improving farm profitability also reduces the carbon footprint of milk production in intensive dairy production systems. Journal of Cleaner Production, 229(2), 1018–1028. https://doi.org/10.1016/j.jclepro. 2019.04.013
Jie Han, Qinglan Zheng, Danxi Xie, Anas Muhammad, C. I. (2023). The construction of green finance and high-quality economic development under China’s SDGs target. Environmental and Pollution Research, 30, 111891–111902. https://doi.org/https://doi.org/10.1007/s11356-023-28977-w
Lartey, T., Yirenkyi, D. O., Adomako, S., Danso, A., Amankwah, Amoah, J., & Alam, A. (2020). Going green, going clean: Lean-green sustainability strategy and firm growth. Business Strategy and the Environment, 29(1), 118–139. https://doi.org/10.1002/bse.2353
Liu, Z. (2020). Unraveling the complex relationship between environmental and financial performance ––– A multilevel longitudinal analysis. Intern. Journal of Production Economics, 219(7), 328–340. https://doi.org/10.1016/j.ijpe.2019.07.005
Lozano, R., & Reid, A. (2018). Energy research & social science socially responsible or reprehensible ? Investors, electricity utility companies, and transformative change in Europe. Energy Research & Social Science, 37(April 2017), 37–43. https://doi.org/10. 1016/j.erss.2017.09.018
Muhammad Imran, Z. J. (2023). Exploring the relationship between financial inclusion and natural resource utilization in QUAD economies. Environmental Science and Pollution Research, 31(30), 111891–111902. https://doi.org/https://doi.org/10.1007/s11356-023-28977-w
Mohammad Shahfaraz Khan, Mohd Yousuf Javed, Mohammad Hasan. 2022. “Do Sustainable Investments Propel the National Economy? Evidence from Manufacturing and Service Sectors in India.” Cogent Economics & Finance 1–17. doi: 10.1080/23322039.2022.2114172.
Noh, Y. (2019). sustainability the effects of corporate green efforts for sustainability : An event study approach. Sustainability, 11(15), 4073. https://doi.org/10.3390/su11154073
Nor, N. M., Bahari, N. A. S., Adnan, N. A., Kamal, S. M. Q. A. S., & Ali, I. M. (2016). The Effects of Environmental Disclosure on Financial Performance in Malaysia. Procedia Economics and Finance, 35 117–126. https://doi.org/10.1016/s2212-5671(16) 00016-2
Nunes, S., Lopes, R., & Fuller-Love, N. (2019). Networking, Innovation, and Firms’ Performance: Portugal as Illustration. Journal of the Knowledge Economy, 10(3), 899–920. https://doi.org/10.1007/s13132-017-0508-7
OJK. (2022). Taksonomi Hijau Indonesia. Otoritas Jasa Keuangan (OJK). www.ojk.go.id
Olajumoke Rebecca Ogunniyi, Abiodun Funso Okunlola, Michael Akinade, and Alatise &. Rafiu Adewale Aregbeshola. 2023. “No TitleSocio-Economic Inclusion and Sustainable Economic Growth: Empirical Analysis of Nigeria and South Africa.” Empirical Analysis of Nigeria and South Africa, Cogent Economics & Finance, 11(1):1–19. doi: 10.1080/23322039.2022.2163077.
Pekovic, M. A. D. (2012). Environmental standards and labor productivity : Understanding the mechanisms that sustain sustainability. Journal of Organizational Behavior, 33(2), 193–215. https://doi.org/10.1002/job
Quartey, S. H., & Oguntoye, O. (2021). Understanding and promoting industrial sustainability in Africa through the triple helix approach: a conceptual model and research propositions. Journal of the Knowledge Economy, 12(3), 1100–1118. https://doi.org/10.1007/s13132-020-00660-2
Shahab Ud Din, Muhammad Yar Khan, Majid Jamal Khan &. Memoona Nilofar. 2022. “No TitleNexus Between Sustainable Development, Adjusted Net Saving, Economic Growth, and Financial Development in South Asian Emerging Economies.” Journal of Knowlegde Economy 13:2372–2385.
Sokołowski, M. M. (2019). When black meets green: A review of the four pillars of India’s energy policy. Energy Policy, 130(10), 60–68. https://doi.org/10.1016/j.enpol.2019.03.051
Thornton, L. M., Autry, C. W., & Gligor, D. M. (2018). Does socially responsible supplier selection pay off for customer firms? A cross-cultural comparison University of Tennessee. Journal of Supply Chain Management, 49(3), 66–89. https://doi.org/10.1111/jscm.12014
Published
2024-09-26
How to Cite
ARIYANI, Diyah et al.
RENEWABLE SOCIO-ECONOMIC INCLUSION IN PREDICTING ECONOMIC SUSTAINIBILITY: EMPIRICAL ANALYSIS FROM INDONESIA.
Proceedings of the International Conference of Islamic Economics and Business (ICONIES), [S.l.], v. 10, n. 1, p. 855-866, sep. 2024.
ISSN 2541-3333.
Available at: <https://conferences.uin-malang.ac.id/index.php/iconies/article/view/2954>. Date accessed: 15 may 2026.
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Articles
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