Title: Eco-efficiency and firm value of Malaysian firms

Authors: Ayoib Che-Ahmad; Nosakhare Peter Osazuwa

Addresses: School of Accountancy, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah, Malaysia ' School of Accountancy, Universiti Utara Malaysia, 06010 UUM Sintok, Kedah, Malaysia

Abstract: 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.

Keywords: accounting; eco-efficiency; ISO 14001; firm value; value relevance; environmental policy; Malaysia; non-financial firms; developing countries; environmental management systems.

DOI: 10.1504/IJMFA.2015.074902

International Journal of Managerial and Financial Accounting, 2015 Vol.7 No.3/4, pp.235 - 245

Received: 12 Feb 2015
Accepted: 09 Dec 2015
Published online: 23 Feb 2016 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article