1 Introduction

Environmental issues have gained increasing importance and have become a subject of heightened academic interest in developed and developing countries and even the least developed countries, such as Yemen [1, 2]. This heightened significance can be linked to the detrimental effects these concerns have on the economic status and strategic goals of these countries [3,4,5], including Yemen. Being among the least developed nations, Yemen encounters obstacles related to environmental sustainability, notably reflected in its low ranking of 47th among Asian countries in the Environmental Performance Index, as noted by Latif et al. [6]. Besides, the pollution stemming from various sources such as the energy sector, industries, and conflict in Yemen carries significant social, economic, and environmental consequences. Furthermore, the Environmental Performance Index (EPI) report in SEDAC [7] disclosed that the Middle East and North Africa (MENA) region countries are ranked quite low as compared to other countries which showed their poor environmental performance. The EPI classified MENA countries into two groups; the first one comprised of those nations which are doing well in terms of environmental performance as compare to other countries in a cluster like Alge-ria, Egypt, Morocco, Tunisia, Lebanon, Syria, Iran, and Jordan, while the second group includes fossil fuel–producing countries like Bahrain, Libya, Kuwait, Qatar, Oman, UAE, Saudi Arabia, Sudan, and Yemen, and these countries are ranked in lowest environmental performance ranking with the highest greenhouse gas emission of all the clusters [8]. This emphasizes the pressing necessity to tackle environmental issues, particularly considering Yemen’s strategic advantageous position and its possible ramifications on the wider region.

In fact, product manufacturing processes by numerous organizations results in a substantial amount of waste, commonly generated when using raw materials, energy, water, and so on [9]. As per Somji et al. [10], the rising prominence of ecological regulations and consumer demands for sustainable products compel businesses to adopt ecological standards to maintain competitiveness in the global market. This necessitates implementing management systems that can pinpoint performance indicators for addressing environmental challenges and capitalizing on opportunities for sustainability. Therefore, contemporary enterprises increasingly depend on ecological policies for their operations, highlighting the requirement for management systems that can effectively balance environmental and economic considerations [11, 12]. In this regard, management accounting practices (like environmental management accounting) are valuable because they offer managers access to crucial data that aids in making decisions. This data may be created in several ways, each with its own set of controls [13]. According to Zandi and Lee [12], ecological management accounting (EMA) practices are regarded as effective tools for businesses to communicate their environmentally responsible goals and successes, emphasizing the need to integrate environmental sustainability across a variety of stakeholders. EMA is described as a system that enables the identification, quantification, examination, and understanding of a company’s environmental aspects by utilizing ecological planning and control methods [14].

While it is widely acknowledged that EMA significantly contributes to improving EP as noted by Bresciani et al. [15], there remains uncertainty about the mechanisms through which EMA enhances EP [16]. Furthermore, past studies concerning EMA practices and EP have produced divergent findings, underscoring the need for additional research [17]. To comprehend the mechanisms underlying this connection and the potential direct or indirect impacts of EMA practices on EP, it is crucial to focus on variables that might mediate this relationship. By this approach, the present study places its primary focus on exploring the potential mediating role of green innovation (GI).

Recent research highlights that the incorporation of EMA and innovation is a crucial factor in boosting EP [18, 19]. This is a result of the possibility that companies may decrease their adverse ecological effects, such as water and energy waste, via the combination of EMA and innovation [20]. The adoption of EMA enables innovation in the production process, which, in turn, guides the organization towards enhanced performance. The data provided by EMA can stimulate innovation within a firm and enhance its overall performance [21]. As a result, businesses now have more chances than ever to boost their environmental performance with “green” goods. The manufacturing process requires innovation since market research reveals that green innovation for the environment leads businesses to better processes [22]. Sustainable GI indicates the implementation of novel approaches and management frameworks that are aimed at addressing environmental issues within the manufacturing process [23]. According to [22], market studies focusing on environmentally friendly products often result in improved environmental processes. Therefore, innovation within the production process is imperative. The use of EMA allows innovation in the production process, which in turn directs the organization towards improved EP. However, prior research has disregarded GI's crucial function in translating EMA practices into improved EP. To address the current shortcomings in the literature, this research aims to explore the influence of EMA on EP, specifically examining the mediating role of GI. As a result, the following research questions are formulated:

RQ1. Does EMA affect EP?

RQ2. Does GI act as a mediator in the relationship between EMA and EP?

The surveyed companies are SMEs engaged in manufacturing in Yemen. Although the acknowledged significance of EMA in enhancing corporate EP, various research has pointed out that SMEs show limited enthusiasm towards environmental practices and sustainability due to their precarious financial circumstances [24], particularly in developing nations. Manufacturing companies continue to encounter intricate hurdles in comprehending and acknowledging environmental issues [25], establishing robust governance frameworks [26], rectifying shortcomings in technological infrastructure and skilled labor, and maneuvering through the complexities of designing and executing EMA systems [27]. These obstacles have led certain manufacturing SMEs to withdraw from the market [28, 29]. Consequently, Yemen presents a conducive setting for investigating this issue, with the potential outcomes yielding valuable lessons for researchers and practitioners alike to inform decision-making processes.

This research offers two main contributions. First, it explores whether GI mediates between EMA and EP. By adopting EMA practices, companies can be prepared to innovate their operations, which in turn decreases their environmental expenses, boosts productivity, and improves the company's public image as a green or eco-friendly one. Second, this research focuses on SMEs within the framework of the least developed countries, like Yemen, when examining the EMA-EP link through GI. While certain studies have investigated the correlation between EMA and EP, their attention has predominantly been on developed and developing nations [6]. Conversely, with increasing ecological apprehensions regarding the ecological effects of manufacturing SMEs, their involvement in ecological methods remains below standard [30], indicating the need for additional research.

2 Theoretical background and hypotheses

Guided by the Natural resource–based view (NRBV) [31], a conceptual model that illustrates the relationships among EMA, GI, and EP has been developed (Fig. 1). According to Hart [31], companies ought to actively improve and harmonize their engagement with the surrounding natural ecological. This goal can be achieved through the implementation of three separate yet interconnected ecological approaches “diminishing pollution, embracing product stewardship, and advocating for sustainable development” [32]. Indeed, the NRBV posits that the natural environment plays a pivotal role, in motivating enterprises to develop practices and processes aimed at preventing pollution, reducing waste, and promoting ecologically friendly industrial methods [33], and the aforementioned efforts are pursued to achieve enhanced EP and GI results. The concept of NRBV emphasizes the ability of enterprises to develop and leverage resources and competences to effectively utilize natural resources [32]. Additionally, it promotes the cultivation of skills focused on preventing pollution, minimizing waste, and promoting ecologically friendly manufacturing techniques [33]. Drawing on NRBV, this study considers EMA as a critical resource capable of enabling a company to gain a lasting competitive edge. This may be accomplished by (i) amplifying the impact of EMA on GI; and (ii) integrating GI to convert the company’s EMA practices into EP. Consequently, NRBV provides a fitting theoretical framework for exploring the ways in which resources and capabilities affect EP.

Fig. 1
figure 1

Source: Authors’ own work

Research model.

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2.1 Environmental management accounting

The subject of EMA has attracted significant attention within the realm of environmental management. Its purpose is to collect, analyze, and use financial data about the environment to assist decisions for companies, accounting methods include the systematic monitoring, tracing, and management of expenses, revenues, and cost reductions associated with a firm's ecological efforts [15]. According to Jasch [34], EMA practices put a special focus on accounting for expenditures connected to the environment. The importance of environmental-related expenses has grown significantly, particularly in the context of improving waste administration, Consequently, new accounting methods, such as EMA practices, have emerged [35]. Conventional approaches that were previously employed did not consider the costs of environmental protection in the decision-making process or incorporate integrated technologies [15]. As a result, a more methodical strategy for quantifying the financial costs of environmental consequences was required [36]. Because management decisions vary greatly, EMA consequently includes a broad variety of accounting instruments [37]. EMA is a term that comprises both monetary and physical aspects. Monetary EMA specifically deals with the financial representation of environmental aspects in organizational activities [15]. It addresses issues of identifying and accounting for costs and gains that emerge from the company's environmental impact, which makes it the basis for the majority of the decisions that are made by the internal management of the organization [38]. Physical EMA is a discipline that examines how an organization affects the natural environment, measured in relation to concrete physical quantities [15]. The importance of EP measurement is growing, and stakeholders recognize this. Therefore, businesses should employ methods that precisely measure environmental factors [ibid]. This, in turn, ignited a growing interest in environmental accounting, an integrated strategy for environmental management that can be greatly aided by EMA practices implemented in response to environmental concerns [39].

2.2 Green innovation

The significance of GI is recognized as a significant factor influencing the environmental and economic successes of both organizations and communities [40]. According to Al-Hakimi et al. [3], GI reflects a transformation in production methods and technologies aimed at creating innovative products that contribute to sustainable development, considering economic, ecological, and social factors. GI enhances procedures and operations that are consistent with ecological product design and lessens the industry's negative effect on the environment across all sectors [41]. To accomplish the objective of sustainable development, GI involves the creation of novel goods and procedures that enhance value for both customers and businesses, while simultaneously minimizing adverse environmental consequences [42]. Additionally, Yusr et al. [43], concluded that companies focused on GI, including those incorporating environmental considerations into their products and processes, can attain heightened levels of sustainability in the firm by minimizing waste and bolstering productivity. Many scholars indicate that GI encompasses two primary approaches: innovation in green products and innovation in green processes e.g. [44, 45]. The primary strategy aims to modify product designs by integrating non-toxic components or biodegradable materials into the manufacturing process to minimize environmental waste and enhance energy efficiency [46, 47]. The other encompasses a company's efforts to decrease energy usage during manufacturing and turn trash into valuable products [48, 49].

2.3 Environmental performance

EP reflects “the organization’s behavior vis-a-vis natural environment in terms of how it goes about consuming available resources with a strong commitment to having a strict check on pollution emissions, if any” [50]. Likewise, environmental sustainability is a process of preserving the quality of the environment performance in the long term [29]. Therefore, environmentally sustainable performance concerns the environmental impact of organizational activities. EP measures a company’s ability to reduce pollution, reduce waste, prevent the use of hazardous substances and reduce environmental accidents [50]. Therefore, businesses should use methods that accurately assess environmental factors [7]. Such this approach has sparked an increasing interest in environmental accounting, a comprehensive strategy for environmental management significantly supported by EMA practices developed in response to environmental issues [39].

2.4 Environmental management accounting and environmental performance

The topic of EMA is a critical subject of discussion because it aids management in identifying and utilizing the necessary information to improve EP. From the perspective of managerial accounting, EMA embodies an integration of cost and financial accounting methodologies designed to minimize environmental footprints, manage risks, and decrease expenses [15]. EMA is seen as the inner management tool utilized by the organization to fulfill its ecological obligations [51]. EMA allows companies to identify potential ecological by functioning as a tool for applying financial controls and strategies for ecological management. This, in turn, enables businesses to assess, manage, and report their EP [15].

Over the last years, numerous authors have explored the relationship between EMA and EP in both developed and developing countries. For example, Henri and Journeau [52], in their earlier research utilizing survey data from a sample of Canadian manufacturing firms, found a positive correlation between environmentally sustainable practices and business performance. The adoption of EMA is associated with enhanced control and decision-making processes. At the developing country level, a study by Asiaei et al., [53], which utilized survey data from 106 chief financial officers (CFOs) of publicly listed companies in Iran, demonstrated a positive association between the use of EMA and EP. In addition, the results of the study of Bresciani et al., [15], based on an analysis of data collected from textile, chemical, and automobile industry companies in Pakistan, revealed that EMA is positively related to EP. Moreover, Hasan et al. [51], indicated that EMA significantly improves EP. From the NRBV perspective, the incorporation of ecological practices (EMA in this case) would ultimately result in environmental benefits, assisting businesses in attaining their operational excellence goals and acquiring a competitive edge [33]. EMA serves as a valuable tool for overseeing EP and monitoring environmental costs [15, 54]. Additionally, EMA is considered a method for revealing information that aids firms in attaining EP [55]. Accordingly, we assume that:

H1. EMA is positively associated with EP.

2.5 Environmental management accounting and green innovation

To accomplish organizational objectives while protecting the natural environment, EMA integrates production capabilities, information technology, as well as knowledge in management and accounting [22]. Ferreira et al. [18], demonstrated that data derived from EMA can be utilized to develop processing products and services that are more efficient. Incorporating EMA implementation can yield significant insights into the life cycle of a product (Life Cycle Analysis), which can subsequently undergo assessment and innovation [9]. Studies emphasize that businesses that generate social and environmental data have more robust internal control systems, which in turn leads to more informed and deliberate decision-making [56]. New data spurs product creation, technical advancement, and cost reduction, EMA usage is related to product and process innovation, which may boost firms’ competitiveness [15].

Based on NRBV framework and existing studies, executives at environmentally conscious organizations invest in and implement environmental practices (such as EMA) to develop environmentally sustainable goods that fulfil client requirements [57]. According to Saeidi et al. [58], a corporation may gain a competitive edge via innovation if its new products or services are better than its competitors' offerings, EMA provides an even greater competitive advantage and enhances overall business performance by increasing innovation. EMA enables organizations to adopt production practices and procedures that are eco-friendly, aiming to minimize detrimental waste [59]. EMA facilitates the adoption of green solutions and activities (GI in this case), to enhance the EP of organizations and attain a strong competitive position in the market [60]. Accordingly, we assume that:

H2. EMA is positively associated with GI.

2.6 Green innovation and environmental performance

EP pertains to the efforts made by companies to meet and surpass societal expectations concerning their impact on the natural environment [51, 61]. It focuses on the ecological impacts of organizational actions, products, and the utilization of resources in a manner that is consistent with ecological rules [62]. Research suggests that businesses and organizations may enhance their environmental practices by giving top priority to ecological sustainability in their operational activities and product development, as well as by improving green processes, product innovation, and the quality of environmentally friendly goods [63]. Proactive ecological management is linked to GI in environmentally friendly technologies and exerts a beneficial influence on ecological outcomes [64]. Moreover, the presence of strategic proactivity empowers firms to leverage the benefits of being the first to enter a market and actively participate in environmental conservation efforts [65]. Indeed, GI reduces waste and expenses, alleviating the companies’ ecological impact and improving financial and social performance. [66]. Prior research suggests that GI is not merely a reactionary response to stakeholder concerns within an organization. Instead, it is viewed as a proactive organizational objective and practice aimed at improving EP to gain a competitive edge [67, 68]. Through GI, companies can improve their EP and cultivate positive relationships with main stakeholders [68, 69]. According to, we hypothesize that:

H3. GI is positively related to EP.

2.7 Mediation of Green Innovation

Although prior research has confirmed that EMA has a direct effect on EP (e.g., [15, 54]), there is a significant lack of attention given to investigating the potential role of GI as a mediator in this connection [51]. EMA assists in quantifying, managing, and revealing corporate ecological performance [70]. It helps businesses fulfill their ecological responsibilities and directly recognize the economic benefits linked to enhanced ecological and financial performance [18]. Furthermore, EMA plays a vital function in monitoring environmental expenditures and documenting EP [15]. EP is significantly influenced by environmentally friendly practices [51]. However, this operation is facilitated by GI that plays a pivotal role in boosting EP and is linked to environmental management agendas [64]. GI not only mitigates the detrimental ecological effects of the company but also bolsters the firm's financial and social performance by minimizing waste and decreasing expenses [66]. Indeed, [71], claims that organizations may enhance quality and save costs via the innovation process. In this study, innovation is viewed as one of the green activities supported by EMA that contributes to enhancing the EP of organizations and gaining a strong competitive position in the market [72]. Accordingly, we hypothesize that:

H4. GI significantly mediates between EMA and EP.

The study model depicted in Fig. 1 demonstrates the correlation between EMA and EP, with GI acting as a mediating component.

3 Methodology

3.1 Sample and data collection

To accomplish the objectives of this present research, we utilized a quantitative survey-based approach with data collected from managers/owners of SMEs in Yemen, as the unit of analysis for this research. The study's target population includes a range of manufacturing sectors, including “food and beverage, packaging, furniture, plastics, and textiles, as well as petrochemical and chemical industries”. In this study, SMEs were defined according to the “number of employees” criteria presented by the Yemeni Ministry of Industry and Trade [72]. Specifically, small firms were viewed as “those with 4–9 employees”, while medium firms were viewed as “those with 10–50 employees” [72].

From the database maintained by [72], the sample of SMEs from various manufacturing sectors was chosen using “the simple random sampling method”. In total, there are around 2,106 SMEs in the manufacturing sector across Yemen. Using the methodology outlined by [73], the sample size was determined, resulting in an initial sample size of 325. However, the initial sample size was increased in this research to 400 to mitigate potential non-response and reduce errors. A total of 400 questionnaires were distributed to the participants using an e-survey approach, involving the distribution of the survey link through WhatsApp and email. Following several reminders via telephone and email, a total of 308 questionnaires were collected. Nonetheless, upon data preparation for the data for analysis, 9 incomplete questionnaires were excluded, leaving 299 valid responses. This corresponds to a response rate of 74% based on the original sample size, which is notably high in comparison to response rates observed in prior research. e.g., [74]. Overall, the data for this study was collected over a two-month period, from August 2023 to September 2023.

The research participants demonstrated variation in their demographic and organizational characteristics. Most of the respondents (86.62%) were male, with 13.38% being female. Owners held the most jobs (72.58%), followed by managers (27.42%). A small proportion of participants (16.39%) were older than 50 years, 21.4% were younger than 30 years, 33.78% were between 31 and 40 years, and 28.43% being between the ages of 41 and 50 years. Regarding experience, the majority of participants, constituting 32.44%, had an experience between 11 and 15 years, 30.44% being between 6 and 10 years, 23.41% being between 1 and 5 years, and 13.71% being above 15 years.

3.2 Ethical considerations

The current research was carried out according to opinions of managers of manufacturing SMEs in Yemen, who volunteered to participate anonymously, ensuring the confidentiality of all provided information. As a social science study, it did not involve any human experiments and thus did not require ethical approval. Therefore, ethical clearance was unnecessary for this investigation.

3.3 Measurement

In this research, we collected data using a survey questionnaire tool to evaluate the link outlined in our proposed model. Given that the respondents are primarily Arabic speakers, the questionnaire was translated into the Arabic language and subsequently reviewed by two bilingual experts proficient in English and Arabic to ensure accuracy. Subsequently, another bilingual expert undertook the task of translating the final Arabic version back into English (the source language) to ensure consistency and eliminate any discrepancies.

The scales used in this research were constructed based on prior relevant research. Appendix shows a list of the variables and their respective items utilized for measurement. All variables and indicators were obtained from prior studies and adjusted to meet the context of this research to guarantee construct validity and reliability. 4 items were used to measure EMA, adopted from Wang et al. [75], while 3 items were employed to measure GI, adapted from [57, 76]. Finally, EP was measured with 3 items adopted from Bresciani et al. [15].

3.4 Common method variance

Like other studies, this one suffers from common method variance (CMV) because the data are self-collected [77]. To determine the presence of CMV, we conducted “Harman’s one-factor” test, adhering to the procedures described by Podsakoff et al. [77]. The results indicate that a sole factor accounts for only 40% of the total variance, falling short of the threshold value of 50 percent. Therefore, it can be concluded that CMV is not a concern in this study. Additionally, an alternative method suggested by Fuller et al. [78], entails evaluating collinearity through the variance inflation factor (VIF) using SmartPLS to detect CMV. The analysis results indicate that the VIF values were below a threshold of 3, as recommended by Fuller et al. [78]. Therefore, there are no concerns raised by the data regarding the presence of CMV.

4 Data analysis and results

To investigate the proposed model in this research, we utilized Partial Least Squares-Structural Equation Modeling (PLS-SEM) through SmartPLS 4 software, following the Ringle et al.’s [79], guidelines. The widespread utilization of PLS-SEM in business studies is primarily due to its numerous advantages [80]. Specifically, its robustness when working with smaller sample sizes. Unlike some other methods that require large sample sizes to offer reliable results, PLS-SEM can still provide accurate and meaningful insights even with smaller sample sizes [81]. Additionally, PLS-SEM is particularly advantageous for research that primarily focuses on prediction. In predictive research, the goal is often to identify and model the relationships between variables to forecast outcomes. PLS-SEM excels in this area because it can handle complex models that involve multiple variables and interactions [44]. Furthermore, when PLS-SEM is used with complex models in studies that have limited sample sizes, it exhibits greater statistical power compared to covariance-based SEM (CB-SEM). This means that PLS-SEM is more effective in detecting and modeling relationships between variables, which can be crucial for understanding and predicting outcomes in organizational research [44]. The PLS-SEM model encompasses two interconnected components: the “measurement model” and the “structural model”.

4.1 Measurement model

The study data underwent analysis using structural equation modeling (SEM), employing a two-step process as outlined by Hair et al. [82]. The initial step of SEM focuses on confirming factor reliability and validity, while hypotheses are tested in the second step. Cronbach’s alpha (a) and composite reliability (CR) were employed to assess the reliability, surpassing the standard threshold of 0.70. In addition, examination of the factor loadings revealed that the outer loadings exceeded 0.70. Furthermore, the results in Table 1 indicated that the average variance extracted (AVE) values surpassed 0.5, indicating convergent validity. Discriminant validity was assessed using the heterotrait–monotrait (HTMT) ratio of 0.90, demonstrating the discriminant validity [83], as depicted in Table 2.

Table 1 Reliability, and convergent validity.
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Table 2 Discriminant validity (Heterotrait-Monotrait).
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Lastly, we evaluated the adequacy of the model with the gathered data, where the RMSEA value (0.075) suggests a satisfactory fit for the measurement model according to Byrne [84].

4.2 Structural model

As a second step, the structural model underwent evaluation in accordance with the guidelines provided by Hair et al. [85]. The significance of the model's paths was examined using a t-statistic calculated through the bootstrapping method, as outlined by Peng and Lai [86].

The outcomes of hypotheses testing are outlined in Table 3. The findings indicate that all pathways demonstrated positive and significant associations. Therefore, hypotheses H1, H2, and H3 are supported.

Table 3 Direct effects.
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Furthermore, an indirect analysis was conducted to explore if GI acts as a mediator in the linkage between EMA and EP, aligning with the recommendations of Preacher and Hayes [87]. Hair et al. [85] suggest PLS-SEM bootstrapping technique for mediation analysis. They recommend following the approach of Preacher and Hayes [87], by bootstrapping the sampling distribution, as it offers a more robust method compared to the traditional “causal procedure” advocated by Baron and Kenny [88]. The use of SEM allows for the simultaneous testing of relationships between variables, making it a superior approach [89]. Besides the direct effect of EMA on EP, Table 4 displays the indirect effect of EMA on EP via GI, which is significant (b = 0.060, t values = 2.571, p < 0.05). Accordingly, the findings, as outlined in Table 4, affirm that GI serves as a partial mediator in the EMA-EP connection. Consequently, H4 is supported.

Table 4 Indirect effects.
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5 Discussion

The aim of this study is to examine the correlation between EMA practices and EP, with a focus on the mediating role of GI. The results demonstrate that EMA has a positive effect on EP, which aligns with previous studies that also suggested a similar positive correlation e.g. [53, 90]. As such, organizations should consider implementing EMA practices as a strategy to enhance their EP. The findings also indicate a positive impact of EMA practices on GI, which aligns with previous research supporting the beneficial association between EMA practices and GI [12, 19].

Furthermore, the findings reveal that GI has a positive impact on EP. This underscores the importance of innovation in driving sustainable practices and suggests that organizations focusing on GI may experience tangible benefits in terms of environmental outcomes. This aligns with prior studies that also suggested a similar positive correlation e.g. [67].

Interestingly, GI serves as an intermediary in the EMA-EP linkage. The outcomes suggest that EMA practices directly contribute to improved EP and indirectly influence it through green innovation. Understanding this relationship underscores the importance of integrating both EMA and innovation strategies in pursuit of environmental sustainability goals.

5.1 Theoretical implications

The results of this study offer interdisciplinary perspectives. The integration of insights from management accounting, innovation management, and environmental sustainability domains underscores the interdisciplinary nature of EMA research. Theoretical implications could extend beyond traditional disciplinary boundaries, encouraging scholars to draw upon theories and methodologies from diverse fields to enrich our understanding of EMA's role in promoting sustainable business practices. Prior studies have Rarely explored is the impact of EMA and GI on EP. Our study extends this understanding by illustrating that EP is directly and indirectly influenced by EMA practices in the vein of industrialized SMEs in LDCs, Yemen. Specifically, our research uses EMA and GI to predict EP. When taking GI into account with EMA's effect on EP, the latter is significantly altered. A previous study by Bresciani et al., [15]. investigated EMA to determine a company’s EP and found there are benefits to implementing EMA practices at the companies’ level as well as at the environmental level. They provide a starting point from which more specific data may be gleaned, which in turn assists in setting effective environmental objectives. Accordingly, the findings of this study provide strong support for the Findings from prior research. From the results, firms that adopt EMA practices achieve GI and EP. It’s obvious that green innovation also improves environmental efficiency. By adopting EMA practices, companies can be prepared to innovate their operations, which in turn reduces their environmental expenses, enhances productivity, and improves the company’s overall image as a green or eco-friendly company. Furthermore, this study addressed the relationship between EMA and EP in least developed countries, such as Yemen, contrary to prior literature that explored the EMA-EP link, which primarily concentrated on developed and developing nations [6, 51, 91]. Therefore, this study's results provide more evidence regarding the link between EMA practices, GI, and EP from other contexts.

5.2 Practical implications

In practical terms, the study is expected to provide decision-makers and managers of SMEs with better insights to improve their company’s EP performance by enhancing GI from EMA implementation. First, the study’s findings support strategic implementation of EMA. SMEs should recognize the positive effect of EMA on EP, as indicated by the study's results and supported by previous research. Therefore, integrating EMA practices into their strategic frameworks can serve as a deliberate approach to enhancing environmental sustainability efforts. This entails establishing systems and processes for tracking, analyzing, and managing environmental costs and performance metrics. Second, the study's findings highlight the positive association between EMA practices and GI, emphasizing the role of EMA in fostering innovation aimed at reducing environmental impacts. SMEs should actively promote a culture of innovation that prioritizes sustainability goals. This may involve investing in research and development efforts focused on eco-friendly products, processes, and technologies. Third, the study underscores the significance of GI in driving sustainable practices and its positive impact on EP. Therefore, firms should recognize that investments in GI initiatives can yield tangible benefits in terms of environmental outcomes, such as reduced resource consumption and emissions. On the other hand, given that GI acts as mediator between EMA and EP, firms should strategically integrate EMA and innovation strategies to maximize their impact on environmental sustainability goals. This involves aligning EMA practices with innovation processes and leveraging synergies between the two to drive continuous improvement in EP. To effectively implement EMA practices and foster GI, firms may need to invest in capacity building and training initiatives. This involves equipping staff members with the essential abilities, information, and resources to efficiently utilize EMA tools and participate in innovation activities aimed at addressing environmental challenges. Furthermore, collaboration with stakeholders, including suppliers, customers, regulators, and industry partners, can enhance the effectiveness of EMA and innovation efforts. By engaging stakeholders in sustainability initiatives and sharing best practices, organizations can amplify their impact on EP and drive positive change across the value chain.

6 Conclusions, limitations and future research

This study was conducted on manufacturing SMEs in Yemen, representing a LDC. The findings enhance our understanding of the topic and fill a notable gap in sustainability research. The study proposes a new model that broadens the perspective on the EMA-EP relationship by examining the mediating role of GI. The results are consistent with NRBV, providing empirical support for the relationship between EMA, GI, and EP among Yemeni manufacturing SMEs. Specifically, the study shows that EMA has a positive influence on GI, which in turn has a positive influence on EP. Additionally, GI serves as a partial mediator between EMA and EP.

While this study provides significant contributions, some limitations indicate areas for future investigation. Primarily, this study concentrated on examining the indirect impact of EMA on EP through the exploration of GI's mediating role. Future research could explore the dynamics and mechanisms underlying this relationship to develop comprehensive theoretical models that capture the interplay between EMA, innovation, and environmental outcomes. The identification of GI as a mediator highlights the complexity of environmental management processes. Theoretical discussions could delve into the nuanced interactions between various organizational factors, such as management accounting practices, innovation strategies, regulatory environments, and stakeholder pressures, to offer a deeper comprehension of how these components collectively shape environmental results. Second, this study employed a cross-sectional survey methodology, with data collected from a sample limited to small and medium enterprises located in Yemen. Due to possible differences in the characteristics of SMEs in Yemen and other countries, the conclusions of this study cannot be generalized to a larger population, particularly to SMEs beyond Yemen. Hence, future research can broaden the approach, include a larger sample size and include SMEs from diverse contexts outside of Yemen. In addition, future research could focus on large firms/other industries/or regions to gain a deeper understanding of the relationship between EMA and EP in different situations or contexts within both emerging and developed countries. Third, this study utilized a scale comprising only 3 items to measure EP construct, which may reflect a less comprehensive assessment of this construct. Hence, forthcoming research could replicate this study while employing a more comprehensive measure of EP. Finally, data sampling was conducted online via email and WhatsApp, which may affect the generalizability and representativeness of the findings. Hence, future studies can use other methods for data sampling when distributing the questionnaire, such as manual distribution. Furthermore, future research can integrate both qualitative and quantitative data collection methods.