The Role of Environmental Management Accounting as A Mediation of The Influence of Green Product and Green Process Innovation to Improve Sustainability Performance
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Abstract
Purposes: This study investigates the role of environmental management accounting in mediating the influence of green product and green process innovation on the sustainability performance of small and medium enterprises in Indonesia. While sustainable business practices are increasingly crucial, many Indonesian enterprises struggle to meet international export standards due to resource constraints and inadequate environmental compliance.
Design/methodology/approach: Grounded in legitimacy theory, this research employs a quantitative approach to analyze data from enterprises in Bali.
Findings: The findings reveal that both green product and green process innovations positively contribute to sustainability performance. Moreover, environmental management accounting plays a significant mediating role in strengthening these relationships. The study provides empirical support for legitimacy theory in emerging economies and underscores the importance of integrating environmental accounting practices with green innovation strategies.
Implications: For practitioners, the results suggest that adopting environmental management systems can improve both ecological and business outcomes. Policymakers may consider developing targeted support programs to facilitate this transition toward sustainable enterprise development.
Originality: This study lies in integrating green innovation and environmental management accounting (EMA) to improve the sustainability performance of SMEs in Indonesia, especially Bali. This study also extends the application of legitimacy theory to the context of developing countries and highlights the mediating role of EMA, which is still rarely studied, in the relationship between green innovation and sustainability.
Keywords: Sustainability Performance, Green Innovation, Environmental Accounting, Small Enterprises, Legitimacy Theory.
JEL Classification: Q56, M41, L25
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