THE ROLE OF FINANCIAL PERFORMANCE IN MEDIATED RELATIONSHIP BETWEEN CARBON EMISSION LEVEL, CARBON EMISSION DISCLOSURE, AND INVESTOR BEHAVIOUR

Gita Ayu Tiara, Rahmasari Fahria

Abstract


This study aims to explore the role of financial performance in the mediated relationship between carbon emission levels and carbon emissions disclosure on investor behavior in the form of abnormal returns. The study sample is a non-financial company listed on the Indonesian Stock Exchange from 2018- to 2020 and the samples were taken using the purposive sampling method. This study finds that carbon emission level and carbon emission disclosure don’t have any significant impact on investor behavior in form of stock’s abnormal returns, this study also finds that financial performance (ROE) doesn’t significantly affected by carbon emission level and carbon emission disclosure and it’s also don’t have any significant effect on stock’s abnormal returns. Therefore this study finds that financial performance (ROE) cannot mediate the relationship between carbon emission level, carbon emission disclosure, and investor behavior. However, this study has flaws and limitations, such as unstable economic conditions due to covid-19 in Indonesia and limited data resources that lead to a reduction of the year sample. For further research, this study suggests using a control variable for the return of equity variable.


Keywords


Carbon emissions, carbon emissions disclosure, financial performance, abnormal returns

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