The role of green investment in enhancing environmental disclosure in Indonesia

Supriyanto Supriyanto, Mariska Ramadana and Nurul Istiqomah

Asian Review of Accounting, 2025, vol. 33, issue 5, 840-859

Abstract: PurposeThis study aims to investigate the relationship between green investment and environmental disclosure in Indonesia.Design/methodology/approachThis study analyzes data from the 2018 to 2022 period, sourced from companies listed on the Indonesia Stock Exchange (IDX), and applies several statistical methods, such as Coarsened Exact Matching (CEM), to effectively address concerns related to causality and endogeneity while minimizing potential bias.FindingsThe authors find a significant positive association between total green investment and environmental disclosure in the main tests. When companies engaged in green investment are more proactive in disclosing environmental information, they enhance their transparency and legitimacy in the eyes of stakeholders. Furthermore, robustness tests confirm a positive and significant impact of green investment on environmental disclosure, consistent across various models.Originality/valueThis study is the first to examine the impact of green investment on environmental disclosure practices within the Indonesian context using hand-collected data. By focusing on Indonesia, this research offers a novel contribution to the existing literature on corporate environmental practices in emerging markets.

Keywords: Environmental disclosure; Green investment; Legitimacy theory; Sustainability (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:arapps:ara-09-2024-0274

DOI: 10.1108/ARA-09-2024-0274

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