DIFFERENTIATION STRATEGY, ENVIRONMENTAL PERFORMANCE, AND ENVIRONMENTAL COST ON FIRM VALUE

Abstract

This study aims to determine the effect of differentiation strategy, environmental performance, and environmental costs on firm value. The sample obtained in this study was 40 companies listed on the Indonesia Stock Exchange through the purposive sampling method during the period 2019 - 2021. Data was obtained from annual reports and sustainability reports through www.idx.co.id. Data was analyzed using multiple regression analysis to test the hypothesis with 5% significance level. The results showed that the differentiation strategy on key activity components (main product) and environmental costs has a positive effect on firm value and environmental performance has a negative effect on firm value. While the differentiation strategy on supporting activity components (supporting services) has no effect on firm value. From the results of the study, it can be concluded that differentiation strategy on key activity components and the environmental costs could be a consideration for companies to increase their firm value.