Examining the Moderating Role of Risk Management on the Relationship Between Social Responsibility and the Performance of Companies Listed on the Iraq Stock Exchange

Abstract

The impact of corporate social responsibility (CSR) activities on company performance remains a subject of debate, with conflicting empirical findings persisting over several decades. Research on CSR in Persian Gulf countries is limited, leaving questions about the generalizability of Western findings to these regions. This study investigates the effect of CSR disclosure on the performance of companies in Iraq, using a large panel of firms from the Middle East. The results reveal a positive and significant relationship between CSR and company performance. Additionally, while risk management capacity strengthens the link between CSR disclosure and performance, the influence of other stakeholders does not serve as a moderating factor. These findings align with recent literature, including the works of Nyangolan et al. (2019), Iska (2022), and Koh et al. (2022). The study makes significant contributions by being the first to apply a large panel of Middle Eastern companies to this research area and by examining the moderating roles of stakeholders and family ownership. The insights provided can help market participants and researchers understand the implications of CSR and enhance its impact on financial performance. Specifically, by improving CSR disclosures, companies in developing Arab Middle Eastern countries can strengthen their performance. Furthermore, the study highlights the importance of integrating customer-centric policies and after-sales services into CSR programs to boost overall company performance.