The mediating role of corporate social responsibility in corporate governance and firm performance

This study investigates the mediating effect of corporate social responsibility on the relationship between corporate governance and firm performance and whether this effect varies between family and non-family businesses. Based on a cross-national sample of the 500 largest family businesses matched to a non-family business sample from 2009 to 2018, it has been found that corporate social responsibility partially mediates the relationship between corporate governance and firm performance in the full sample. Further, the mediation effect is stronger in family businesses than in non-family businesses. This supports the conjecture that in their pursuit of socioemotional wealth, family businesses are more likely to implement corporate governance to ensure corporate social responsibility, thus enhancing future firm performance. These findings provide insights for all stakeholders, from business owners to regulators and policymakers, aiming to improve and sustain business performance.