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Article

Corporate Social Responsibility and ESG as Institutional Innovations for Sustainable Finance: Complexity and Competitive Mediation in the Insurance Sector in Developing Economies

by
Edosa Getachew Taera
1,2,*,
Maria Fekete Farkas
1,
Zoltán Bujdosó
3 and
Zoltán Lakner
4
1
School of Economic & Regional Sciences, Hungarian University of Agriculture and Life Sciences, Pater Karoly Street-1, 2100 Gödöllő, Hungary
2
Department of Banking & Finance, Wallaga University, Nekemte P.O. Box 395, Ethiopia
3
Department of Sustainable Tourism, Hungarian University of Agriculture and Life Sciences, Mátrai Street 36, 3200 Gyöngyös, Hungary
4
Institute of Agricultural and Food Economics, Hungarian University of Agriculture and Life Sciences, Pater Karoly Street-1, 2100 Gödöllő, Hungary
*
Author to whom correspondence should be addressed.
World 2026, 7(1), 16; https://doi.org/10.3390/world7010016
Submission received: 14 November 2025 / Revised: 31 December 2025 / Accepted: 4 January 2026 / Published: 20 January 2026
(This article belongs to the Special Issue Integrating Green Finance into Corporate Responsibility for Sustainable Development)
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Abstract

This study examines how corporate social responsibility (CSR) influences sustainable finance outcomes (SFO) in the Ethiopian Insurance industry through environmental, social, and governance (ESG) practices and institutional challenges (IC). Using covariance-based structural equation modelling (CB-SEM) with data collected from a primary survey, the results show that CSR has both a direct and an indirect positive effect on SFO through ESG. However, the adoption of ESG practices also tends to increase institutional challenges, which in turn negatively influences SFO. This interaction produces a competitive partial mediation effect. The serial mediation path CSR–ESG–IC–SFO is found to be negative, suggesting that enabling and constraining forces operate simultaneously. From a theoretical point of view, the study combines stakeholder, legitimacy, and institutional theories to explain this competitive mediation within a less-studied Sub-Saharan African (SSA) frontier market. On the practical side, the findings highlight the importance of establishing ESG disclosure standards, investing in capacity building, and strengthening governance systems to reduce institutional frictions and make CSR a stronger driver of sustainable finance.
Keywords: corporate social responsibility (CSR); ESG; sustainable finance; institutional challenge; competitive mediation; serial mediation; insurance sector; Ethiopia corporate social responsibility (CSR); ESG; sustainable finance; institutional challenge; competitive mediation; serial mediation; insurance sector; Ethiopia

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MDPI and ACS Style

Taera, E.G.; Farkas, M.F.; Bujdosó, Z.; Lakner, Z. Corporate Social Responsibility and ESG as Institutional Innovations for Sustainable Finance: Complexity and Competitive Mediation in the Insurance Sector in Developing Economies. World 2026, 7, 16. https://doi.org/10.3390/world7010016

AMA Style

Taera EG, Farkas MF, Bujdosó Z, Lakner Z. Corporate Social Responsibility and ESG as Institutional Innovations for Sustainable Finance: Complexity and Competitive Mediation in the Insurance Sector in Developing Economies. World. 2026; 7(1):16. https://doi.org/10.3390/world7010016

Chicago/Turabian Style

Taera, Edosa Getachew, Maria Fekete Farkas, Zoltán Bujdosó, and Zoltán Lakner. 2026. "Corporate Social Responsibility and ESG as Institutional Innovations for Sustainable Finance: Complexity and Competitive Mediation in the Insurance Sector in Developing Economies" World 7, no. 1: 16. https://doi.org/10.3390/world7010016

APA Style

Taera, E. G., Farkas, M. F., Bujdosó, Z., & Lakner, Z. (2026). Corporate Social Responsibility and ESG as Institutional Innovations for Sustainable Finance: Complexity and Competitive Mediation in the Insurance Sector in Developing Economies. World, 7(1), 16. https://doi.org/10.3390/world7010016

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