ABSTRACT
This study examines the relationship between sustainability-oriented innovation (SOI) and both financial and non-financial performance in 172 craft SMEs in a Latin American country, focusing on the moderating role of intergenerational authority. Using PLS-SEM, findings show that SOI positively influences financial and non-financial performance. Additionally, intergenerational authority had a moderating effect on the relationship between SOI and financial performance. As intergenerational authority decreases, the relationship between SOI and financial performance becomes stronger. Finally, artificial neural network (ANN) captured the most important SOI dimensions to predict financial and non-financial performance, respectively. Organizational innovation emerged as the most effective SOI dimension to predict financial and non-financial performance in craft SMEs. The study contributes to the understanding of how the dynamics between family members play a crucial role in the ability of SOI to produce financial outcomes in craft SMEs.
