The Role of Environmental Management Accounting in Economic Development through Corporate Product and Process Innovation in East Java Indonesia

I. Nyoman Adi Buana *

Fakultas Ekonomi dan Bisnis, Perbanas Institute, Jakarta, Indonesia.

Eli Royani

Fakultas Ekonomi dan Bisnis, Perbanas Institute, Jakarta, Indonesia.

Rosalia

Fakultas Ekonomi dan Bisnis, Perbanas Institute, Jakarta, Indonesia.

*Author to whom correspondence should be addressed.


Abstract

Aims: This research aims to examine the influence of environmental management accounting on economic development through innovation

Study Design: This research hypothesis testing was carried out using the Partial Least Square (PLS) approach.

Place of Study: The sample data for this research was obtained from 150 respondents. The respondents in this research sample were accounting managers of manufacturing companies in East Java.

Methodology: This research method is quantitative. This research will test the influence of the relationship between variables, namely the independent variable consisting of environmental management accounting as the independent variable (X1). The product innovation variable (Z1) and the process innovation variable (Z2) are mediating variables, and economic development (Y) is the dependent variable.

Results: The result of the test shows that Environmental management accounting (EMA) is proven to have a positive and significant influence on Economic development, with a t value > t table (5.526 > 1.975) and a path coefficient of 0.000. The product innovation is also able to strongly mediate the relationship between environmental management accounting (EMA) and economic development, this finding is supported by the value of t count > t table (2.710 > 1.975) and a path coefficient of 0.000. The latest test results also prove that process innovation is also able to strengthen the relationship between Environmental Management Accounting (EMA) variables and economic development.

Conclusion: Overall, the results of this study support the dimensions of management accounting environment (AML) can increase economic development even though companies carry out product innovation and process innovation activities. This research provides a perspective on possible strategies companies to achieve more effective environmental management accounting and supports company goals related to product innovation and company process innovation.

Keywords: Environmental management accounting, economic development, innovation product, innovation process


How to Cite

Buana , I. N. A., Royani , E., & Rosalia. (2024). The Role of Environmental Management Accounting in Economic Development through Corporate Product and Process Innovation in East Java Indonesia. South Asian Journal of Social Studies and Economics, 21(3), 121–132. https://doi.org/10.9734/sajsse/2024/v21i3789

Downloads

Download data is not yet available.

References

Jaya IMLM, Padilla MAE. Tax Carbon Policy: Momentum to accelerate Indonesia’s sustainable economic growth towards green economy. In Green Economy and Renewable Energy Transitions for Sustainable Development. IGI Global Publishing. 2024; 171–183.

JAYA IMLM, Narsa IM. The nexus between forensic tax and accounting knowledge after pandemic COVID-19 in Indonesia. In A. Pego (Ed.):Handbook of Research on Global Networking Post COVID-19. IGI Global Publishing. 2022; 480–494 Available:https://doi.org/10.4018/978-1-7998-8856-7.ch026

Mignon I, Bankel A. Sustainable business models and innovation strategies to realize them: A review of 87 empirical cases. Business Strategy and the Environment. May, 2022;1–16.

Available:https://doi.org/10.1002/bse.3192

Wang L, Ur Rehman A, Xu Z, Amjad F, Ur Rehman S. Green corporate governance, green finance, and sustainable performance nexus in Chinese SMES: A Mediation Moderation Model. Sustainability (Switzerland). 2023;15(13). Available:https://doi.org/10.3390/su15139914

Rahayu SS, Arbintarso ES, Nansi MR. Penerapan teknologi eco-effisiensi dan green economy dalam upaya menuju UKM Tahu Mandiri Energi Di Kelurahan Margoagung, Kepenawon Seyegan Kabupaten Sleman. Journal of Dedicator Community. 2022;06(3):327–344.

Paul ID, Bhole GP, Chaudhari JR. A review on green manufacturing: It’s Important, Methodology and its Application. Procedia Materials Science. 2014;6(Icmpc):1644–1649. Available:https://doi.org/10.1016/j.mspro.2014.07.149

Idris. Akuntansi Lingkungan Sebagai Instrumen Pengungkapan Tanggung Jawab Perusahaan Terhadap Lingkungan Di Eragreenmarket. Eco-Entrepreneurship Seminar & Call for Paper Improving Performance by Improving Environment 2012 Fakultas Ekonomi, Universitas Negeri Semarang. 2012;2(1):16.

Astuti T, Amyulianthy R, Kaniati R. Green accounting, financial performance toward firm value. Asian Journal of Accounting and Finance. 2022;4(1):1–12. Available:https://doi.org/10.55057/ajafin.2022.4.1.1

Farida I, Sutopo B. The nexus between digital innovation technology and competitive advantage: Mediated By Management Business Strategy. Corporate Governance and Organizational Behavior Review. 2023;7(1):18–28. Available:https://doi.org/10.22495/cgobrv7i1p2

Mcelroy MW. Social innovation capital. Journal of Intellectual Capital. 2002;3(1): 30–39.

Available:https://doi.org/10.1108/14691930210412827

Tang M, Walsh G, Lerner D, Fitza MA, Li Q. Green innovation, managerial concern and firm performance: An Empirical Study. Business Strategy and the Environment. 2018;27(1):39–51.

Available:https://doi.org/10.1002/bse.1981

Agustia D. Innovation, environmental management accounting, future performance: Evidence in Indonesia. Journal of Security and Sustainability Issues. 2020;9(3):1005–1015.

Available:https://doi.org/10.9770/jssi.2020.9.3(24)

Leonard R, Herzig C, Schaltegger S, Viere T. Diffusion of environmental management accounting for cleaner production: Evidence from some case studies. Journal of Cleaner Production. 2019;224:479– 491. Available:https://doi.org/10.1016/j.jclepro.2019.03.227

Gerged AM, Zahoor N, Cowton CJ. Understanding the relationship between environmental management accounting and firm performance: The role of environmental innovation and stakeholder integration – Evidence from a developing country. Management Accounting Research, September. 2023;100865. Available:https://doi.org/10.1016/j.mar.2023.100865

Elhossade SS, Zoubi AA, Zagoub AA. Barriers of environmental management accounting practices in developing country. Risk Governance and Control: Financial Markets and Institutions. 2022;12(1):8– 20. Available:https://doi.org/10.22495/rgcv12i1p1

Gunarathne ADN, Lee KH, Hitigala Kaluarachchilage PK. Institutional pressures, environmental management strategy, and organizational performance: The role of environmental management accounting. Business Strategy and the Environment. 2021;30(2):825– 839.

Available:https://doi.org/10.1002/bse.2656

He R, Baležentis T, Štreimikienė D, Shen Z. Sustainable green growth in developing economies: An empirical analysis on the belt and road countries. Journal of Global Information Management. 2022;30(6):1–15. Available:https://doi.org/10.4018/JGIM.20221101.oa1

Farida I, Setiawan D. Business strategies and competitive advantage: The Role of Performance and Innovation. J. Open Innov. Technol. Mark. Complex. 2022; 8(163):1–16.

Gochhait S, Tripathy PC, Almeida FM De. The role of innovation and knowledge management impact on the organizational performance in a free trade economy. World Review of Science, Technology and Sustainable Development. 2014; 11.

Gunday G, Ulusoy G, Kilic K, Alpkan L. Effects of innovation types on firm performance. International Journal of Production Economics. 2011;133(2):662–676.

Available:https://doi.org/10.1016/j.ijpe.2011.05.014

Greckhamer T, Misangyi VF, Fiss PC. The two QCAs: From a small-N to a large-N set theoretic approach. In Research in the Sociology of Organizations. Emerald Group Publishing Limited. 2013;38.

Available:https://doi.org/10.1108/S0733-558X(2013)0000038007

Yuana R, Prasetio EA, Syarief R, Arkeman Y, Suroso AI. System dynamic and simulation of business model innovation in digital companies: An open innovation approach. Journal of Open Innovation: Technology, Market, and Complexity. 2021;7(4). Available:https://doi.org/10.3390/joitmc7040219

Jaya IMLM. Metode Penelitian Kuantitatif Dan Kualitatif: Teori, Penerapan, dan Riset Nyata (V. Wiratna Sujarweni (ed.); 1st ed.); 2020.

Available:http://www.anakhebatindonesia.com/author-i-made-laut-mertha-jaya-606.html

Sugiyono. Metode Penelitian Kuantitatif, Kualitatif, dan R&D. Alfabeta; 2018.

Likert R. Technique for the measurement of attitudes. Archives of Psychology. 1932;140:1–55.

Hair J, Sarstedt M, Hopkins L, Kuppelwieser VG. Partial LeastSquares Structural Equation Modeling (Pls-Sem) An Emerging Tool In Business Research. European Business Review. 2014;26(2): 106–121.

Héraud JA. A New Approach of Innovation: from the Knowledge economy to the theory of creativity applied to territorial development. Journal of the Knowledge Economy. 2021;12(1):201–217. Available:https://doi.org/10.1007/s13132-016-0393-5