The interactive budget is widely recognised as a driver of corporate innovation, yet the underlying mechanisms remain underexplored. Drawing on survey data from 268 managers in China’s Yangtze River Delta region, this study examines the impact of interactive budget on corporate innovation performance, alongside the mediating role of a loose culture and the moderating effect of the COVID-19 crisis. Results show that interactive budget exerts a significant driving effect on innovation performance and plays a core role, with loose culture playing a partial mediating role. Crisis positively moderates both the relationship between the interactive budget and innovation performance, and between the interactive budget and loose cultures. Further, the positive effect of the interactive budget on innovation performance is more potent in firms with a higher proportion of female managers. In contrast, its effect on fostering a loose culture is more potent in high-tech enterprises. This study opens the ‘black box’ between the interactive budget and corporate innovation, offering guidance for using budget management to foster innovation in dynamic and uncertain environments.
Zeng et al. (Thu,) studied this question.