Sustainable performance is increasingly critical in many sectors, particularly in the oil and gas industry, where strategic resource allocation and innovation are essential. Performance-based budgeting links funding to measurable outcomes; however, its effectiveness depends on the quality of accounting information and its ability to foster technological innovation. Guided by goal-setting theory (GST), this study aims to explore the direct and indirect effects of performance-based budgeting on sustainable performance through technological innovation and examines the moderating role of accounting information quality in Iraqi oil companies.
Data were collected via a questionnaire administered to 317 managers in Iraqi oil and gas companies. Partial least squares structural equation modeling (PLS-SEM) and moderated mediation analysis were employed to test the research hypotheses.
The results reveal that performance-based budgeting positively influences both sustainable performance and technological innovation. Moreover, technological innovation partially mediates the link between performance-based budgeting and sustainable performance. The findings also confirm that accounting information quality strengthens the relationship between performance-based budgeting and technological innovation, with higher levels of information quality enhancing innovation outcomes.
This study offers a novel contribution by integrating budgeting, innovation and information quality into a single mediated-moderated framework. It provides fresh insights into how budgeting reforms and high-quality information systems jointly foster innovation-driven sustainable performance in Iraq’s oil sector.
