Abstract
This study asks whether environmental management accounting (EMA) lifts performance for manufacturing SMEs in Indonesia and whether that lift travels partly through environmental innovation (EI) while being shaped by top management support (TMS) and institutional pressure (IP). Data from 167 decision-makers at manufacturing firms across five Indonesian regions were analyzed with partial least squares structural equation modeling (PLS-SEM) and a 5,000-resample bootstrap. EMA turned out to be positively tied to firm performance (β = 0.523, p < 0.001) and to EI (β = 0.747, p < 0.001) and EI itself carried a positive link to firm performance (β = 0.224, p = 0.001)—a pattern consistent with EI partially mediating the EMA–performance link. Counter to expectations, TMS (β = -0.149, p = 0.002) and IP (β = -0.122, p = 0.028) both weakened rather than reinforced the EI–performance connection. Taken as a whole, the pattern points to environmental information paying off mainly once it is converted into real innovation, with managerial attention and outside pressure adding little when that innovation stays geared toward compliance instead of strategic integration. Bringing EMA, EI, managerial support, institutional pressure and a dual financial-andenvironmental view of performance into one model, the study pushes sustainability accounting research further into resource-limited SME settings.
Keywords: Environmental Innovation, Environmental Management Accounting, Firm Performance, Manufacturing SMEs, Sustainability Accounting.