Unraveling performance asymmetry: environmental accounting and knowledge management as economic and environmental decision-support tools in an emerging market

Purpose This paper aims to examine the asymmetric effect of environmental management accounting (EMA) and environmental knowledge management practices (EKMP) on the financial (FP) and environmental performance (EP) of firms in an emerging market. Design/methodology/approach It adopted the cross-sectional design with stratified random sampling and PLS-SEM to analyze data from 347 respondents across manufacturing firms in Ghana. Findings The findings reveal an important asymmetry in the performance consequences of EMA. While EMA significantly improves FP, it does not exert a corresponding influence on EP, suggesting that EMA functions primarily as an economic decision-support mechanism rather than a direct environmental improvement tool. Conversely, EKMP contributes to FP, but the magnitude of its effect is relatively small and less direct than its influence on EP. Research limitations/implications The complex effect of EKMP on FP suggests that environmental performance may serve as an intermediate mechanism through which EKMP enhances FP; thus, the nexus should be mediated by factors like EP, ESG and green innovation. Practical implications Managers should not treat EMA and EKMP as interchangeable practices. EMA should primarily support financial and managerial control through environmental cost identification, resource allocation, budgeting, investment appraisal and operational decision-making. EKMP, in contrast, should be developed as an organizational capability. Firms must intentionally transition from passive compliance to active eco-innovations and sustainable production technologies fueled by internal EKMP to achieve tangible environmental targets. Originality/value By synthesizing the resource-based view and knowledge-based view theories, this paper provides pioneering evidence that EMA and EKMP govern completely different performance dimensions. The ultimate value of this work is proving that true corporate sustainability cannot be achieved through fragmented, single-framework approaches; instead, firms must structurally integrate financial-accounting controls with cognitive knowledge systems to achieve complete, balanced performance in volatile emerging markets.