Green Environmental Management System to Support Environmental Performance: What Factors Influence SMEs to Adopt Green Innovations?

Abstract

In the current era of high environmental uncertainty, the advancement of green technologies has led to innovative practices in the manufacturing sector, becoming the preferred approach for achieving sustainable development in today’s business markets. Manufacturing firms require green innovation to improve their environmental performance and monitor operations effectively, but the adoption and implementation of these innovations is still low among manufacturing industries. To bridge this gap, a study was conducted using resource-based view (RBV) theory and the technology–organization–environment (TOE) framework to develop and validate a model that encourages firms to adopt green innovation. A survey was administered to 179 respondents from manufacturing firms, and the data were analyzed using structural equation modeling (PLS-SEM). The integrated constructs of the model—perceived benefits, top management support, coercive pressure, normative pressure, and mimetic pressure—all predicted green management accounting practices. Additionally, the study found that green management accounting practices directly and significantly impacted green environmental performance. The developed model provides clear implications for decision makers, highlighting the importance of adopting green practices and innovative technologies in order to enhance environmental performance. Advanced green technologies have shown a significant connection between green management accounting practices and environmental performance, particularly in developing economies.

1. Introduction

The dynamic evolution and growth of the industrial and corporate sectors in countries has led to environmental issues including augmented waste and toxins disposal, shortages of natural resources, and massive amounts of carbon and gas emissions that all represent reasons for adverse climate changes, albeit that organizations aim to achieve sustainability [1,2,3]. Such challenges can be addressed by the pursuit of green practices and innovative technologies in compliance with organizations’ social responsibilities. Observations around the globe support the establishment of regulatory policies that promote economic activity in alignment with the sustainability of the environment, particularly among major manufacturing firms [4,5,6]. However, in the current times, focus has been laid on small- and medium-sized enterprises (SMEs) and the promotion of businesses that are environmentally friendly. Current corporate stakeholders have intensified their awareness of environmental issues and corresponding solutions, leading to an emphasis on environmental performance analysis and assessment among such establishments [7,8,9]. The threat posed by firms to environmental sustainability has resulted in the development of processes that identify their effects on the environment, and an increasing inclination towards sustainable products and services among customers coupled with environmental legislation development has caused firms to turn toward eco-friendly organizational policies and practices in order to ensure that they remain competitive in the global marketplace [7,10].

In effect, green innovation is valuable to firms, particularly SMEs, and this value is attributed to the ability of such innovations to enhance green environmental performance [11,12]. The proper use of green innovations ensures the conservation of resources and the mitigation of environmental pollution while maintaining balanced profitability and environmental responsibility [12,13,14]. Owing to the significant contribution of SMEs to national economies, their survival remains of great concern, and because of their role as major economic pillars in a majority of nations, SMEs need to be proactive in enhancing their productivity and competitiveness [15,16]. In this regard, what distinguishes successful SMEs from their unsuccessful counterparts is the former’s use of green practices and innovative technologies [17].

Therefore, enhancing global sustainability among SMEs and communities calls for the introduction of policies and the development of methodologies [18], among which is the adoption of green environmental management accounting system (EMAS) [19]. EMAS is essentially an instrument that facilitates environmental performance management in firms and environmental information reporting to all stakeholders (internal and external) [7]. It assists the corporate sector in identifying, gathering, and analyzing financial and non-financial environmental information with the goal of enhancing the company’s achievement of financial and environmental performance. EMAS was conceptualized in response to the environmental challenges that traditional management accounting was not able to address. EMAS enables the implementation of different practices, including energy accounting (EA), water management accounting (WMA), material flow accounting, biodiversity accounting, and carbon management accounting (CMA) with the aim of enhanced financial and environmental performance [9]. It also enables companies to enhance their efficiency and manage environmental impact via the control of energy consumption, natural resources, costs of materials and their use, and pollution in order to formulate environmentally friendly decisions and enhanced quality and competitiveness [5].

In fact, the adoption of EMAS is viewed as a core component of the environmental management control system of a firm, involving the gathering of physical or financial data from historical or future actions of the firm in order to present time-series trends for pursuing strategic operational and growth initiatives and objectives [20]. According to Asiaei et al. [1], the decision of a firm to manage its environmental impact would involve the integration of accounting data and environmental data and strategies, and, to this end, EMAS has been known to achieve high corporate environmental performance. The objective of these firms is competitive advantage sustainability through the adoption of an environmental approach; for instance, the efficiency of firms can be enhanced through the elimination of contamination from manufacturing processes (via minimal required input, short processes, and control of compliance-related expenses and accountabilities) [18]. To this end, literature has documented the increasing momentum of environmental accounting among firms in search of sustainability [21,22,23]. This may be attributed to the demand of stakeholders that managers focus on evaluating their environmental issues and performance [7,18]. Optimum corporate environmental management and environmental strategy implementation, along with environmental management accounting (EMA) use, have been viewed as the top competitive advantages among firms [6]. EMAS can support these strategies in that it grants capability to businesses promoting green technologies [24,25]. A literature review highlights the key role of EMAS in the integration of environmental considerations into decision-making processes, thereby leading to improved environmental performance and financial results [26,27,28]. However, little is known about the role of EMAS adoption in the SMEs context. Further, regardless of the industry, the relationship between EMAS adoption and its impact on environmental performance remains poorly justified empirically. Kung et al. [29] found a direct influence of EMAS on environmental performance.

Nevertheless, although the benefits and significant importance of EMAS are widespread, its adoption level and implementation remain low among SMEs in emerging economies [30], and this holds true for Jordan. This explains the lack of empirical evidence of the relationships between relevant factors, with the literature urging for studies to shed light on the Jordanian situation in light of concepts and practices relating to sustainability [31]. Such a lack of studies is related to the lack of knowledge and training, low awareness of environmental issues, the ineffectiveness of professional bodies, lack of stakeholder pressure, ineffective environmental legislation, and the difficulties of firms in defining, categorizing, distinguishing, controlling, and gauging environmental protection costs [7]. Hence, considering the low level of adoption and awareness of EMAS among SMEs, there is a need to determine the influencing factors on the system’s implementation and adoption among industry decision makers. Current literature reviews on this topic have been conducted in industrial nations but remain lacking in developing countries, such as Jordan. There have been past studies on the understanding and implementation of the concept, but none have so far addressed the adoption of environmental management practices in Jordanian SMEs for environmental performance sustainability.

Therefore, this study is motivated by the lack of empirical studies on EMAS implementation and its role in enhancing the environmental performance of firms in the Jordanian context [14]. The majority of studies on accounting in the context of sustainability have mainly focused on corporate social disclosure [9,18] and the effects of eco-efficiency on the performance of firms [32,33], the relationship between environmental disclosure and firm performance [34,35], the extent of environmental disclosure [36], or the extent of financial performance of firms [3,19]. A recent review indicated literature gaps, including the managerial aspect of environmental accounting adoption and the role of EMAS, top management support, and other factors in enhancing corporate greening practices [7]. To the best of the authors’ knowledge, intention to adopt EMAS among decision makers has remained untouched in accounting literature; thus, this study aims to address this gap by developing and proposing a holistic EMAS adoption framework and assessing its implications based on the perspective of the organization. To this end, the study objectives are as follows:

• To determine the drivers of adopting EMAS;
• To determine the effect of EMAS adoption on green environmental performance.

This study aims to answer the following questions: Do technology–organization–environment (TOE) factors influence the adoption of EMAS? Does EMAS adoption influence green environmental performance? In this study, we developed a theoretical model based on the integration of the TOE framework, institutional theory, and resource-based view (RBV) theory. We also applied a structural equation modeling (SEM) approach to evaluate the research questions. Thus, to achieve the aims and objectives of this study, earlier available knowledge is assessed through a literature review to develop the hypothesis for the current study. This is followed by rigorous methodology procedures developed to draw conclusions on the findings of this study. The findings are analyzed by applying an advanced statistical technique, which is described in the analysis section.

The contributions of this study to the existing literature are threefold. First, the study extends the previous literature and research interest in the green practices and innovative technologies context by validating the conceptual model in SMEs in a developing country—Jordan. Notably, while earlier works tended to disregard the investigation of the antecedents and impact of EMAS adoption [31,37], this research considers these relationships. This, in turn, would enrich and improve the theoretical understanding of such relationships and provide insights into the context of EMAS and green innovation. Second, the current research evaluates the importance of the framework on EMAS practices in the context of manufacturing SMEs in Jordan, an emerging nation. The findings of the study are expected to validate the environmental performance of businesses upon undertaking green innovation, which plays a key role in the effective and efficient running of daily processes and activities. Lastly, the study has implications for developing economies, such as Jordan, owing to the need to counter their vulnerability to changes in the global environment and the lack of studies in the literature that demonstrate the relevance of EMAS in the day-to-day activities of businesses to enhance their green environmental performance. The organization of the paper is as follows: in the next section, the literature on the topic is reviewed, based on which the hypotheses are formulated; this is followed by a presentation of the research method and the relevant techniques; the empirical results are then presented and discussed, after which their academic and practical implications are presented in detail.

2. Literature Review

EMAS is a tool that can help businesses manage their environmental impacts while improving their financial performance. EMAS involves identifying and quantifying the environmental costs and benefits associated with a company’s operations and products and using this information to make more informed decisions. EMAS encapsulates the environmental and economic performance of firms via the development and implementation of proper and suitable environmental-related accounting systems and practices [18]. The distinction between EMAS and conventional accounting approaches lies in the former’s ability to identify environmental information, measure environmental data, and interpret environmental information in financial statements, bringing forward the consideration of environmental aspects. Thus, EMAS adoption can lead to mitigated costs and better overall performance (financial and environmental) [19] and decrease the pressure of environmental regulations while enhancing the reputation of the firm based on its environmental performance. EMAS entails dealing with environmental information that affects the environment and improves the company’s performance, environmental and otherwise, and the system can be categorized into two main areas: the monetary aspect and the physical aspect [4,38]. The former has its basis on the firm’s environmental-related activities expressed in monetary units, which present useful information for decision-making, whereas the latter has its basis on the natural environmental information, indicated in physical units [4]. Both information systems ensure that top management makes informed decisions regarding enhancing the firm’s performance (environmental and economic).

Notably, EMAS has been introduced as an extension of conventional management accounting, considering that accountants have been under pressure to adopt better environmental management and accounting practices. Thus, viewed as part of environmental accounting, EMAS assists in identifying, classifying, allocating, and controlling environmental costs, which results in informed decisions and environmental management, making it more effective than traditional management accounting systems [39]. Further, EMAS was originally developed to assist managers’ decision-making regarding enhancing corporate environmental performance [19]. It is extensively utilized by firms to reap different types of benefits, including identifying cost savings opportunities, enhancing product pricing and pricing decisions, enhancing environmental performance, making more informed decisions, and improving their innovation [7,21]. Other benefits include enhanced corporate reputation, better stakeholder decisions [18,33], staff retention, mitigated regulatory attention, and enhanced competitive advantage [40].

Notwithstanding the many benefits that can be obtained from EMAS adoption, empirical findings [22] have indicated several barriers to such adoption. Most of these empirical findings stemmed from studies focused on emerging developing nations, such as Malaysia, leaving out others, such as Jordan; thus, the topic remains unexplored in its entirety. Owing to the significant cultural, social, economic, and political differences among the countries that more often than not influence their accounting practices, it is safe to say that the findings from developed or newly industrialized countries may not be suitable for their emerging developing counterparts [14]. Hence, more studies in developing nations could present a deeper insight into the adoption of EMAS in the current times. The lack of studies examining the EMAS practices and barrier levels among firms in developing nations highlights a gap in the accounting literature, and to mitigate such a gap, this study examines the adoption level and the barriers that are EMAS related in the context of Jordanian firms.

3. Theoretical Understanding and Foundation

This study conducted an analysis of EMAS adoption and value based on an organizational perspective. Past studies of this caliber have explored the subject based on two distinct approaches: first, focusing on the variables impacting innovation adoption decisions, and second, focusing on the drivers and effects of innovation adoption.

A literature review of past relevant studies showed that the TOE framework presents a valuable point from which the examination of innovation adoption can be initiated [41,42,43]. The TOE framework is useful in identifying three categories of factors influencing the adoption via which the technologies are used by the firm, the first of which is the technological category. This category is described as the perceived attributes of the innovation to be adopted, and according to Tornatizky and Fleischer [34], its top relevant, positive, and significant feature is perceived benefits, which this study examines. The organizational context is the second category, within which important variables constitute the quantity of internally available slack resources, with top management support found as the top determinant of innovation adoption. Moreover, the third category is the environmental context. For its in-depth understanding, scholars have integrated the TOE framework with other theories (e.g., institutional theory) to examine the relationship, with the latter theory addressing factors of institutional environments that shape the structure, norms, and actions of the organization, such as the adoption of innovation. Studies in this stream of research have made use of the theory and the TOE framework to examine the environmental context [15].

A branch of innovation adoption research has also extended the TOE framework by including the influence of technology adoption on the basis of the RBV rationale, which states that the creation of value by a firm is affected by its joining resources, which are difficult for another firm to imitate owing to limited economical resources [44]. In addition, the effect of resources lies more in the firm’s ability to use innovation than in the innovation to be leveraged. In other words, the effect of the innovation depends on the level to which it is used in the firm’s principal value chain activities; the higher the level of use, the higher the probability of a strong impact [45]. This notion has branched out into a stream of research that focuses on the antecedents and outcomes of the use of innovation [17,37].

On the whole, TOE has been the general framework used in past studies to shed light on EMAS adoption drivers, whereas those that focused on the effects of EMAS adoption on environmental performance adopted the RBV theory.

4. Research Model and Hypotheses

The proposed model is underpinned by the TOE framework and RBV theory, which have been extensively used in past innovation technology adoption literature [11,17]. Moreover, the study uses theories to view and assess EMAS adoption effects on SMEs in Jordan, thus discerning the factors affecting such adoption in different contexts and the differences they make in environmental performance. Following a review of the relevant variables in the literature, the study developed a model as a guide (refer to Figure 1) that includes the following factor categories: technological factors, organizational factors, and environmental factors. These contexts are examined in the following sections, followed by the formulation of the hypotheses.

4.1. Perceived Benefits

One of the top innovation characteristics is perceived benefits, and based on Brammer et al. [46], they include encapsulated benefits, particularly the level of agreement with claimed benefits. Similarly, Kong et al. [29] described perceived benefits/usefulness as the level to which the firm or individuals perceive that the system benefits them or is useful to them in enhancing their performance. Perceived benefits have a significant influence on an individual’s behavioral intention toward adopting and using a new system or technology [46]. Empirical findings indicate that perceived benefits significantly affect innovation adoption [29,47,48].

Stakeholders’ understanding of the benefits they can leverage from EMAS is crucial for the practical application and development of the system [7]. This reflects the relationship between the firm’s interests and social benefits, as well as participation in the application of EMAS. Further, EMAS adoption assists firms through the provision of more complete, accurate, and inclusive data and information for performance measurement and for enhancing firm reputation, heightening interactions with the other stakeholders and community, steering clear of possible fines, adhering to environmental law, obtaining compensation benefits, and addressing and resolving issues in the environment [7]. A firm ensures that its activities are aligned with societal requirements and with its social responsibility through the disclosure of its environmental information and its activities relating to its adaptation to the environment. Thus, the company can receive several benefits and advantages in its operating process, such as building strong business–societal trust, enhancing status and image, and achieving competitiveness.

Therefore, if a firm is convinced that its adopted EMAS practices will benefit its enhancement of economic and environmental performance, managers will focus more on EMAS adoption, which would result in heightened and optimum environmental performance. As such, this study proposes the following:

H1: 

Perceived benefit has a significant and positive relationship with EMAS adoption.

4.2. Top Management Support

This support translates to the level of active engagement, commitment, and support from management when planning and using technological systems to ensure that they are used by the workers [37,49,50]. In this regard, decision-making regarding EMAS is the role of the managers in SMEs; thus, they have to be committed to its implementation through the use of available and proper resources so that the system use is successful and the barriers of natural resistance to use are tackled and resolved [51,52,53]. In an environmentally friendly company, EMAS implementation depends on management support and interest in ultimate enhanced productivity and competitiveness [7,18,54,55,56]. Achieving excellent environmental performance calls for involving the resources of the company with the inclusion of top management support, which involves a planning process that integrates corporate strategy with environmental issues and EMAS implementation and use.

Furthermore, social community pressure, the monitoring of legal authorities, and environmental groups’ demands have forced organizations to carry out their environmental responsibilities using standard environmental management and the transformation of the accounting system to suitable environmental information disclosure. Hence, the response to and reception of new technology use and the changes that come with it are dependent on perceived management needs. Prior literature has revealed that the commitment and support of top management are both significant to environmental management practice success [18]. EMAS success/failure among firms hinges on the ability of management and administrators to support implementation.

In fact, the perception of management is considered one of the top factors in EMAS practice, as highlighted in the literature [7], owing to the influence of management on the policy choices and environmental strategies to be adopted in business activities. Therefore, managers’ awareness of the benefits and usefulness of EMAS practices would ensure a proactive and smooth implementation of an environmental strategy that furnishes environmental information, mitigates operational costs and waste, explores new markets, and attracts potential customers via green practices and products [7,57]. By contrast, a lack of environmental responsibility and active support from management for EMAS can be a barrier to its implementation and adoption [58]. According to past studies, innovation adoption and implementation depend on top management support, so that technology use will be successful within SMEs. Such dependence makes the factor a major element in adopting EMAS [7,59]. Hence, this study proposes the following:

H2: 

Top management support has a significant and positive relationship with EMAS adoption.

4.3. Normative Pressure

Normative pressure is described as the influence stemming from firms running in the same industry (professionalism) or individuals in the same group [60] and is related to trade associations, media, suppliers, clients, and other social actors for legitimate behavior. Additionally, trade associations and other unions are often viewed as the main sources of normative pressure, while customers’ and suppliers’ demands are viewed as influencing the firm’s decision to act in a particular way. In connection to this, firms are often interested in the technologies and techniques that are viewed as effective in the communities within which they operate [2], as social players force businesses to make use of a specific technology/innovation because they are adopted by businesses in the same industry.

Further, knowledge sharing of the usefulness of adopting a specific technology urges firms toward adoption intention, and such sharing is possible through customer, supplier, trading agencies, and firms’ networks [61]. More importantly, normative pressure ensures that supplier and customer circles within the same exterior environment and organizations adhere to social activities, which boosts the adoption of EMAS. Firms’ implementation of EMAS enables their management of public perception using practices of control and communication, and as such, firms that fail to manage public perception and steer clear of trade unions end up adversely affecting their image and reputation [4]. With damaged reputations, firms can lose their competitive advantage and incur losses [62]. In other words, the adoption of EMAS could affect the image, reputation, and competitive advantage of firms; thus, normative pressure is a significant predictor of technology adoption [63]. Thus, this study proposes the following hypothesis:

H3: 

Normative pressure has a positive and significant relationship with EMAS adoption.

4.4. Coercive Pressure

According to Di Maggio and Powell [64], coercive pressure (CP) is a regulatory compliance to the current regulations, main branches, and resource-dominant firms. It is the pressure that powerful stakeholders exert, and this includes the government, with their regulations, and non-government institutions, such as customers, competitors, and suppliers—all of whom pressure the firms to adhere to and adopt environmental standards and regulations [4,46,65,66]. Based on institutional theory, CP can form legislative mandates and environmental protection among firms. According to an empirical study, regulatory forces and competitors significantly influence the adoption of innovation [62]. An investigation of cloud-based accounting system adoption recently revealed that CP has a significant influence on management decision-making [63]. Similarly, the majority of government authorities establish conditions to motivate firms toward EMAS adoption via CP, and when this happens, EMAS is adopted to enhance the firms’ environmental performance and obtain government support and economic paybacks, which enhances the firms’ social reputation. In the Jordanian context, government pollution standards and laws concerning pollution incidents have been established to motivate manufacturing companies to adopt EMAS practices.

Further, based on INS theory and innovation adoption literature on SMEs, governmental policies incentivize SMEs’ decisions toward adoption through environmental pressure/driving force, which has a positive and significant relationship with such decisions—similar to CP in INT theory. In addition, government-established policies concerning different promotional initiatives/rules are pursuant to EMAS adoption, and ultimately its institutionalized adoption [18]. Hence, it is indicated that CP multiplicity from many sources can have a significant influence on the adoption of EMAS, and the opposite holds true. Based on the above discussion, this study proposes the following:

H4: 

Coercive pressure has a positive and significant relationship with EMAS adoption.

4.5. Mimetic Pressure

According to Di Maggio and Powell [64], mimetic pressure is an institutional factor that refers to the ambiguous goals and misunderstood technologies that direct firms’ capitalization on external experience via modeling after rivals who are successful. Firms often relate their rivals’ successes to their strategic choices, which leads them to imitate their behaviors and actions regarding their practices and conduct in the hopes of preserving shares in the market and maintaining their survival [62,67,68,69]. Hence, despite the lack of justification for such imitation in light of efficiency, a firm may still be driven by mimetic forces to steer clear of perceived risks and to mitigate trialing costs that early adopters carry [21,70].

The above logic can be juxtaposed with SME adoption decisions regarding EMAS. In other words, upon learning that their rivals are leveraging EMAS benefits, firms may feel mimetic pressure and may imitate the former. Considering the risks surrounding the adoption of EMAS, direct exploration of the values and outcomes of the system may be costly or impossible for firms; thus, to cut costs or mitigate experimentation costs, they may rather be driven by mimetic pressure toward adopting the innovation [63]. The literature shows that higher pressure is felt by organizations that witness the successful implementation of innovations by others like them in the industry and locality; thus, they feel the need to be like them to ensure their competitive sustainability [4].

Past literature and INT show that mimetic pressure stemming from competitor firms has a significant influence on innovation adoption; for instance, [4] revealed that mimetic pressure from rival firms has a significant relationship with intention to adopt environmental information systems. Additionally, mimetic pressure was gauged by the perceived success of rival adopters and the level of adoption among competing firms [61]. Even though past works on EMAS adoption have not applied INT, some have shown that adopting EMAS in SMEs has been highly driven by competitive pressure (i.e., mimetic pressure). This is exemplified by [17] and their study on using AIS; their findings showed that SMEs’ realization that others in the same chain use innovation in their operations urges them to do the same. Hence, based on INT theory and past studies on adopting innovation, adopting EMAS may be subject to rival mimetic pressure. Therefore, this study proposes the following:

H5: 

Mimetic pressure has a positive and significant relationship with EMAS adoption.

4.6. EMAS and Environmental Performance

Environmental performance refers to the result that reflects the commitment of the firm to maintaining the natural environment [71]. It is evaluated through pollution control, waste reduction, lower environmental emissions, and recycling activities [72]. EMAS use and implementation effectiveness allow managers and decision makers in SMEs to limit the level of environmental issues and problems by addressing and resolving them through current information culled from various sources (both external and internal) [73]. Through EMAS provision of supporting data at the opportune time, managers can mitigate external anomaly occurrences and their effect on management knowledge of environmental dynamics, leading to environmental benefits and understanding their responsibilities to the environment [25,49,74]. EMAS also supports decision-making, as it gathers relevant information about the reliance of the firm on energy and its role in intensifying harmful carbon emissions that result from the consumption of energy [1,25,30]. As a result, environmental management strategies and financial control come into play in environmental management control systems; therefore, the integration of EMAS can assist firms in achieving environmental quality and performance. Such information may also bring profitability for the firm through increasing ecological demands and opportunities to improve environmental practices using accounting information processes that are effective.

Furthermore, EMAS facilitates the measurement, control, and disclosure of business environmental performance [31,72,72,75]. This study aims to test a conceptual framework that describes the relationship between environmental strategy, environmental management accounting, and environmental performance. We argue that environmental strategy can directly influence environmental performance through environmental management accounting, management, and policy [19,72] with its environmentally friendly practices and tools, which is why it has a significant impact on the performance of businesses [76]. The higher the level of EMAS adoption, the higher the level of control and decision-making effectiveness generated from reliable, updated, actual, and integrated information that is useful for enhanced environmental performance [49,72]. Empirical findings show the positive influence of adopting EMAS on environmental performance [26]. EMAS studies, however, have only examined the relationship in Western nations, excluding developing nations, such as Jordan, in terms of EMAS research. This study proposes the following:

H6: 

EMAS adoption has a positive and significant relationship with environmental performance.

5. Methodology

5.1. Instruments

A thorough review of the literature supports this study’s adoption of a structured, closed-ended questionnaire with eight sections. The first section obtains the respondents’ demographical information, while Section 2, Section 3, Section 4, Section 5, Section 6, Section 7 and Section 8 of the questionnaire are dedicated to measuring the items of the constructs (perceived benefits, top management support, mimetic pressure, coercive pressure, normative pressure, EMAS adoption, and environmental performance). The validity of the questionnaire was tested by piloting the study with 40 individuals, after which a large-scale survey was carried out. The items measuring the constructs were measured using a 5-point Likert scale ranging from strongly disagree (1) to strongly agree (5).

5.2. Sample and Data Collection Method

This study’s objective was achieved by adopting a quantitative approach, using a questionnaire survey to gather primary data from manufacturing SMEs in the Jordanian cities of Amman, Zarqa, and Irbid, as they have the highest proportion of SMEs in all sectors. Manufacturing enterprises in Jordan are categorized based on their number of employees and the annual revenue they bring in. Based on the Amman Chamber Industry, enterprises that employ 1–9 full-time employees are called micro-enterprises, and the majority of them are cottage and handicraft-type industries with low effect on the environment. This study excluded this category of enterprises. The next enterprise category is small enterprises, which employ between 10 and 49 full-time employees, and then medium-sized enterprises, which employ between 50 and 249 full-time employees [77]. SMEs contribute 35% to the GDP and employ approximately 28% of the labor force in Jordan [62,63,78,79], thus playing a key role in the region’s broader economic policy. The study drew samples of SMEs from various manufacturing sectors using a simple random sampling method. A total of 8000 manufacturing SMEs exist, out of which 941 match the definition of SMEs considered in this study.

Before collecting data, the sampling process entailed the identification of the target audience, the sampling method choice, the sample size determination, and the selection of sample factors. The size of the sample was hinged on a regression model processing method, the required reliability, etc. It has been recommended that the required sample size should be 4 to 5 times the number of variables when exploratory factor analysis (EFA) [80]. However, practical research applications require that the size of the sample be higher than 150 sample units [81]. In multiple regression analysis, the commonly used formula for determining the sample size proposed by [82] is n > 50 + 8 p (with n being the least sample size and p being the number of the independent variables included in the model). A larger sample of 500 questionnaires was selected and distributed to different SMEs using online means (email and Google Form URL). This size of sample was selected to avoid collection of data issues, such as a low rate of response, non-engagement of respondents, and missing values.

Prior to the survey, the participants were informed of the nature and objectives of the research and their right to drop out of the survey at any time they wanted. From the total number of questionnaire copies distributed, 196 were returned, after which the data were examined for outliers and non-engaged responses. This entailed the calculation and recording of the standard deviation value of each respondent, whereby cases having low or zero SD values indicated that the respondent answered all or most of the questions in the survey using the same answer or answer pattern. This reflects respondent’s non-engagement during questionnaire filling. Based on this examination, 17 responses were dropped as they had a standard deviation lower than 1 (SD ≤ 1), and so the remaining responses equaled 179, which reflects a rate of response of 35.8%.

5.3. Constructs Measures

This quantitative research method used a closed-ended questionnaire survey for the collection of data, with the variables measured using multiple-item scales. There were 30 items in the questionnaire that were related to constructs. Perceived benefits were measured by four items adopted from [29], top management support was measured by four items adopted from [29], and mimetic, coercive, and normative pressure were measured by four items adopted from [4]. Moreover, a six-item scale was used to measure EMAS adoption, and they were taken from [4]; lastly, four environmental performance measurement items were adopted from [83].

The questionnaire survey was the main tool for data collection, and the metrics were obtained from prior literature and interviews with eight professionals from the enterprises. The measures were originally in English but were translated into Arabic and back-translated into English to minimize measure validity issues. Based on the interviews with professionals, the phrasing of the items was modified to ensure that the items matched the business environment in Jordan. The questionnaire items are tabulated in

Table 1. Measurements of constructs.

Construct	Items	Adopted From
Perceived benefits	4	[29]
TMS	4	[29]
Mimetic pressure	4	[4]
Coercive pressure	4	[4]
Normative pressure	4	[4]
EMAS adoption	6	[4]
Environmental performance	4	[83]

6. Data Analysis

The PLS-SEM approach, which is a multivariate statistical method that allows for the evaluation of multiple variables in one model at the same time, was used for the data analysis. The approach works efficiently even with complex models that involve many latent variables, with moderating variables and with lower-sized samples [84]. Based on the above, this study preferred PLS over other methods for data analysis. The proposed model involves a moderating variable, which adds to its complexity, and the size of the sample is relatively small (179)—it is less than the threshold values required for other techniques. Lastly, this explorative study is underpinned by the TOE, Institutional, and RBV theories. As indicated by several studies, if a study is oriented toward prediction or if it is an extension of an existing theory, a combination that calls for path modeling is the appropriate approach to use, that is, PLS-SEM [84].

7. Results

7.1. Assessment of the Measurement Model

According to the recommendation forwarded by [84], the measurement model/outer model’s measurement is a major step in PLS-SEM, as it determines the reliability or lack thereof of the indicator constructs. Unreliable constructs could prevent the evaluation of the structural model/inner model. The measurement model evaluation therefore entails determining the construct item’s reliability and validity.

The relevant indicators representing the measurement model are tabulated in

Table 2. Relevant indicators of the measurement model.

Latent Construct	Cronbach’s Alpha	Composite Reliability (rho_c)	AVE
	>0.7	>0.7	>0.5
Environmental Performance (EP)	0.720	0.775	0.543
EMAS Use (EMAS U)	0.755	0.844	0.576
Perceive Benefits (PB)	0.775	0.856	0.598
Top Management Support (TMS)	0.704	0.815	0.527
Coercive Pressure (CP)	0.860	0.908	0.715
Normative Pressure (NP)	0.897	0.935	0.827
Memetic Pressure (MP)	0.713	0.812	0.522

, and from the table, the data support the reliability and validity of the values that did not breach any threshold for Cronbach’s alpha, composite reliability, and average variance extracted, which are 0.70, 0.70, and 0.5, respectively [84]. The entire items showed good convergent and discriminant validities, as the loadings of the factors on their respective constructs exceeded 0.40—a condition explained by [84]. The study also used the Fornell–Larcker criterion to establish the constructs’ discriminant validity by comparing the squared AVEs with the construct’s correlation coefficients.

Based on the data displayed in

Table 3. AVE square root (correlations among latent constructs).

	CP	EMAS Use	EP	MP	NP	PB	TMS
CP	0.845
EMAS Use	0.525	0.759
EP	0.449	0.728	0.737
MP	0.426	0.717	0.701	0.722
NP	0.588	0.449	0.372	0.335	0.909
PB	0.034	0.425	0.327	0.414	0.071	0.773
TMS	0.439	0.640	0.543	0.602	0.371	0.263	0.726

, the squared AVEs on the diagonal space exceeded the values of the correlation coefficients between the constructs, indicating the constructs discriminant validity. Upon taking into account all the indicators, it can be concluded that the measurement model achieved the requirements for convergent validity, discriminant validity and reliability at two levels, namely item and construct. Hence, the study proceeded with the hypotheses testing in the structural model assessment.

7.2. Assessment of the Structural Model

The study applied the PLS algorithm and bootstrapping test using 5000 resamples to determine the path coefficients level and significance for the formulated hypotheses. The standardized path coefficients (β-values), critical ratios (t-values), and p-values (with supported hypotheses) of every hypothesized relationship are presented in

Table 4. Result of hypotheses testing of the direct relationship model.

Hypothesis No.	Relationship	Path Coefficient	STDEV	t–Value	p-Value	Supported
H1	PB → EMAS U	0.153	0.046	3.350	0.001 ***	Yes
H2	TMS → EMAS U	0.184	0.061	2.992	0.003 **	Yes
H3	NP → EMAS U	0.105	0.045	2.359	0.018 *	Yes
H4	CP → EMAS U	0.161	0.055	2.917	0.004 **	Yes
H5	MP → EMAS U	0.509	0.054	9.343	0.000 ***	Yes
H6	EMAS U → EP	0.778	0.037	21.218	0.000 ***	Yes

Significant at * p < 0.05, ** p < 0.01, and *** p < 0.001.

and Figure 2. Of the six developed hypotheses, all were supported at 90–95% confidence levels.

8. Discussion and Conclusions

This study’s main objective is to investigate the way TOE dimensions are operated to enhance EMAS implementation and the effect of such implementation on environmental performance. Additionally, the research also aimed to determine the moderating role of green innovation in the relationship between the two variables. The research also tested the use of TOE, institutional, and RBV theories on manufacturing SMEs that are exerting all their effort to sustain competitiveness in the middle of a dynamic and changing environment. Based on the obtained results, EMAS adoption significantly and positively influence environmental performance, while green innovation has a negative significant moderating effect between the two. The results also showed that TOE dimensions of perceived benefits, top management support, coercive pressure, normative pressure, and mimetic pressure positively and significantly influenced the adoption of EMAS. The integrated theories adopted were used in this study to examine the effects of different factors on the EMAS adoption among manufacturing SMEs. TOE factors had a positive influence on such adoption making the adoption of EMAS among SMEs compulsory in achieving environmental goals.

As for the TOE constructs, Phan et al. [85] viewed perceived benefits as a crucial tool for employees to collaborate with and ensure enhanced organizational departments performance. The perceived benefits of EMAS adoption among managers would up the likelihood of its implementation. Based on the accounting viewpoint, when the accounting department benefits from EMAS, there is a high probability that other departments in the business will also. EMAS assists in achieving environmental responsibilities and meeting societal requirements, creating community trust in business, and improving business image, position, and competitiveness. This study’s results support those of other studies [86,87,88].

Regarding top management support and its effect on EMAS adoption, the result of this study reflects those of past studies that evidenced the same significant relationship in the positive direction [29,78,86]. Through top management support, the company is empowered to adopt green innovative technologies and generate green products through green digital manufacturing tools and technologies [76]. Their perception of such benefits would lead to the overall support of the company, considering managers and business operators are the ones at the forefront of the decision-making process when it comes to technology adoption. They develop strategies and reach decisions for achieving sustainable development goals of the firm; therefore, their introduction of EMAS to the rest of the individuals would accelerate its adoption. EMAS benefits in the form of proactive environment strategy, provision of accurate information, reduced costs of operations, new markets exploitation, and attraction of potential consumers via green products should be leveraged by management and business operators.

Our findings show that the three components of institutional pressure—coercive pressure, normative pressure, and mimetic pressure—had a positive and significant relationship with EMAS adoption, suggesting that firms experiencing higher pressure from all three components have a higher likelihood to adopt EMA to achieve a legitimate solid relationship with stakeholders [4,21]. Government-enforced regulatory policies, standards, and regulations on firms are focused on firms that neglect the natural environment; thus, the major role of the government in environmental protection has a significant influence over the behavior and decision-making process of the firms. In the same way, parent firms lay down policies and rules for data management, resources management, and environmental management and as such, the commitment of such policies and rules would penalize unrelenting firms, negatively affecting their reputation and overall performance. This finding corresponds to earlier research that signified the importance of coercive pressure in the adoption processes of EMAS and other technologies amongst SMEs [18,70].

More specifically, mimetic pressure, according to the results, has a positive significant effect on EMAS adoption, which means that if rival firms adopt new technologies, focal firms would be pressurized to do the same to remain in competition. The finding receives considerable support in former research which reported critical association between mimetic pressure and EMAS adoption [21,61,70]. This mimicking of rival technology adoption mitigates the risks of failure, as in today’s technological advancement era, it is good to stay ahead of competition over other competitors. In relation to this, past studies have revealed the key role of mimetic pressure on behavioral processes, particularly those involving highly complex and comprehensible adoption [29]. However, mimetic pressure decreases when the EMAS adoption of the firm is already high.

Moving on to normative pressure, another significant positive effect was found from this component on EMAS adoption among manufacturing SMEs. Customer demand satisfaction is the fundamental objective of the firm and technology adoption is one way to achieve such an objective. This results are in line with past studies that supported the positive effect of institutional isomorphism on the adoption of technology [4,29,40,61].

Moreover, based on the results, there is a positive significant relationship between EMAS adoption and environmental performance, which is consistent with previous findings that reported a significant relationship between environmentally friendly practices and environmental performance [1,19]. Generally speaking, it can be concluded that EMAS use effectiveness brings about firm control and informed decisions, which results in positive outcomes and enhanced environmental performance of the firm [72]. EMAS engagement enable informed environmental decisions of managers, making them more efficient and accurate in their decisions, and culminating in minimal resources wastage and preventing environmental pollution [89]. Thus, the commitment of firms to environmental practices would generally direct them towards stressing green resources for better performance (environmental and otherwise) [90]. This is consistent with the RBV theory and past studies claiming that the particular resources/strategies of a firm can enhance its environmental performance [15,91], thus making for an attractive EMAS adoption. In short, EMAS is an effective tool for minimizing and resolving environmental effects and mitigating environmental outcomes. The majority of studies in different contexts have evidenced EMAS effectiveness as a tool in quantifying environment-related issues, based on which decision-making is conducted. In essence, EMAS assists firms in obtaining competitive advantage, cost savings, cost wastage reduction, operational efficiency, saving costs, increasing revenues, and enhancing the overall corporate environmental performance.

9. Implications

9.1. Theoretical Implications

This study has several implications for literature. First, the development of an innovation adoption model based on the integration of the TOE framework, INS, and RBV theory, which is validated and provides new correlations to examine in the green practices, EMAS, and management accounting fields. To the best of the author’s knowledge, this is a pioneering study examining EMAS adoption using decision-making factors in Jordan, an emerging nation. Second, the study also extends past studies concerning the exploration of the adoption of green innovation practices, which, until now, has been limited to adoption rather than the overall effect of such adoption. The integration of TOE, institutional theory, and RBV in one model to examine the phenomenon under study also increases the explanatory and predictive powers of both models and generates findings that have implications for practitioner and academic circles.

9.2. Practical Implications

The results of this study are also expected to have implications for managers, industry leaders, government agencies, policymakers, and other relevant stakeholders who are concerned with the lagging behind of SMEs in Jordan when it comes to EMAS implementation. First, the significant role of the examined factors could urge the awareness of businesses to the current regulatory rules, policies, and regulations regarding the adoption of EMAS. Second, in a similar manner, training institutions and professional entities can introduce campaigns to promote the awareness of EMAS benefits and advantages in congruence with the firm’s corporate responsibilities. Moreover, seminars can be held to discuss environmental issues, provide short-term training courses in accounting and auditing as well as to conduct program visits for the introduction of EMAS adoption and for the promotion of awareness among firms concerning the connection between green innovation and environmental performance. Third, viewed from the government perspective, policymakers can play a key role in the formulation and design of legal documents that regulate the implementation of EMAS and other innovative technologies among firms. Regulations on how to disclose or encourage businesses to disclose information about their green practices, taxes, and environmental violations penalties should be made clear. Firms need to coordinate and collaborate with innovation consultants and advisers from SMEs to organize training courses on environmental protection and environmental accounting for support and guidance towards long-term business orientations and adopting strategies to support environmental regulations and standards. Finally, the proposed and validated model could be useful for SME managers to identify the drivers of EMAS adoption and the influence of such adoption on the firms’ environmental performance. The model can assist these stakeholders to focus on the distinct effects of such adoption on previously ignored green environmental performance.

10. Limitations and Recommendations for Future Studies

This study possesses certain limitations and offers potential avenues for future research. First, the cross-sectional data collected in the Jordanian context, while illuminating causal relationships between variables, may not fully represent the proposed model and may therefore be inadequate for a comprehensive assessment of causal relationships. To mitigate this limitation and avoid bias, future studies may incorporate longitudinal designs to enhance the validation and accuracy of the findings. Consequently, it would be constructive to validate the present study’s findings with data from similar countries, such as Saudi Arabia, Kuwait, and Qatar. Additionally, the sample size and regions involved in this study were limited; future studies may broaden the range of regions and increase the sample size to improve the generalizability of the findings.

Second, while the study focuses on manufacturing SMEs, it would be beneficial to include non-manufacturing and services SMEs in future research. This is because such businesses also interact with the natural environment, albeit indirectly. Including them would provide a more comprehensive understanding of how different types of SMEs implement EMAS. Furthermore, the study’s sample size is limited to a specific industry and location. To gain a broader perspective and compare results, it may be advantageous to extend the sample to include other industries and nations. This would enable researchers to identify any patterns or trends in EMAS implementation across various contexts and assess the effectiveness of the program in different settings. Overall, by including non-manufacturing and services SMEs in future research and expanding the sample to encompass other industries and nations, researchers can gain a more nuanced understanding of EMAS implementation and its impact.

Third, this study examined the impact of selected TOE variables on the adoption of EMAS, as well as the influence of EMAS on environmental performance. While this study provides a valuable insight into the relationship between these variables, there may be other factors that can also impact these outcomes. Future studies could consider other internal and external TOE variables in addition to those already analyzed in the current study. These variables may include aspects such as organizational culture, leadership style, market competition, and regulatory frameworks. By considering a broader range of variables, researchers can obtain a more comprehensive understanding of the factors that influence SMEs’ adoption of EMAS and its impact on their financial, social, and environmental sustainability. Moreover, future research studies may explore combining the TOE model with other theories or models such as diffusion of innovation theory, unified theory of acceptance and use of technology, or the Delone and McLean model for more nuanced implications. For instance, the diffusion of innovation theory examines how innovations are adopted and diffused over time, and it may provide insights into the stages of adoption of EMAS by SMEs. The UTAUT model looks at the factors that influence individuals to use technology, and it could provide insights into why SMEs adopt EMAS. The Delone and McLean model focuses on the impact of information systems on organizations, and it could provide insights into how EMAS impacts SMEs’ overall operational efficiency and effectiveness. Incorporating these additional theories or models would enable researchers to gain a more sophisticated understanding of the complex relationship between the adoption of EMAS, its impact on an SME’s environmental performance, and the broader implications for its financial and social sustainability.

This quantitative study analyzed survey responses and conducted PLS-SEM analysis, an approach that helped us to gain a better understanding of the phenomenon under investigation. However, to delve deeper into the topic, future research could include qualitative methods, such as conducting semi-structured interviews with owners or managers. These interviews could provide valuable insights into the drivers and antecedents of EMAS, including technological and managerial capabilities. Furthermore, the study analyzed only the direct effects of the variables. Other variables may have different effects or act as mediators in the relationships between the variables studied. Therefore, future studies should investigate these effects to provide comprehensive and enriching research. Such research would be crucial in providing a more detailed understanding of the phenomenon and its impact on various stakeholders. Ultimately, it could help policymakers and business owners make informed decisions that align with environmental sustainability goals.