Corporate governance and corporate performance with a mediating role of corporate social responsibility—case study of companies listed on Saudi Arabian exchange

The goal of the research was to find out how Corporate Governance, Corporate Social Responsibility, and Corporate Performance are linked in Saudi Arabian capital market. Domestic companies registered on the Arabian stock exchange make up the majority of the population. The research spans 11 years and includes data from 2010 to 2020. Data was extracted from audited annual reports of domestic companies listed on Saudi Arabian Exchange (SAE). The Hausman Test was used to determine that the Random Effect model was the best fit. To find endogeneity, we employed the Durbin-WU-Hausman test and the TSLS rather than the OLS. A model has been proposed to examine the relationship between corporate governance and performance, as well as that of corporate social responsibility (CSR) that acts as a partial mediator. This study has implications for the current and potential investors of the firms in the Kingdom Saudi Arabia in the context of choosing “socially participating” firms for their investment. Theoretically, this study also contributes to our understanding of some related concepts that have not been explored in previous researches concerning CG, CP and CSR. This can also be deduced from the finding that CSR partially contribute to enhance a firm’s performance in the context of Saudi companies.