Corporate Social Responsibility, Ownership Structure, and Firm Investment Efficiency: Evidence from the Saudi Stock Market

Rayed Obaid Hammoud Alobaid, Ameen Qasem () and Adel Ali Al-Qadasi
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Rayed Obaid Hammoud Alobaid: Department of Accounting, College of Business Administration, University of Hail, Hail 55471, Saudi Arabia
Ameen Qasem: Department of Accounting, College of Business Administration, University of Hail, Hail 55471, Saudi Arabia
Adel Ali Al-Qadasi: Department of Accounting, College of Science and Humanities, Shaqra University, Al-Dawadmi 17431, Saudi Arabia

Sustainability, 2024, vol. 16, issue 15, 1-25

Abstract: This study investigates the relationship between corporate social responsibility (CSR), ownership structure, and investment efficiency in the Saudi stock market. Analyzing data from non-financial companies listed on the Saudi Stock Exchange (Tadawul) from 2016 to 2021, the findings revealed that higher CSR disclosures were positively associated with investment efficiency. Additionally, the study found that firms with higher levels of institutional, family, or foreign ownership demonstrated more efficient investment practices. However, the study did not support the moderation effect of ownership structure on the CSR–investment efficiency nexus. These results remain robust across different alternative measures and methods. This research fills a gap in the literature by examining these relationships in an emerging market with unique governance and ownership structures. Specifically, it extends the understanding of the CSR–investment efficiency nexus beyond developed economies to include the developing context of Saudi Arabia. Furthermore, the study highlights the varying effects of different ownership structures on investment efficiency and provides a detailed analysis of how investor types respond to CSR disclosures, revealing differences from established CSR frameworks in developed markets. The study’s results offer new insights for investors, policymakers, and regulators, and open avenues for further research for academics and business professionals.

Keywords: CSR disclosures; ownership structure; investment efficiency; sustainable investment; Saudi stock market (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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