The Effect of Corporate Social Responsibility on Corporate Performance in the Food Industry in Saudi Arabia: A Partial Least Squares Structural Equation Modeling Approach

Hussein Eledum () and Faiza Omer Elmahgop
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Hussein Eledum: Department of Statistics, Faculty of Science, University of Tabuk, Tabuk 47512, Saudi Arabia
Faiza Omer Elmahgop: Finance and Investment, University of Tabuk, Tabuk 47512, Saudi Arabia

Sustainability, 2024, vol. 16, issue 18, 1-21

Abstract: Although there has been a growing interest in understanding the influence of corporate social responsibility (CSR) on business outcomes, the specific mechanisms through which CSR impacts financial performance (FP) and competitive advantage (CA) remain underexplored, particularly in the context of the food industry. This study contributes to the literature by looking into the mediating effect of innovation and the moderating role of CA in the relationship between CSR and FP in Saudi Arabian food industry companies. Employing Partial Least Squares Structural Equation Modeling (PLS-SEM), data were collected from executive managers of these companies to assess how CSR practices foster innovation and, consequently, enhance financial outcomes and competitive positioning. The results reveal that CSR significantly improves FP and CA, primarily when focused on innovation. Moreover, CA does not influence the strength or direction of the relationship between CSR and FP. This research offers essential guidance for food industry managers to integrate CSR into core business strategies, foster innovation, and strengthen stakeholder relationships, thereby achieving sustainable growth and profitability.

Keywords: corporate social responsibility; innovation; financial performance; competitive advantage; food industry in Saudi Arabia; PLS-SEM (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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