Indonesia’s real estate value potential: the role of green innovation and effective management control systems

Abstract

Green innovation has expanded into the construction and real estate industry, this innovation is seen by industry players as a way to increase the property value of their products, but to achieve this goal an effective management control system is needed. The purpose of this study is to analyze the relationship between green innovation through a management control system to property value in Indonesia. Participants of this study are middle to upper-middle-class entrepreneurs in the construction and real estate industry in Indonesia, especially the island of Java. Java Island was chosen, as it is inhabited by more than 56% of the total population in Indonesia. Hence, it is not impossible that the structure of the Indonesian economy is spatially dominated in Java. There were 200 respondents in this study. The method of this research is quantitative with a structural equation modelling approach. The findings showed that there is a strong relationship between green innovation and property value. Moreover, an effective management control system can also increase future property value creation. Nevertheless, when the control system does not run effectively, green innovation will only harm entrepreneurs.

Keywords

• Management control system
• economic development
• green innovation
• property value
• Real estate economic
• Business, Management and Accounting