From Sustainable Innovation Strategy to Sustainable Financial Performance: The Mediating Role of Management Accounting Information Systems

Abstract

Sustainable innovation has become a strategic priority for organizations seeking long-term competitiveness and resilience. This study examines the relationships among sustainable innovation strategy, management accounting information systems, internal process performance, and sustainable financial performance in small and medium-sized enterprises in Pakistan. Data were collected from 329 employees and analyzed using structural equation modeling. The findings reveal that sustainable innovation strategy positively influences management accounting information systems, internal process performance, and sustainable financial performance. Furthermore, management accounting information systems significantly enhance internal process performance and sustainable financial performance while mediating the relationships between sustainable innovation strategy and organizational performance outcomes. These findings suggest that effective management accounting information systems enable organizations to translate sustainability-oriented innovation strategies into improved operational efficiency and sustainable financial performance through timely, accurate, and decision-relevant information. The study contributes to the sustainability and management accounting literature by demonstrating the strategic role of management accounting information systems in enhancing the performance benefits of sustainable innovation. Practically, the findings provide insights for managers, policymakers, and financial institutions seeking to promote sustainability-driven innovation and long-term organizational performance.