Eco-efficiency and firm value of Malaysian firms

• Main Authors: Che Ahmad, Ayoib, Osazuwa, Nosakhare Peter
• Format: Article
• Published: Inderscience Enterprises Ltd. 2015
• Subjects: HD28 Management. Industrial Management
• Online Access: http://repo.uum.edu.my/18422/; http://doi.org/10.1504/IJMFA.2015.074902

The objective of the study is to investigate eco-efficiency as a proxy for environmental policy and its effect on the overall value of the firm. The study adopts Ohlson's value relevance model in explaining how value relevant the concept of eco-efficiency is to the firm. The sample comprises 667 non-financial firms quoted on the Bursa Malaysia as at 2013. The result of the analysis reveals a positive association existing between eco-efficiency and the value of the firm, indicating that Malaysian firms engaging in eco-efficiency are performing better in terms of firm value than firms not engaging in eco-efficiency. This study is a pioneering study examining eco-efficiency from a developing country perspective, specifically from the Malaysian environment.The findings of the study will prove to shareholders and investors that eco-efficient firms can increase its earnings in the future, and therefore such a policy will not affect the financial aim of the company.