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

Author

Listed:
  • 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)

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.

Suggested Citation

  • Areej Faeik Hijazin & Sajead Mowafaq Alshdaifat & Ahmad Ali Atieh & Elina F. Hasan, 2025. "From Responsibility to Returns: How ESG and CSR Drive Investor Decision Making in the Age of Sustainability," JRFM, MDPI, vol. 18(8), pages 1-22, July.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:8:p:406-:d:1706847
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    References listed on IDEAS

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    1. Gunnar Friede & Timo Busch & Alexander Bassen, 2015. "ESG and financial performance: aggregated evidence from more than 2000 empirical studies," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 5(4), pages 210-233, October.
    2. Xinshu Zhao & John G. Lynch & Qimei Chen, 2010. "Reconsidering Baron and Kenny: Myths and Truths about Mediation Analysis," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 37(2), pages 197-206, August.
    3. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
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    Cited by:

    1. Abdulaziz Al Naim & Abdulrahman Alomair & Kaouther Chebbi, 2026. "The moderating effect of corporate governance reforms on the relationship between audit committee chair attributes and ESG disclosures," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 13(1), pages 1-21, December.

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