Musaddag Elrayah Department of Management, School of Business, King Faisal University, P.O Box: 400, Al-Ahsa, 31982, Saudi Arabia.
Email: melrayah@kfu.edu.sa
Sanjar Mirzaliev Research and Innovations Department, Tashkent State University of Economics, Uzbekistan.
Email: s.mirzaliev@tsue.uz

Abstract:

The research aimed to test the moderating impact of firm size on the relationship of environmental, social, and governance, financial decisions, and financial risk management of listed companies in Saudi Arabia. The longitudinal panel data was collected from 2016 to 2024 of listed companies in the Saudi Stock Exchange. Used pooled, random, and fixed effects models to test the study hypothesis. The panel data results show that environmental, social, and governance overall and its dimensions have a positive and significant impact on the financial risk management of listed companies in Saudi Arabia. Financial leverage also has a positive and significant impact on financial risk management. Moderating effect results also show that environmental, social governance and financial risk management relationships are positively and significantly moderated by firm size. Firm size also positively and significantly moderated between financial leverage and financial risk management. The study with the significant moderating effect of the firm size is considered to be a major contribution of the study with the extended model of environmental, social, and governance, financial leverage, and financial risk management in the context of Saudi Arabia. The study with the significant findings also provides valuable recommendations for policymakers and business leaders to promote sustainability and avoidance strategies risk in Saudi Arabia’s listed firms that could support the diversification and long-term stability of the country’s economy.

Keywords:Environmental, Social, Financial Risk Management, Firm Siz.