Corporate ethics, governance and social responsibility in MENA countries

Abstract

Purpose Studies show that corporate governance (CG) and corporate social responsibility (CSR) are driven by ethical practices. The relationships between corporate ethics, CG and CSR have been heavily studied indicating significant associations. The purpose of this paper is to examine the mediating role of CG on the relationship between ethics and CSR. Design/methodology/approach Data were collected through questionnaires from small to medium-sized enterprises (SMEs) in the Middle East and North Africa (MENA) countries. The results were analyzed using structural equation modeling. Findings The results indicate that ethical practices have positive impact on CG, and in turn CG has a positive impact on CSR. The results also reveal a mediating effect of CG on the relationship between ethics and CSR. Research limitations/implications The sample selected is based on two countries in the MENA region, Egypt and Lebanon. Only SMEs are considered. Practical implications The innovative capabilities of SMEs in developing and emerging economies could be enhanced through corporate ethical practices which guide management for more CSR engagement through good CG. Originality/value The study contributes to corporate ethics, CG and CSR literature by providing evidence from a significant region, with both developing and emerging economies, on the mediating role of CG on the relationship between ethics and CSR.