Abstract
We have entered the “New Normal” economy, with more emphasis on economic growth driven by innovation than resource. This paper investigates the impacts of firms considering corporate social responsibility and environmentally sound technology by building a three-stage Cournot competition model with asymmetric cost. The sustainable development of economic and endogenous firm growth achieves the win–win result in the theoretical model. Using data from 31 firms in China, this paper empirically researches on the relationships among corporate social responsibility, environmentally sound technology and firm endogenous growth. The results show that: (1) Marginal cost decreased with the increase of innovation, as well as getting government research and development subsidy, which has a positive effect on firm growth. (2) Consumers respond positively to corporate social responsibility initiative, the reputation of the firm can be improved. At the same time, environmentally sound technology objectively reduces the marginal cost of competitors because of the technology spillover. (3) Profit of a firm undertaking corporate social responsibility partly decreases, which has a negative effect on firm growth. The contradiction between corporate social responsibility and profit of firm could be adjusted, such as socially responsible investment fund hosed by institutional investors.
Highlights
China’s economy has entered into the “New Normal” stage, which requires a steady growth of economic development, while at the same time, putting more emphasis on economic growth driven by innovation rather than factors
Firms can improve the social recognition through undertaking a certain social responsibility in the long term, which has a positive impact on firm growth; corporate social responsibility (CSR) leads to the drop of firm’s profits, which has a negative impact on firm growth in the short term
It should be more emphasized that economic growth is driven by innovation in the “New Normal” economy
Summary
China’s economy has entered into the “New Normal” stage, which requires a steady growth of economic development, while at the same time, putting more emphasis on economic growth driven by innovation rather than factors. The firms can realize the endogenous growth with green technology, economic sustainable development while improving the production efficiency or optimizing the process of product at the same time. Firms actively promote green technology innovation so that they can break through the green trade barriers and improve international competitiveness. Green technology innovation always refers to an activity that adopts a new knowledge of environmental protection and green technology for production and operation to create and realize new economic benefits and environmental values. Green technology innovation is not a simple technology concept; it highlights the harmony of economic benefits and the ecological benefits, and aims to achieve endogenous growth through the competitive advantage of green technology
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