Abstract
The integration of ethical strategy and innovation to achieve sustainable economic performance has been recommended by researchers for a long time. However, less attention is given to this area till now by the research. Therefore, literature is scarce in explaining the relationship between ethical strategy and innovation that leads to economic performance. Further, there is literature gap explaining the mediating role of innovation between ethical strategy and economic performance. The main objective of the study was to investigate the relationships between ethical strategy, innovation, and economic performance and investigate the mediating role of innovation. A quantitative study using cross-sectional survey method was performed, and data were collected from 66 business-to-business (B2B) firms in Tunisia by using purposive sampling method. The data analysis findings explain the positive relationship between ethical strategy, innovation, and economic performance of the firms. Further, it was also found that innovation has a mediating effect on the relationship between ethical strategy and economic performance. The study findings enrich the ethical and innovation domains of business research. Further, business leaders will get the insight on the variables that have effects on enterprise performance and lead them to translate their beliefs, views and culture into generating new ideas. The research ends by suggesting some directions for future research.