The role of profitability in moderating the influence of green investment and financial performance on company value

Research objective: This study aims to analyze the effect of green investment, dividend policy, and leverage on company value with profitability as a moderating variable in companies listed on the IDX ESG Leaders for the 2020–2023 period. Method: Quantitative approach is used in this study with panel data regression method. The sample consists of 12 companies selected by purposive sampling. Data are processed using EVIEWS 10 program to test the direct relationship between variables and the moderation effect of profitability. Results: The results of the study indicate that green investment has no significant effect on firm value, while dividend policy has a negative and significant effect. Leverage also has no significant effect on firm value. Profitability is proven to moderate the effect of dividend policy on firm value, but is unable to moderate the relationship between green investment and leverage on firm value. Practical and Theoretical Contribution/Originality: This study provides theoretical contributions by supporting the Stakeholder and Signaling theories in the context of green investment and dividend policy. Practically, this study suggests that companies need to improve communication related to green investment to increase market legitimacy. Research Limitations: This research is limited to the period 2020–2023, with sample coverage only on companies in IDX ESG Leaders. In addition, several other variables such as company size and governance are not included in the model.