In practice, an increasing number of economic entities have begun to consider strategic corporate social responsibility (CSR) as an opportunity to create a win-win situation for the organisation and the society. The existing literature has yet to soundly corroborate the role of strategic CSR in corporate innovation. This study examines the relationship between strategic CSR and innovation.
The empirical regression models are estimated to analyse the data collected from 2817 firms yielding 18 845 firm–year observations from 2001 to 2014 in the United States.
The findings indicate that firms with strategic CSR generate more and better innovation outputs. The positive effect is more pronounced when institutional ownership is lower, when firm size is larger, and when product market competition is more intense. In terms of economic consequences, firms with strategic CSR actually have higher commercial value and are less likely to suffer loss from failed innovation.
To establish a sustainable relationship with stakeholders and realise the long-term development of business and society, enterprises should engage in strategic CSR in a planned manner based on their own resources and professional expertise.
The study sheds light on a growing body of literature that investigates the real consequences of firms’ strategic CSR, and explains the growing recognition of the importance of strategic CSR.
Corporate social responsibility (CSR) has received great attention in most countries over the past two decades as an action plan for companies to implement sustainable development. Evidence shows that institutional and individual investors now consider environmental or social effects in making investment decisions (Chen, Dong, & Lin,
Traditional CSR is disconnected from business and strategy (Carroll,
Although the relationship between SCSR and corporate innovation has not been empirically captured by prior research, some studies have shown the relationship between traditional CSR and corporate innovation, and the results are generally mixed. Specifically, some studies have argued that traditional CSR has a positive influence on corporate innovation (Bocquet & Mothe,
To fill this gap, this study initially considers the effects of distinct CSR behaviours (strategic vs. responsive) on the quantity of innovation. To identify the heterogeneity in the innovative strategies of firms, we then illustrate how SCSR affects the quality of innovation measured by patent citations. Moreover, SCSR may relate to different aspects, such as environment and employee relations. Some of these aspects can be combined with corporate specialty, whereas others cannot. Enterprises can freely decide whether to allocate resources in aspects that fully utilise the core professional advantages gained from the main business. We classify the former as focused SCSR (FSCSR) and the latter as diffused SCSR to examine the effects of different practices of SCSR on corporate innovation. Finally, the possible channels through which SCSR affects corporate innovation and the cross-sectional heterogeneity in the results are examined.
Using a sample of US public firms from 2000 to 2014, we find that firms with SCSR generate more and higher-quality innovation outputs than those with responsive CSR. In comparison with diffused SCSR, FSCSR contributes more to innovation. These results are robust to a series of robustness checks, including alternative model, alternative measures of variables, alternative sample, potentially omitted variable tests, propensity score matching (PSM) approach, and instrumental variable approach. Further analyses indicate that SCSR improves tolerance for failure and reduces short-term performance pressure, which is critical to the success of innovation. Moreover, consistent engagement of SCSR matters to innovation. In terms of economic consequences, firms with SCSR have higher commercial value and suffer fewer loss from failed innovation. In terms of cross-sectional heterogeneities, the positive effect of SCSR on innovation is more pronounced when institutional ownership is lower, when firm size is larger, and when product market competition is more intense. In summary, our evidence suggests that SCSR has an inspiring bright side, that is, it matters to innovation.
Our study provides at least two contributions to the existing literature. Firstly, our study sheds light on a small but growing body of literature that investigates the real consequences of firms’ SCSR practice. Different types of CSR require vastly different skills and resources to operate. Some literature in economics and management attempts to distinguish different types of CSR activity to evaluate their contributions to firms’ future development (Khan, Serafeim, & Yoon,
Secondly, this study adds to the research on the driving forces of high-quality corporate innovation. High-quality innovation is the core of promoting high-quality development (Moshirian, Tian, Zhang, & Zhang,
A large literature argues that innovation is essential for firms to achieve sustainable development and is affected by various factors, including economic factors (Aghion, Bloom, Blundell, Griffith, & Howitt,
On the basis of resource dependence theory, organisations are constrained and affected by their environment. Thus, firms should interact with the environment they rely on, which has given rise to CSR activities. According to Zhang, Wang and Zhou (
Traditional CSR has no significant heterogeneity amongst firms. Conversely, SCSR is a unique positioning strategy and acts as a way to differentiate a firm from its competitors to achieve a competitive advantage and a win-win situation to both the organisation and society (Bénabou & Tirole,
In general, although there has been a growing awareness regarding SCSR, the evidence on the effect of SCSR activities on corporate performance is mixed. Moreover, there is no empirical study on the effect of SCSR on corporate innovation. This study, therefore, contributes to the literature by providing insight into the effect of SCSR on the quantity and quality of corporate innovation. It further provides valuable evidence that SCSR helps both the organisation and the society to have a win-win situation.
Based on the above-mentioned literature, this study puts forward research hypotheses and further tests hypotheses using empirical research method. The main steps are as follows:
Step 1: Hypothesis development. Based on the research objectives and the literature review, set up research hypotheses to make the testable predictions.
Step 2: Sample selection. Select a good sample and appropriate sample size to test research hypotheses.
Step 3: Empirical specification. Select regression model, define and measure dependent variables, independent variables and control variables in order to analyse the data in the research.
Holmström (
Mitigating short-termism of managers is crucial to foster innovation (Holmström,
Firms with SCSR are inclined to invest more in innovation, which will increase the quantity of corporate innovation. However, one may wonder whether SCSR, whilst promoting the quantity of innovation, will help improve the quality of innovation. After all, high-quality innovation is more likely to bring the fundamental changes in a technological trajectory and provide a potential opportunity to enter emerging markets.
Building upon the knowledge-based view and the organisational learning perspective, some studies have recognised that knowledge is a direct driver of high-quality innovation (Flor, Cooper, & Oltra,
Employees are the most valuable asset and the most important innovator of firms (Mao & Weathers,
As such, SCSR improves the quality of innovation through the accumulation and absorption of external knowledge and excellent human capital. For all these reasons, we hypothesise the following:
Strategic corporate social responsibilitymay relate to different aspects, such as environment, community, diversity, employee relations, and human rights. Enterprises can freely choose any of these aspects. The theory of planned behaviour argues that human behaviour is the result of a well-thought-out plan (Ajzen,
A firm using diffused SCSR may find it difficult for their CSR practices to be impressive. If firms focus on aspects such as employee relations, diversity, or human rights, then they have few opportunities to take advantage of their unique specialty. The CSR practices of such firms nearly have no essential difference. One of the results is difficulty in accelerating the flow, sharing, and transformation of innovation elements, making the promotion of innovation also difficult. By contrast, a firm adopting FSCSR actively identifies and prioritises the aspects of CSR that are most relevant to its unique specialty. More concentrated efforts enable firms to have a close contact with potential customers to obtain the latest and most useful knowledge that is easy to digest and absorb. Such efforts also allow firms to find out new opportunities that are difficult to discover in an ordinary approach, such as proprietary data on new trends that enable companies to innovate to meet new market expectations. Highly focused CSR projects within the expertise of firms are more likely to reduce cost and create value (Husted & Allen,
The patent and citation data are collected from three sources. We begin with the National Bureau of Economic Research Patent Citation database, which covers all granted patents in the United States from 1976 to 2006. We then extend this database through 2017 with the patent data created by Kogan, Papanikolaou, Seru and Stoffman (
The CSR data are collected from Morgan Stanley Capital International Environmental, Social and Governance, and Kinder, Lydenberg, Domini (MSCI ESG KLD) database. MSCI ESG KLD database is an annual data set applied to numerous publicly traded companies and has been widely used in numerous studies (Deng, Kang, & Low,
To examine the relationship between SCSR and corporate innovation, we estimate the following regression:
In comparison with input-oriented measures of innovation, output-oriented measures are less noisy and closer to the actual value of innovation (Atanassov,
The concept of SCSR was coined by Baron (
MSCI ESG KLD STATS database contains 13 dimensions of CSR. As in prior studies (Lins, Servaes, & Tamayo,
To measure FSCSR, we initially divide SCSR into two groups according to whether it can be combined with corporate unique expertise, and we then construct a dummy variable, FSCSR, to measure it. The first group includes environment and community, and the second group includes employee relations, diversity, and human rights. Focused SCSR equals to 1 if the strengths index of environment or community aspects of SCSR is greater than zero, and 0 otherwise. The strengths index indicates the extent to which the company actively participates in the environment or the community and also indicates the extent to which the company uses its expertise when participating in SCSR.
Following the innovation literature, we include a rich set of firm characteristics. Innovation input (RD/Sales) is measured by the ratio of Research & Development (R&D) expenditures to sales; firm size (Ln[Sales]) is measured by the natural logarithm of sales; capital structure (LEV) is the ratio of total debt to total assets; operating profitability (ROA) is the ratio of earnings before interest, taxes, depreciation, and amortisation to book value of total assets; cash holding (Cash/Assets) is the ratio of cash to total assets; sales growth (SalesGrowth) is the growth in sales; market-to-book ratio (M/B) is the ratio of the market value of equity to the book value of equity; capital expenditures (CapEx/Assets) is the ratio of capital expenditures to total assets; capital intensity (Ln[PPE/EMP]) is the natural logarithm of the ratio of net property, plant, and equipment to the number of employees; and labour productivity and quality (Ln[Sales/EMP]) is the natural logarithm of the ratio of sales to the number of employees. All control variables are lagged by 1 year. As mentioned earlier, year fixed effects and two-digit SIC industry fixed effects are included in our regression to account for the systematic variation in dependent variables across year and industry.
This article followed all ethical standards for research without direct contact with human or animal subjects.
Panels A–C of
Summary statistics.
Variables | Mean | SD | P10 | P25 | Median | P75 | P90 | |
---|---|---|---|---|---|---|---|---|
Patent | 18 845 | 24.296 | 91.127 | 0 | 0 | 0 | 6 | 41 |
Citation | 18 845 | 39.743 | 150.294 | 0 | 0 | 0 | 6.408 | 65.878 |
SCSR | 18 845 | 0.439 | 0.496 | 0 | 0 | 0 | 1 | 1 |
FSCSR | 18 845 | 0.196 | 0.397 | 0 | 0 | 0 | 0 | 1 |
RD/Sales | 18 845 | 0.162 | 0.675 | 0 | 0 | 0.006 | 0.079 | 0.210 |
Ln(Sales) | 18 845 | 6.870 | 1.828 | 4.664 | 5.706 | 6.823 | 8.060 | 9.214 |
LEV | 18 845 | 0.491 | 0.241 | 0.183 | 0.310 | 0.484 | 0.635 | 0.790 |
ROA | 18 845 | 0.113 | 0.143 | −0.003 | 0.077 | 0.127 | 0.180 | 0.243 |
Cash/Assets | 18 845 | 0.137 | 0.139 | 0.013 | 0.036 | 0.094 | 0.191 | 0.319 |
SalesGrowth | 18 845 | 0.130 | 0.304 | −0.126 | −0.002 | 0.084 | 0.201 | 0.395 |
M/B | 18 845 | 3.139 | 4.161 | 0.970 | 1.479 | 2.337 | 3.803 | 6.550 |
CapEx/Assets | 18 845 | 0.051 | 0.054 | 0.009 | 0.018 | 0.033 | 0.062 | 0.111 |
Ln(PPE/EMP) | 18 845 | 3.964 | 1.404 | 2.482 | 3.089 | 3.766 | 4.601 | 5.713 |
Ln(Sales/EMP) | 18 845 | 5.607 | 0.866 | 4.645 | 5.130 | 5.575 | 6.059 | 6.654 |
Patent | 8264 | 38.516 | 117.862 | 0 | 0 | 0 | 13 | 86 |
Citation | 8264 | 61.864 | 191.902 | 0 | 0 | 0 | 16.229 | 144.109 |
SCSR | 8264 | 1 | 0 | 1 | 1 | 1 | 1 | 1 |
FSCSR | 8264 | 0.338 | 0.473 | 0 | 0 | 0 | 1 | 1 |
Patent | 2797 | 91.523 | 180.151 | 0 | 0 | 9 | 78 | 341 |
Citation | 2797 | 140.277 | 286.921 | 0 | 0 | 7.817 | 112.068 | 519.127 |
SCSR | 2797 | 1 | 0 | 1 | 1 | 1 | 1 | 1 |
FSCSR | 2797 | 1 | 0 | 1 | 1 | 1 | 1 | 1 |
SCSR, strategic corporate social responsibility; FSCSR, focused strategic corporate social responsibility; RD, research and development expenditures; Ln, natural logarithm; LEV, capital structure; ROA, operating profitability; M/B, market-to-book ratio; CapEx, capital expenditures; PPE, net property, plant, and equipment; EMP, employees; SD, standard deviation.
Panels B and C report the summary statistics for subsamples of firms with SCSR and FSCSR, respectively. Comparing the results of three panels, we can find that the average value of Patent presents an increasing trend. The average value of Citation is also increasing. Consistent with our conjectures, these results demonstrate that firms with SCSR generates more and better innovation outputs, and compared with diffused SCSR, firms with FSCSR tend to have more and better innovation outputs on average.
In Panel A of
Univariate analyses.
Variable | SCSR ( |
Non-SCSR ( |
Test of difference | ||
---|---|---|---|---|---|
Mean (1) | SD (2) | Mean (3) | SD (4) | (1)–(3) (5) | |
Panel A: Innovative outputs partitioned on level of SCSR | |||||
Patent | 38.516 | 117.862 | 13.190 | 60.498 | 25.326*** |
Citation | 61.864 | 191.902 | 22.466 | 103.873 | 39.398*** |
Univariate analyses.
Variable | FSCSR ( |
Non-FSCSR ( |
Test of difference | ||
---|---|---|---|---|---|
Mean (1) | SD (2) | Mean (3) | SD (4) | (1)–(3) (5) | |
Patent | 91.523 | 180.152 | 11.396 | 47.170 | 80.127 |
Citation | 140.277 | 286.921 | 21.748 | 93.830 | 118.529 |
Note: The t-values for mean differences are based on t-tests.
SCSR, strategic corporate social responsibility; FSCSR, focused strategic corporate social responsib.ility; SD, standard deviation.
, denote significance at the 1%, 5%, and 10% levels, respectively.
In Columns (1) and (2) of
Strategic corporate social responsibility and corporate innovation.
Variables | Ln(Patent + 1) (1) | Ln(Patent + 1) (2) | Ln(Citation + 1) (3) | Ln(Citation + 1) (4) |
---|---|---|---|---|
SCSR | 0.549 |
0.169 |
0.586 |
0.186 |
(10.88) | 4.83 | (10.63) | (4.72) | |
RD/Sales | - | 0.435 |
- | 0.485 |
- | 10.03 | - | (9.54) | |
Ln(Sales) | - | 0.528 |
- | 0.560 |
- | (20.16) | - | (19.65) | |
LEV | - | -0.642 |
- | -0.725 |
- | (-5.86) | - | (-5.76) | |
ROA | - | -0.887 |
- | -0.947 |
- | (-5.09) | - | (-4.71) | |
Cash/Assets | - | 0.765 |
- | 0.901 |
- | (5.02) | - | (4.88) | |
SalesGrowth | - | 0.060 |
- | 0.097 |
- | (1.67) | - | (2.18) | |
M/B | - | 0.025 |
- | 0.030 |
- | (6.72) | - | (6.65) | |
CapEx/Assets | - | -0.590 | - | -0.433 |
- | (-1.36) | - | (-0.91) | |
Ln(PPE/EMP) | - | 0.133 |
- | 0.137 |
- | (4.50) | - | (4.14) | |
Ln(Sales/EMP) | - | 0.032 | - | 0.039 |
- | (0.79) | - | (0.87) | |
Constant | 1.500 |
-3.060 |
1.746 |
-3.108 |
(3.46) | (-6.74) | (3.47) | (-6.02) | |
Industry FE | YES | YES | Yes | Yes |
Year FE | YES | YES | Yes | Yes |
18 845 | 18 845 | 18 845 | 18 845 | |
Adjusted |
0.288 | 0.475 | 0.263 | 0.432 |
SCSR, strategic corporate social responsibility; RD, research and development expenditures; Ln, natural logarithm; LEV, capital structure; ROA, operating profitability; M/B, market-to-book ratio; CapExu, capital expenditures; PPE, net property, plant, and eqipment; EMP, employees; FE, fixed effects.
, denote significance at the 1%, 5%, and 10% levels, respectively.
To further investigate the effect of FSCSR on innovation outputs, we run Model (2) using a subsample of firm–year observations with SCSR. In
Focused strategic corporate social responsibility and corporate innovation.
Variables | Ln(Patent + 1) | Ln(Citation + 1) |
---|---|---|
(1) | (2) | |
FSCSR | 0.462 |
0.468 |
(6.29) | (5.42) | |
RD/Sales | 0.532 |
0.560 |
(8.69) | (7.79) | |
Ln(Sales) | 0.581 |
0.617 |
(18.40) | (17.49) | |
LEV | -0.764 |
-0.907 |
(-5.16) | (-5.35) | |
ROA | -0.289 | -0.434 |
(-1.08) | (-1.37) | |
Cash/Assets | 0.863 |
0.897 |
(3.90) | (3.46) | |
SalesGrowth | 0.169 |
0.221 |
(2.83) | (2.97) | |
M/B | 0.024 |
0.030 |
(4.83) | (5.04) | |
CapEx/Assets | -0.861 | -0.379 |
(-1.29) | (-0.49) | |
Ln(PPE/EMP) | 0.196 |
0.208 |
(4.85) | (4.60) | |
Ln(Sales/EMP) | 0.013 | 0.023 |
(0.22) | (0.36) | |
Constant | -4.041 |
-4.205 |
(-8.31) | (-7.63) | |
Industry FE | Yes | Yes |
Year FE | Yes | Yes |
8264 | 8264 | |
Adjusted |
0.563 | 0.519 |
FSCSR, focused strategic corporate social responsibility; RD, research and development expenditures; Ln, natural logarithm; LEV, capital structure; ROA, operating profitability; M/B, market-to-book ratio; CapEx, capital expenditures; PPE, net property, plant, and equipment; EMP, employees; FE, fixed effects.
, denote significance at the 1%, 5%, and 10% levels, respectively.
In this section, we conduct a series of tests to ensure the robustness of our baseline results, including alternative econometric method, alternative measures of SCSR and FSCSR, reduced sample, tests for potentially omitted variables, PSM approach, instrumental variable approach. The results (untabulated) show that our main findings are unaffected.
Although total citations can be a measure of patent quality, it is still noisy and may be caused by multiple incremental patents instead of important or radical patents. Following Azoulay, Graff Zivin and Manso (
Further analyses.
Variable | Ln(Failed + 1) | Ln(Incremental + 1) | Ln(Important + 1) | Ln(Radical + 1) |
---|---|---|---|---|
(1) | (2) | (3) | (4) | |
SCSR | 0.152*** | 0.138*** | 0.081*** | 0.025*** |
(5.95) | (4.29) | (4.18) | (3.14) | |
18 845 | 18 845 | 18 845 | 18 845 | |
Adjusted |
0.416 | 0.464 | 0.344 | 0.189 |
Further analyses.
Variable | RD/Sales | RD/Sales | ΔRD/Sales |
---|---|---|---|
(1) | ΔROA < 0 | ΔROA < 0 | |
(2) | (3) | ||
Panel B: SCSR and tolerance for failure | |||
SCSR | 0.058*** | 0.065*** | 0.040 |
(4.21) | (3.23) | (0.66) | |
Ln(Sales) | −0.054*** | −0.046*** | −0.039* |
(-8.04) | (-5.26) | (-1.83) | |
15 549 | 6165 | 4053 | |
Adjusted |
0.432 | 0.473 | 0.046 |
Further analyses.
Variable | Cash/Assets | Salesgrowth | ΔSalesgrowth |
---|---|---|---|
(1) | (2) | (3) | |
SCSR | 0.006** | 0.002 | 0.015*** |
(2.06) | (0.50) | (3.22) | |
15 549 | 15 549 | 15 549 | |
Adjusted |
0.316 | 0.171 | 0.127 |
Further analyses.
Variable | Ln(Patent + 1) | Ln(Citation + 1) | Ln(Failed + 1) | Ln(Incremental + 1) | Ln(Important + 1) | Ln(Radical + 1) |
---|---|---|---|---|---|---|
(1) | (2) | (3) | (4) | (5) | (6) | |
Cons_SCSR | 0.229*** | 0.241*** | 0.193*** | 0.195*** | 0.109*** | 0.036*** |
(5.40) | (5.07) | (5.97) | (4.99) | (4.54) | (3.53) | |
18 845 | 18 845 | 18 845 | 18 845 | 18 845 | 18 845 | |
Adjusted |
0.476 | 0.433 | 0.417 | 0.465 | 0.345 | 0.190 |
Cons_SCSR | 0.289*** | 0.290*** | 0.248*** | 0.252*** | 0.139*** | 0.043*** |
(5.54) | (4.95) | (5.96) | (5.24) | (4.60) | (3.30) | |
18 845 | 18 845 | 18 845 | 18 845 | 18 845 | 18 845 | |
Adjusted |
0.477 | 0.434 | 0.419 | 0.466 | 0.345 | 0.190 |
Further analyses.
Patent_value | |
---|---|
Panel E: SCSR and patent value | |
SCSR | 0.307*** |
(5.21) | |
7686 | |
Adjusted |
0.646 |
Further analyses.
Variable | ROA | ||
---|---|---|---|
Full sample | Strategic_CSR | Responsive_CSR | |
(1) | (2) | (3) | |
Ln(Failed + 1) | −0.005 |
−0.000 | −0.009 |
(-2.50) | (-0.10) | (-3.67) | |
12 967 | 5990 | 6977 | |
Adjusted |
0.391 | 0.420 | 0.385 |
Note: The control variables are included but not shown for saving space.
SCSR, strategic corporate social responsibility; RD, research and development expenditures; Ln, natural logarithm; ROA, operating profitability; CSR, corporate social responsibility; Cons_SCSR, consistent SCSR.
denote significance at the 1
In the hypothesis development, we argue that SCSR may affect innovation by improving firms’ tolerance for failure. Higher uncertainty (Bloom,
Specifically, we use RD/Sales to measure R&D expenditure and use ΔRD/Sales to measure the change rate in R&D expenditure. The results are shown in Panel B of
Given that managers are the principal corporate decision makers, mitigating their short-term performance pressure matters to innovation. Generally, SCSR is an investment. If it provides quick and certain returns, then the performance pressure and short-sighted behaviour of managers will be reduced. To understand the extent to which SCSR might affect performance, we implement tests using cash holding (Cash/Assets) and sales growth (SalesGrowth) as dependent variables. Column (1) of Panel C of
Consistent engagement of SCSR refers to participating in SCSR activities regularly and continuously (Tang, Hull, & Rothenberg,
Strategic corporate social responsibility and patent value: Our results show that SCSR is positively related to corporate innovation, including important and radical innovation. However, our analyses have not shed light on the effect that SCSR has on actual commercial value. Following Stoffman et al. (
Strategic corporate social responsibility and effects of failed patents: We find that relative to responsive CSR, SCSR has a significant and positive association with failed innovation. It will become an important concern if failed patents have a large negative influence on the development of the company. We now address this concern by examining the relationship between failed patents and corporate performance. The results are tabulated in Panel F of
Effect of institutional ownership: Aghion et al. (
Cross-sectional heterogeneity.
Variable | Ln(Patent + 1) | Ln(Citation + 1) | Ln(Failed + 1) | Ln(Incremental + 1) | Ln(Important + 1) | Ln(Radical + 1) | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
High | Low | High | Low | High | Low | High | Low | High | Low | High | Low | |
(1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | (10) | (11) | (12) | |
Panel A: Effect of institutional ownership | ||||||||||||
SCSR | 0.158 |
0.197 |
0.179 |
0.212 |
0.143 |
0.177 |
0.129 |
0.169 |
0.065 |
0.119 |
0.015 |
0.047 |
(6.18) | (7.04) | (6.05) | (6.57) | (7.43) | (8.39) | (5.62) | (6.49) | (4.78) | (7.18) | (2.54) | (5.64) | |
10 044 | 8801 | 10 044 | 8801 | 10 044 | 8801 | 10 044 | 8801 | 10 044 | 8801 | 10 044 | 8801 | |
Adjusted R2 | 0.439 | 0.535 | 0.390 | 0.498 | 0.390 | 0.473 | 0.421 | 0.529 | 0.279 | 0.427 | 0.148 | 0.253 |
Chow test | 6.45 | 6.11 | 6.75 | 7.20 | 9.12 | 8.38 | ||||||
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||
Panel B: Effect of firm size | ||||||||||||
SCSR | 0.482 |
0.030 | 0.506 |
0.065 |
0.397 |
0.021 | 0.432 |
0.020 | 0.243 |
0.031 |
0.089 |
0.012 |
(14.73) | (1.50) | (13.83) | (2.58) | (7.87) | (1.13) | (7.42) | (0.71) | (6.56) | (1.92) | (5.16) | (1.91) | |
9410 | 9435 | 9410 | 9435 | 9410 | 9435 | 9410 | 9435 | 9410 | 9435 | 9410 | 9435 | |
Adjusted R2 | 0.433 | 0.305 | 0.410 | 0.242 | 0.344 | 0.207 | 0.426 | 0.280 | 0.312 | 0.113 | 0.162 | 0.032 |
Chow test | 61.72 | 52.38 | 57.28 | 63.32 | 48.46 | 21.56 | ||||||
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||
SCSR | 0.236 |
0.036 | 0.244 |
0.053 |
0.222 |
0.034 |
0.194 |
0.011 | 0.112 |
0.003 | 0.028 |
0.008 |
(7.93) | (1.57) | (7.03) | (2.02) | (9.77) | (2.06) | (7.17) | (0.51) | (6.66) | (0.23) | (3.36) | (1.37) | |
9430 | 9415 | 9430 | 9415 | 9430 | 9415 | 9430 | 9415 | 9430 | 9415 | 9430 | 9415 | |
Adjusted R2 | 0.464 | 0.417 | 0.419 | 0.390 | 0.442 | 0.351 | 0.473 | 0.403 | 0.389 | 0.293 | 0.208 | 0.195 |
Chow test | 36.23 | 32.21 | 47.47 | 43.22 | 45.42 | 21.00 | ||||||
0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.03 |
Source:
Note: The control variables are included but not shown for saving space.
SCSR, Strategic corporate social responsibility.
denote significance at the 1%, 5%, and 10% levels, respectively.
Effect of firm size: Large firms are more likely to have explicit and implicit strengths that provide resources to promote the positive effect of SCSR on innovation. However, some specificities are associated with CSR activities in small businesses (Bocquet & Mothe
Effect of product market competition: Recent theoretical and empirical models have found that innovation is affected by market competition. The Herfindahl index measures how competitive the industry is in which a firm operates (Aghion et al.,
Our study provides evidence in support of the effect of SCSR on corporate innovation and business success. Specifically, firms engaged in SCSR activities generate more and better innovation outputs, including radical and important patents. In comparison with diffused SCSR, FSCSR contributes more to innovation. From the perspective of possible mechanisms of action, higher tolerance for failure, lower short-term performance pressure and more consistent engagement of SCSR are critical. From the perspective of economic consequences, firms with SCSR actually have higher commercial value and are less likely to suffer loss from failed innovation. Finally, from the perspective of heterogeneity, the positive effect of SCSR on innovation is more pronounced when institutional ownership is lower, when firm size is larger, and when product market competition is more intense. Overall, our study offers novel evidence of the inspiring bright side of SCSR, that is, its boosting effect on more and higher-quality innovation outputs.
Corporate social responsibility is an important part of value-driven management and when implemented effectively, it will be beneficial for all concerned and become a gateway for businesses to benefit the society and themselves. Strategic CSR is exactly a balance between traditional corporate profit maximisation and social wellbeing. Our results have a certain verification effect on the role of SCSR. To establish a sustainable relationship with stakeholders and realise the long-term development of business and society, an option we offer in this study for firms, especially those who want to spur high-quality innovation outcomes, is to engage in SCSR in a planned manner based on their own resources and professional expertise.
Although we have made preliminary attempts to understand the effects of SCSR, the study may not well answer to the question of how to combine SCSR with firms’ business strategies. Moreover, although in practice, many companies have begun to realise the advantages of SCSR, empirical research on SCSR in academia is still at an early stage. An objective and direct measurement of SCSR is lacking, including the degree of integration of CSR practices with firms’ business strategies. More research is needed to understand the importance of SCSR. With the in-depth practical development and academic development, SCSR will receive more attention and recognition to help companies make better decisions that render them more productive.
The authors have declared that no competing interest exists.
Y.Z.Z. was responsible for formal analysis, methodology, writing and revision. S.H.N. was responsible for formal analysis, data collection and correspondence. S.W.Z. revised and edited the manuscript.
This research was supported by the National Social Science Foundation of China (18BGL062), the Research Foundation of Education Bureau of Liaoning Province, China (LJKR0429), the National Natural Science Foundation of China (72002025).
Data sharing is not applicable to this article as no new data were created or analysed in this study.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any affiliated agency of the authors.