The Effect of Debt Financing and Equity Financing Decisions on Green Accounting: Profitability as a Moderating Variable

Abstract

Environmental management has become increasingly urgent and a global concern, leading governments to mandate all companies implement environmentally friendly practices known as green accounting. The study aims to analyze the impact of debt financing and equity financing decisions on green accounting and to test the moderating effect of profitability. Secondary data was collected from manufacturing firms in the basic industry and chemical sectors listed on the Indonesia Stock Exchange (IDX) from 2021 to 2023. Panel data moderated regression analysis was employed, preceded by a test to determine the most suitable model among the Fixed Effect Model (FEM), Common Effect Model (CEM), or Random Effect Model (REM). The results indicate that debt financing inversly on green accounting while equity financing have a positive significant effect on green accounting. Profitability was not proven to be a moderator of the effect of debt financing and equity financing on green accounting.