From Responsibility to Returns: How ESG and CSR Drive Investor Decision Making in the Age of Sustainability

Areej Faeik Hijazin, Sajead Mowafaq Alshdaifat (), Ahmad Ali Atieh and Elina F. Hasan
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Areej Faeik Hijazin: Faculty of Business, Middle East University, Amman 11831, Jordan
Sajead Mowafaq Alshdaifat: Financial and Accounting Sciences, Faculty of Business, Middle East University, Amman 11831, Jordan
Ahmad Ali Atieh: Faculty of Business, Middle East University, Amman 11831, Jordan
Elina F. Hasan: Financial and Accounting Sciences, Faculty of Business, Middle East University, Amman 11831, Jordan

JRFM, 2025, vol. 18, issue 8, 1-22

Abstract: This paper examines the moderating role of corporate social responsibility (CSR) on the relationship between environmental, social, and governance (ESG) dimensions and investor decision-making in Jordan. Data were collected using a structured questionnaire designed for institutional investors and financial analysts, capturing perceptions of ESG, CSR, and investment behavior. A stratified random sample of 350 professionals across the financial, industrial, and service sectors was surveyed. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS 4. The findings show that environmental and social dimensions have positive effects on investor decisions, with governance dimensions having a negative effect. Notably, CSR has a negative moderating effect on the governance dimensions and investor decision, with no observed statistical moderating effect for environmental or social dimensions. This research unravels the multidimensional role of CSR in building the ESG-investor decision interface and identifies a counterintuitive negative moderating impact of CSR on governance, contributing to the existing literature on sustainability alignment in emerging markets. The results offer practical implications for companies aiming to attract sustainability-oriented investors by indicating the necessity for an integrated and genuine CSR and ESG approach.

Keywords: environmental, social, and governance (ESG); corporate social responsibility (CSR); investors decisions; sustainable investment strategies; PLS-SEM; Jordan (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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