Mediation role of responsible innovation between CSR strategy and competitive advantage: Empirical evidence for the case of Saudi Arabia enterprises

This study examines whether responsible innovation can be an important channel through which the corporate social responsibility (CSR) strategy influences the competitive advantage of the firm. Specifically, we tried to test the role of firm size and activity sector as conditional factors in the mediation of responsible innovation between CSR strategy and the competitive advantage for the case of Saudi Arabia enterprises. Based on structural equation modelling (SEM), our results show that responsible innovation is a key element of the sustainable business model since it determines the success of CSR strategy in boosting the competitive advantage of firms. In this model, the mediation of responsible innovation is moderated differently by the firm size and the activity sector, and it is dependent on the choice between strategic or reactive CSR strategy. Within this context, we also find that the indirect effects of the CSR strategy on competitive advantage are moderated by the firm size in the case of reactive CSR, whereas by the activity sector in case of strategic CSR. The originality of this paper is that it examines whether the competitive advantage of firms in a developing country is more dependent on the reactive CSR strategy or the strategic CSR strategy. It also proposes an empirical investigation into the conditional factors of responsible innovation and their effects on the relationship between CSR strategy and competitive advantage.