Green Innovation and Sustainable Growth: How Green Reputation Strengthens the Value Creation of Environmental Strategies

Rita Wijayanti; Nashirotun Nisa Nurharjanti; Diana Nur Apni; Lusi Nuraini

doi:10.24843/EJA.2026.v36.i08.p03

Authors

Rita Wijayanti Faculty of Economics and Business Universitas Muhammadiyah Surakarta, Indonesia
Nashirotun Nisa Nurharjanti Faculty of Economics and Business Universitas Muhammadiyah Surakarta, Indonesia
Diana Nur Apni Faculty of Economics and Business Universitas Muhammadiyah Surakarta, Indonesia
Lusi Nuraini Faculty of Economics and Business Universitas Muhammadiyah Surakarta, Indonesia

DOI:

https://doi.org/10.24843/EJA.2026.v36.i08.p03

Keywords:

Basic Materials, Green Innovation, Sustainable Growth, Green Reputation

Abstract

The relationship between green innovation and corporate sustainable growth has produced mixed findings, suggesting that green reputation may help explain the effectiveness of green innovation implementation. This study examines the effect of green innovation on corporate sustainable growth and the moderating role of green reputation in basic materials companies listed on the Indonesia Stock Exchange during 2020–2024. Panel data regression was conducted using Stata 19.0 on an unbalanced panel of 106 firms (472 firm-year observations). Sustainable growth was measured using the Sustainable Growth Rate (SGR). Green innovation was represented by four indicators, while green reputation was measured using 15 environmental disclosure indicators. The results indicate that green innovation has a negative and significant effect on SGR, whereas green reputation positively and significantly moderates this relationship. These findings suggest that the benefits of green innovation for sustainable growth are enhanced when firms possess a strong green reputation, thereby strengthening stakeholder trust.

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