Green Accounting, Eco-Innovation, and ESG Performance: Dynamic Effects, Mediation, and Threshold Evidence
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This study examines the dynamic and non-linear relationships among green accounting (GA), eco-innovation (EI), and ESG performance. Drawing on Legitimacy Theory and the Natural Resource-Based View, the study investigates whether GA and EI independently contribute to ESG performance, whether EI mediates the GA–ESG relationship, and whether a critical level of EI changes the contribution of GA to ESG performance. The analysis uses an unbalanced panel of 500 multinational corporations observed between 2015 and 2025. Two-Step System Generalized Method of Moments (GMM) is employed to address dynamic persistence and potential endogeneity, while Panel Threshold Analysis is used to identify regime-dependent effects. The findings indicate that both GA and EI are positively associated with ESG performance, with EI also functioning as an important transmission mechanism between GA and ESG. Furthermore, the positive contribution of GA becomes substantially stronger when firms exceed a critical eco-innovation threshold of approximately ten green patents per year. ESG performance also demonstrates significant intertemporal persistence. These findings highlight the importance of integrating environmental accounting with substantive innovation capabilities rather than treating sustainability disclosure as an isolated practice. The study offers theoretical implications for sustainability and resource-based perspectives and practical implications for corporate strategy and green policy design.
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