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Applying Structural Equation Modelling to Examine the Impact of Environmental Management Accounting on Financial
Abstract
Environmental management accounting has garnered significant attention from various stakeholders. Enterprises that effectively implement environmental management accounting not only contribute to sustainable development but also enhance organizational performance. This study aims to examine the relationship between environmental management accounting, green innovation, and the financial performance of small and medium-sized enterprises in the context of a developing country like Vietnam. A quantitative research approach was employed to analyze data collected through a structured survey. The dataset comprises responses from 151 small and medium-sized enterprises, with financial managers and management accountants serving as key informants. Data analysis was conducted using the Smart Partial Least Squares software. The findings reveal that environmental management accounting has a direct positive impact on financial performance and an indirect impact through the mediation of green process innovation. While green product innovation exerts a direct impact on financial performance, environmental management accounting appears to have no significant influence on green product innovation. Consequently, green product innovation does not function as a mediating variable in the relationship between environmental management accounting and financial performance. The results underscore the greater significance of green process innovation over green product innovation in driving improvements in the financial performance of small and medium-sized enterprises. These results significantly contribute to the relatively unexplored theoretical relationship between environmental management accounting, green innovation, and the financial performance of small and medium-sized enterprises. Furthermore, the study provides a practical foundation for managers to boost their organizations’ financial performance by practicing environmental accounting and integrating green innovation into business operations.
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DOI: https://doi.org/10.47738/jads.v6i3.728
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