Do Green Innovation and Environmental Management Accounting Jointly Enhance Competitive Advantage? Evidence from Saudi Listed Basic Materials Companies

Abstract

This study examines whether green innovation (GI) and environmental management accounting (EMA), individually and jointly, are associated with competitive advantage among Saudi listed Basic Materials companies. The study conceptualizes GI and EMA as strategically relevant environmental capabilities and investigates whether their interaction generates competitive benefits beyond their individual effects. Data were collected through a structured questionnaire targeting knowledgeable managers and professionals in companies operating in the Basic Materials sector of the Saudi Exchange. Following data screening, 258 valid responses from an initial 304 questionnaires were retained for analysis. The measurement assessment demonstrated satisfactory indicator reliability, internal consistency, convergent validity, and discriminant validity. The empirical findings show that both GI (β = 0.288, p < 0.001) and EMA (β = 0.518, p < 0.001) are positively and significantly associated with competitive advantage. The model explains 69.7% of the variance in competitive advantage (R² = 0.697; adjusted R² = 0.693). Contrary to the hypothesized positive synergy, however, the GI × EMA interaction is statistically significant but negative (β = −0.078, p = 0.010). Simple-slope analysis further indicates that the positive association between GI and competitive advantage remains significant across different levels of EMA but weakens as EMA increases. However, supplementary robustness analyses show that the negative interaction is sensitive to model specification and becomes statistically insignificant at the $5\%$ level after controlling for respondent-reported organizational characteristics. These findings challenge the assumption that simultaneously intensifying environmental capabilities necessarily produces additional synergistic benefits. The study contributes to the literature by showing that the competitive value of GI and EMA depends not only on their individual deployment but also on how these capabilities are jointly configured and orchestrated. The findings also provide practical insights for Saudi Basic Materials companies seeking to align environmental information systems with green innovation initiatives to strengthen competitive positioning.