The role of firm size on environmental performance in the developing country

Abstract

The balance between economic development and environmental performance is very important for human life (Zhang, Geng, & Wei, 2022; Haldorai, Kim, & Garcia, 2022). This study aims to examine the role of firm size on the relationship between the type of industry and the audit committee on environmental performance. The sample consisted of 198 units of analysis. The method used descriptive analysis and ordinal regression analysis with an absolute difference value test for moderation. The results show the type of industry and the audit committee positively affect environmental performance. In addition, firm size could moderate the relationship between the type of industry and environmental performance. However, firm size failed to moderate the relationship between the audit committee and environmental performance. This research limitation is only covered the Rating Program in Environment Management Performance (PROPER) firms. This research is the first model to investigate the role of firm size on the relationship between the type of industry, the audit committee, and environmental performance. This paper gives more knowledge for government to make strict policies related to the environmental problem to avoid severe natural damage in Southeast Asia, especially in Indonesia. This study contributes to the literature on company’s management practices. A firm should encourage the audit committee’s effectiveness and improve the asset to achieve better environmental performance.