What is Behind Green Industry Motive to Maintain Rural Areas?

Abstract

The environmental damage is one of the essential factors that determine of disasters. Industrial activities that are mostly in urban areas are contributors to this problem. These activities often exploit resources from rural to an urban area. So that industry is required to be actively involved in maintaining the rural area alike implementing a green industry thatcan be represent through the application of green accounting which is disclose environmental information. The purpose of this paper is to explain the involved an industry in rural areas. Especially, to explain benefit and industry motive. This study uses legitimacy theory and stakeholder theory as a theoretical framework to explain the role of industry. The research method used a quantitative approach and seconder data from Indonesia stock exchange with the LQ45 index as a sample. The data analyzed using multiple regression and path analysis to examine environmental factors that influence the economic performance. The result of this study shows that environmental performance and environmental cost has an influence on environmental disclosure then influence economic performance. Furthermore, it can be identified that the company get the benefit from environmental performance and environmental cost. Also, Economic performance is a reason why an industry involved in maintaining the rural area.