The Impact of Capital Expenditure for Sustainability Technology on Profit per Barrel of Oil Equivalent (BOE) with ROA as a Moderator: A SEM-PLS Approach
Keywords:
Return on Assets, Profit per Barrel of Oil Equivalent, Capital Expenditure for Sustainability Technology, SEM-PLS
Abstract
This study addresses the gap between the theoretical expectation that sustainability investments enhance financial performance and the lack of observed direct impact, raising the question of whether such expenditures directly improve profitability. The study aims to examine the impact of capital expenditure on sustainability technology on profitability, measured by profit per BOE, focusing on the energy company ENI during the 2018–2022 period, with ROA as a moderating variable. Using a quantitative approach with the SEM-PLS method, this research analyzes five years of company data (2018–2022) to explore the relationships between variables. The novelty lies in challenging common assumptions by revealing that the moderating effect of ROA and the direct influence of capital expenditure on profit per BOE are not significant, highlighting an underexplored area in sustainability investment research. The findings indicate that although the model explains 90.9% of the variability in profit per BOE, the anticipated financial benefits of sustainability investments are not directly evident, suggesting a misalignment between theoretical assumptions and practical outcomes. This study concludes that while sustainability investments are essential for long-term objectives, their short-term profitability requires further investigation, providing practical insights for corporate decision-making and policy development.References
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Tekin, B. (2022). What are the internal determinants of return on assets and equity of the energy sector in turkey?. Financial Internet Quarterly, 18(3), 35-50. https://doi.org/10.2478/fiqf-2022-0018
Barney, 1991), keunggulan kompetitif, resurce based view
Bodhanwala, S. and Bodhanwala, R. (2018). Does corporate sustainability impact firm profitability? evidence from india. Management Decision, 56(8), 1734-1747. https://doi.org/10.1108/md-04-2017-0381
Erhinyoja, E. and Marcella, E. (2019). Corporate social sustainability reporting and financial performance of oil and gas industry in nigeria. International Journal of Accounting Finance and Risk Management, 4(2), 54. https://doi.org/10.11648/j.ijafrm.20190402.12
Ghani, E., Rehan, R., Salahuddin, S., & Hye, Q. (2023). Discovering capital structure determinants for saarc energy firms. International Journal of Energy Economics and Policy, 13(1), 135-143. https://doi.org/10.32479/ijeep.13938
Grozdić, V., Marić, B., Radišić, M., Šebestová, J., & Lis, M. (2020). Capital investments and manufacturing firms’ performance: panel-data analysis. Sustainability, 12(4), 1689. https://doi.org/10.3390/su12041689
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2019). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (2nd ed.). Sage Publications.
Hapsari, W. (2019). Do financial performance and firm value can improve corporate responsibility disclosure?. Jurnal Manajemen, 23(1), 150. https://doi.org/10.24912/jm.v23i1.456
Henseler, J., Hubona, G., & Ray, P. A. (2015). Using PLS path modeling in new technology research: Updated guidelines. Industrial Management & Data Systems, 116(1), 2-20. https://doi.org/10.1108/IMDS-09-2015-0382
Janjić, I., Krstić, B., & Milanović, S. (2022). The impact of r&d activity on the business performance of high-technology companies. Facta Universitatis Series Economics and Organization, 253. https://doi.org/10.22190/fueo220707018j
Kim, S., Saha, A., & Bose, S. (2020). Do capital expenditures influence earnings performance: evidence from loss‐making firms. Accounting and Finance, 61(S1), 2539-2575. https://doi.org/10.1111/acfi.12675
Kim, S., Saha, A., & Bose, S. (2020). Do capital expenditures influence earnings performance: evidence from loss‐making firms. Accounting and Finance, 61(S1), 2539-2575. https://doi.org/10.1111/acfi.12675
Kwistianus, H. (2022). The long-term performance of capital expenditure from a fundamental perspective: evidence from indonesia. Asian Economic and Financial Review, 12(12), 1027-1040. https://doi.org/10.55493/5002.v12i12.4667
Kwistianus, H. (2022). The long-term performance of capital expenditure from a fundamental perspective: evidence from indonesia. Asian Economic and Financial Review, 12(12), 1027-1040. https://doi.org/10.55493/5002.v12i12.4667
Macovei, A. (2023). Oil demand and world oil price developments during economic crisis, macro-econometric analysis. European Journal of Accounting Finance & Business, 11(1). https://doi.org/10.4316/ejafb.2023.11111
Moser, P., Okwir, S., & Seifert, R. (2021). Manufacturing management in process industries: the impact of market conditions and capital expenditure on firm performance. Ieee Transactions on Engineering Management, 68(3), 810-822. https://doi.org/10.1109/tem.2019.2914995
Neves, M., Baptista, L., Dias, A., & Lisboa, I. (2021). What factors can explain the performance of energy companies in portugal? panel data evidence. International Journal of Productivity and Performance Management, 72(3), 730-752. https://doi.org/10.1108/ijppm-01-2021-0057
Noor, A., Hartikasari, A., Fakhruddin, I., & Mudjiyanti, R. (2022). The effect of eco-efficiency on firm value with financial performance as a moderating variable. Innovation Business Management and Accounting Journal, 1(4), 117-128. https://doi.org/10.56070/ibmaj.v1i4.21
Rheynaldi, P. (2023). Energy price and stock return: evidence of energy sector companies in indonesia. International Journal of Energy Economics and Policy, 13(5), 31-36. https://doi.org/10.32479/ijeep.14544
Ringle, C. M., Wende, S., & Becker, J. M. (2015). SmartPLS 3. Boenningstedt: SmartPLS GmbH. Retrieved from https://www.smartpls.com
Ross, S., Westerfield, R., & Jaffe, J. (2019). Corporate Finance. McGraw-Hill.
Sari, P. (2023). The effect of retained earnings on trading volume activity (tva) with return on assets as a moderation variable. Balance Economic Business Management and Accounting Journal, 20(2), 108. https://doi.org/10.30651/blc.v20i2.17671
Saunders, M., Lewis, P., & Thornhill, A. (2019). Research Methods for Business Students (8th ed.). Pearson Education.
Sekaran, U., & Bougie, R. (2016). Research Methods for Business: A Skill-Building Approach (7th ed.). Wiley.
Sekaran, U., & Bougie, R. (2016). Research Methods for Business: A Skill-Building Approach (7th ed.). Wiley.
Smith, J. (2020). Green Investment in Energy Sector. Springer.
Tekin, B. (2022). What are the internal determinants of return on assets and equity of the energy sector in turkey?. Financial Internet Quarterly, 18(3), 35-50. https://doi.org/10.2478/fiqf-2022-0018
Published
2024-12-27
How to Cite
Meliza, J., Erlina, E., Fachrudin, K. A., & Irawati, N. (2024). The Impact of Capital Expenditure for Sustainability Technology on Profit per Barrel of Oil Equivalent (BOE) with ROA as a Moderator: A SEM-PLS Approach. Fin Sinergy: Jurnal Manajemen Keuangan, 2(2), 159-167. https://doi.org/10.56457/fin.v2i2.708
Section
Articles
Copyright (c) 2024 Juli Meliza, Erlina Erlina, Khaira Amalia Fachrudin, Nisrul Irawati
This work is licensed under a Creative Commons Attribution 4.0 International License.
