Role of Emerging Financial Technology on Environmental and Social Governance of Textile Companies in Saudi Arabia

Abstract

Purpose- This study aimed to investigate the substantial impact of financial technology on environmental and social governance (ESG). As a mediating variable, the study also examined the mediated effect of financial constraints, tax rebates, and government subsidies. Design/Methodology/Approach- The information was extracted from annual reports of publicly traded textile companies from 2011 to 2021. The quantitative research method and longitudinal research design were utilized. STATA software was used to conduct a panel regression analysis on the data. Findings- The findings suggest that financial technology positively and substantially impacts environmental and social governance. The other mediating effects also indicate that financial constraints, tax reimbursements, and government subsidies mediate between financial technology and environmental and social governance significantly and positively. Implications- The results indicate that financial technology substantially and positively affects environmental and social governance. The other mediating effects suggest that financial constraints, tax reimbursements, and government subsidies mediate significantly and positively between financial technology and environmental and social governance. Originality- This mediating effect is pioneering, particularly in the context of Saudi Arabia, as indicated by the research with the extended mediating model, which demonstrates significant contributions to previous studies.