Enhancing Financial Resilience through Green Innovation: The Mediating Effect of Operational Efficiency in Indonesian Energy Companies

Rival Adha Saleh; Nining Ika Wahyuni; Alfi Arif

doi:10.53515/alqodiri.v24i2.174

Authors

Rival Adha Saleh Universitas Jember, Indonesia Indonesia Author
Nining Ika Wahyuni Universitas Jember, Indonesia Indonesia Author
Alfi Arif Universitas Jember, Indonesia Indonesia Author

DOI:

https://doi.org/10.53515/alqodiri.v24i2.174

Keywords:

Energy companies, Financial resilience, Green innovation, Operational efficiency, Resource-based view

Abstract

Financial resilience has become increasingly important for energy companies facing economic uncertainty, transition risks, and growing sustainability pressures. Although green innovation is widely recognized as a strategic capability for improving environmental and business outcomes, its direct contribution to financial resilience remains unclear, particularly in emerging-market energy sectors. This study examines the effect of green innovation on financial resilience and investigates the mediating role of operational efficiency in energy companies listed on the Indonesia Stock Exchange during the 2021–2025 period. Using a quantitative explanatory design, this study analyzes balanced panel data from 20 energy companies, resulting in 100 firm-year observations. Financial resilience is proxied by cash holding, green innovation is measured using the Green Innovation Disclosure Index, and operational efficiency is proxied by asset turnover. Panel data regression is employed to test the direct effects, while the Sobel test is used to examine the mediation effect. The results show that green innovation does not directly affect financial resilience. However, green innovation has a positive and significant effect on operational efficiency, and operational efficiency positively affects financial resilience. The mediation test confirms that operational efficiency fully mediates the relationship between green innovation and financial resilience. These findings indicate that green innovation cannot be treated merely as environmental disclosure; it becomes financially meaningful only when transformed into an operational capability that improves asset utilization and efficiency. This study extends the Resource-Based View by showing that sustainability-oriented capabilities require an internal conversion mechanism before generating resilience outcomes. Practically, the findings suggest that energy companies should align green innovation initiatives with operational efficiency improvements to strengthen financial stability and long-term sustainability.

References

Andini, Y. S., & Imronudin. (2026). Analysis of financial performance of industrial sector companies through liquidity, leverage and efficiency ratios. Journal of Governance, Taxation and Auditing, 4(3), 639–659. https://doi.org/10.38142/jogta.v4i3.1734

Asni, N., & Agustia, D. (2021). The mediating role of financial performance in the relationship between green innovation and firm value: Evidence from ASEAN countries. European Journal of Innovation Management, 25(5), 1328–1347. https://doi.org/10.1108/EJIM-11-2020-0459

Astuty, N. M. R. K., Darma, G. S., & Maradona, A. F. (2025). Carbon offsetting in Indonesia’s hospitality and tourism sector: Drivers, barriers, and strategic pathways toward net zero emissions. Jurnal Ilmiah Manajemen Kesatuan, 13(6), 5727–5742. https://doi.org/10.37641/jimkes.v13i6.4434

Cheng, Q., Lin, A.-P., & Yang, M. (2025). Green innovation and firms’ financial and environmental performance: The roles of pollution prevention versus control. Journal of Accounting and Economics, 79(1), 101706. https://doi.org/10.1016/j.jacceco.2024.101706

Danarsari, D. N. (2022). The effect of cash holding to firm’s performance during COVID-19 pandemic. In Proceedings of the 3rd Conference on Managing Digital Industry, Technology and Entrepreneurship (CoMDITE 2022). CRC Press. https://doi.org/10.1201/9781003335832-49

Dang, V. T., & Wang, J. (2022). Building competitive advantage for hospitality companies: The roles of green innovation strategic orientation and green intellectual capital. International Journal of Hospitality Management, 102, 103161. https://doi.org/10.1016/j.ijhm.2022.103161

Hao, X., Li, Y., Ren, S., Wu, H., & Hao, Y. (2023). The role of digitalization on green economic growth: Does industrial structure optimization and green innovation matter? Journal of Environmental Management, 325, 116504. https://doi.org/10.1016/j.jenvman.2022.116504

Homayoun, S., Pazhohi, M., & Tamam, H. M. (2024). The effect of innovation and information technology on financial resilience. Sustainability, 16(11), 4493. https://doi.org/10.3390/su16114493

Hu, C., Li, Y., & Zheng, X. (2022). Data assets, information uses, and operational efficiency. Applied Economics, 54(60), 6887–6900. https://doi.org/10.1080/00036846.2022.2084021

İncekara, M. (2022). Determinants of process reengineering and waste management as resource efficiency practices and their impact on production cost performance of small and medium enterprises in the manufacturing sector. Journal of Cleaner Production, 356, 131712. https://doi.org/10.1016/j.jclepro.2022.131712

Juan, S.-J., & Li, E. Y. (2023). Financial performance of firms with supply chains during the COVID-19 pandemic: The roles of dynamic capability and supply chain resilience. International Journal of Operations & Production Management, 43(5), 712–737. https://doi.org/10.1108/IJOPM-04-2022-0249

Juo, W.-J., & Wang, C.-H. (2022). Does green innovation mediate the relationship between green relational view and competitive advantage? Business Strategy and the Environment, 31(5), 2456–2468. https://doi.org/10.1002/bse.3037

Khanchel, I., Lassoued, N., & Baccar, I. (2023). Sustainability and firm performance: The role of environmental, social and governance disclosure and green innovation. Management Decision, 61(9), 2720–2739. https://doi.org/10.1108/MD-09-2021-1252

Khanra, S., Kaur, P., Joseph, R. P., Malik, A., & Dhir, A. (2022). A resource-based view of green innovation as a strategic firm resource: Present status and future directions. Business Strategy and the Environment, 31(4), 1395–1413. https://doi.org/10.1002/bse.2961

Le, T. T. (2022). How do corporate social responsibility and green innovation transform corporate green strategy into sustainable firm performance? Journal of Cleaner Production, 362, 132228. https://doi.org/10.1016/j.jclepro.2022.132228

Le, T. T., Vo, X. V., & Venkatesh, V. G. (2022). Role of green innovation and supply chain management in driving sustainable corporate performance. Journal of Cleaner Production, 374, 133875. https://doi.org/10.1016/j.jclepro.2022.133875

Li, L., Wang, Y., Sun, H., Shen, H., & Lin, Y. (2023). Corporate social responsibility information disclosure and financial performance: Is green technology innovation a missing link? Sustainability, 15(15), 11926. https://doi.org/10.3390/su151511926

Long, H., Feng, G.-F., Gong, Q., & Chang, C.-P. (2023). ESG performance and green innovation: An investigation based on quantile regression. Business Strategy and the Environment, 32(7), 5102–5118. https://doi.org/10.1002/bse.3410

Lou, Y., Zhu, Q., & Liang, C. (2025). Financial technology and firm operational resilience: The roles of supply chain resilience and marketing capability. International Review of Economics & Finance, 104, 104744. https://doi.org/10.1016/j.iref.2025.104744

Momin, M., Dsouza, S., Naqvi, A., & Rini, R. (2026). Environment innovation and ESG performance in EU firms: Exploring the impact of environmental innovation on sustainability outcomes. Business Strategy and the Environment, 35(4), 4925–4941. https://doi.org/10.1002/bse.70411

Nasir, M. N., & Bengi, K. S. (2024). The energy mix dilemma in Indonesia in achieving net zero emissions by 2060. ASEAN Natural Disaster Mitigation and Education Journal, 2(1), 99–113. https://doi.org/10.61511/andmej.v2i1.2024.951

Skinner, A. N., & Valentine, K. (2026). Green patenting and voluntary innovation disclosure. Review of Accounting Studies, 31(2), 864–905. https://doi.org/10.1007/s11142-026-09944-5

Sobel, M. E. (1982). Asymptotic confidence intervals for indirect effects in structural equation models. Sociological Methodology, 13, 290–312. https://doi.org/10.2307/270723

Sriani, D., & Subroto, R. W. (2024). Firm’s resilience before and during COVID-19 pandemic. Journal of Trends Economics and Accounting Research, 4(4), 951–958. https://doi.org/10.47065/jtear.v4i4.1253

Tripopsakul, S. (2025). ESG practices, green innovation, and financial performance: Panel evidence from ASEAN firms. Journal of Risk and Financial Management, 18(8), 467. https://doi.org/10.3390/jrfm18080467

Xie, X., Hoang, T. T., & Zhu, Q. (2022). Green process innovation and financial performance: The role of green social capital and customers’ tacit green needs. Journal of Innovation & Knowledge, 7(1), 100165. https://doi.org/10.1016/j.jik.2022.100165

Zahedi, J., Salehi, M., & Moradi, M. (2021). Identifying and classifying the contributing factors to financial resilience. Foresight, 24(2), 177–194. https://doi.org/10.1108/FS-10-2020-0102

Zhao, Q., Li, X., & Li, S. (2023). Analyzing the relationship between digital transformation strategy and ESG performance in large manufacturing enterprises: The mediating role of green innovation. Sustainability, 15(13), 9998. https://doi.org/10.3390/su15139998

Zheng, J., Khurram, M. U., & Chen, L. (2022). Can green innovation affect ESG ratings and financial performance? Evidence from Chinese GEM listed companies. Sustainability, 14(14), 8677. https://doi.org/10.3390/su14148677