In your findings, you said that the direct effect of environmental management accounting (EMA) on firm performance become insignificant when environmental innovation is included as mediator. But doesn’t this raise a question that the actual driver of performance is innovation itself, not EMA? So, how can you be sure the impact is from EMA and not because firms who are more innovative anyway happen to also implement EMA? It feels like there might be some endogeneity or omitted variable bias here, no?
You raise a very important point, and I agree it’s worth deeper reflection. However, I think it’s an oversimplification to conclude that innovation alone drives firm performance while discounting the role of EMA entirely. The authors clearly demonstrate that EMA facilitates environmental innovation by providing the informational infrastructure and cost visibility necessary for identifying opportunities and allocating resources efficiently toward green initiatives. In that sense, EMA may not directly boost performance in a linear way but instead enables innovation, which is the visible outcome driving performance. The relationship isn’t about isolating one variable but about recognizing the chain of causality that EMA initiates. That said, your concern about potential endogeneity or self-selection bias is fair, especially in cross-sectional studies using survey data.
That said, I’d be interested to hear from the authors or other readers: How do we account for the possibility that firms with an inherent strategic orientation toward innovation (and likely stronger leadership or resource slack) are more inclined to adopt EMA in the first place? In other words, could the observed mediating effect be partially capturing reverse causality or omitted organizational traits that predispose firms both to innovate and to embrace EMA tools? Would a longitudinal or instrumental variable approach help untangle this directionality more convincingly?