Innovation, green management and SME performance: evidence from Latin American manufacturing firms

Purpose This study explores the mediating role of innovation output in the relationship between green management and the performance of small and medium-sized enterprises (SMEs). Design/methodology/approach This research is based on a dataset collected by the Ibero-American SME Observatory, comprising 3,966 manufacturing SMEs in Latin America. Data were gathered between February and May 2022 and analyzed using partial least squares structural equation modeling. Findings Innovation output, as a strategic resource or capability, mediates the relationship between green management and SME performance, which implies that the impact of green management on SME performance is bolstered by innovation output. Originality/value Grounded in the resource-based view, this study contributes to the field of innovation by identifying innovation output as a mechanism that strengthens the relationship between green management and SME performance. The findings are therefore relevant for manufacturing SMEs seeking to address environmental challenges and ensure market survival through innovation, as well as for policymakers.