Gonzalo Maldonado-Guzmán*

Department of Marketing, Autonomous University of Aguascalientes, Av. Universidad No. 901, Aguascalientes, Ags., 20131, México

* Correspondence: Email:gonzalo.maldonado@edu.uaa.mx; Tel: +52 449-910-8471.

Abstract:  Recent studies have shown that the lack of environmental regulations in public administrations, the inability of employees to innovate knowledge and skills, the high price of green technologies, and the lack of environmental awareness in organizations are the biggest threats to the environmental and sustainable development. In this context, manufacturing companies in emerging markets should not only focus on achieving a higher level of business sustainability in economic and financial terms, but also pay attention to financial and green innovation, because they are important ways to achieve a green transformation of businesses, to improve sustainability, and to reduce carbon dioxide emissions. This study provides data on the adoption and repercussions of these activities on the sustainability of manufacturing companies in Mexico. The proposed research model was validated by applying partial least squares structural equation modeling (PLS-SEM) on a sample of 338 companies. The results of the study showed that the business sustainability of manufacturing companies significantly improved through the application of financial and green innovation. In addition, the results of the study showed that green innovation plays the role of a mediating variable in the relationship between financial innovation and corporate sustainable development.

Keywords:   financial innovation; green innovation; business sustainability; manufacturing industry

JEL Codes: G15, F36, C40

1. Introduction

It is recognized in the literature that the central goal of all manufacturing firms around the world is to improve their economic and financial performance (Mohd et al., 2022), which should be accompanied by business sustainability (BS) and long-term business success (Ahmed et al., 2020; Shahzad et al., 2021). Currently, this issue has received increasing attention, especially the environmental pollution caused by the manufacturing industry, which affects the global society and ecology (Yusliza et al., 2020; Sun et al., 2022a). Commonly, manufacturing firms in countries such as Mexico have ignored the negative environmental and social impacts of transforming their resources into products for the benefit of their economic profits (Najmi et al., 2019; Shahzad et al., 2021).

Similarly, the adoption of financial innovation (FI) and green innovation (GI) by manufacturing firms in emerging markets will enable them to improve their BS (Sonmez & Adiguzel, 2022), especially since FI plays a vital role in promoting GI and development as well as boosting the GI efficiency (Yuan et al., 2021). In addition, FI bottle help firms ease any financial constraints by creating more GI-enhancing loans (Huang et al., 2019a; Tariq et al., 2019; Qu et al., 2020). Moreover, FI in the literature is considered to be an important factor not only in improving BS levels (Sonmez & Adiguzel, 2023), but also in GI development (Yuan et al., 2021), mainly because FI has completely changed the way business financial transactions are conducted (Nejad, 2022). Additional examples include mobile banking, online payment systems, virtual currencies, robo-advisors, and peer-to-peer lending (Nejad, 2022).

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