Relationship Between Green Innovation and Sustainability and Moderating Role of Foreigners: Evidence from Saudi Listed Companies

Abstract

This paper investigates the effect of the presence of non-Saudi members on the board and committees and the relationship between green innovation and sustainability reporting. I rely on the ISO 26000 and CSR guidelines as an index of sustainability measures. Based on a sample of Saudi listed firms, for the period 2017–2020, I run a multiple regression to test the moderating role of the effect of foreigners’ presence on the link between green innovation and sustainability reporting. The main issue of the paper is to address whether the presence of foreign members on the board of directors affects the firm’s decision to voluntarily respond to major stakeholders’ demands for increased sustainability reporting in Saudi Arabia. I found that the last appearance of COVID-19 affected the level of sustainability reporting, which led to the impact on the results of the relationship between the variables as well. By using a hierarchical moderated regression analysis, my findings confirm that green innovation has a crucial role in promoting sustainability, but the presence of foreigners in different committees has no effect on the relationship.