Does disclosure of CSR activities improve corporate value? Moderating role of intellectual capital and COVID-19 pandemic

This paper investigates the effect of CSR on corporate value in conjunction with knowledge-based resources (i.e., intellectual capital - IC) and COVID-19 in the context of an emerging market in the Middle East. It also explores the moderating effects of IC and the COVID-19 pandemic on the nexus between CSR and firm value. Employing a 6-year longitudinal dataset of Saudi nonfinancial firms listed on the Stock Exchange (Tadawul) from 2016 to 2021 and applying a feasible generalised least squares estimation method, our results show a significant inverse relation between CSR and corporate value measures, while a positive (negative) relation between IC (COVID-19) and corporate value. We also find that both IC and COVID-19 have complementary moderating roles in amplifying the inverse nexus between CSR and corporate value. These findings are robust with alternative measures of CSR and IC, and endogeneity/simultaneity concerns, and provide valuable insights for companies, regulators, investors and stakeholders.