Exploring the Role of Technological Advancement, Organizational Capabilities, and Governance in Mitigating Financial Delinquency: The Mediating Effect of Green Innovation and Risk Management

Abstract

This study investigates the contribution of technology development, firm competencies, and governance on minimizing financial delinquency using green innovation and risk management as the primary mediators that assist in lowering the chances of financial delinquency and overdue payments. For this study, a quantitative research design with Partial Least Square Structural Equation Modelling (PLS-SEM) is adopted. This data was collected from questionnaires distributed using a five-point Likert Scale to employees working within the corporate and financial sectors. A non-probability sampling method was used and data were analyzed using SmartPLS software. The findings indicate that technology innovation and capabilities have a significant and positive influence on financial delinquency, either direct or indirect. The capability in risk management and green innovation is significant in the mediation process, but green innovation had more influence. However, corporate governance is insignificant in the moderation process. Also, the findings indicate that there are issues with measurement validity, as evidenced by the low factor loadings. The study makes a theoretical contribution through the integration of RBV and DCT theories with financial delinquency theory. This contributes through provision of an integrated perspective on how resources translate into dynamic capabilities that influence financial performance. The study suggests that businesses should emphasize the development of technology and organizational skills to improve their financial performance. They should also develop risk management systems and adopt green innovations. The government needs to facilitate the adoption of good corporate governance and risk management for financial performance improvement.

Keywords- Technological Innovation, Organizational Capabilities, Green Innovation, Risk Management Capabilities, Corporate Governance, Financial Delinquency