Building resilience: how sustainability and innovation accounting influence enterprise risk management and performance in Jordanian SMEs

This study examines the interrelationships between enterprise risk management (ERM), corporate sustainable development (CSD), innovation capability (IC), and organisational performance (OP) in Jordanian SMEs. Grounded in resource-based view theory, the research investigates the mediating roles of CSD and IC in the ERM-OP relationship. Data from 309 SMEs reveal that ERM positively influences OP, with CSD mediating this relationship. IC positively relates to CSD and OP, mediating the CSD-performance link. Firms implementing ERM are more likely to engage in CSD and enhance IC. Businesses pursuing CSD show a higher propensity for fostering IC, which positively impacts performance. The study provides novel insights into these dynamics in resource-constrained emerging markets, offering theoretical implications for strategic management literature and practical implications for SMEs, policymakers, and regulators in developing economies. Findings contribute to understanding how integrating risk management, sustainability initiatives, and innovation capabilities can enhance SME performance in challenging institutional environments.