Effects of environmental corporate social responsibility on innovativeness of spanish industrial SMEs✰,✰✰,★,★★

Abstract

• Environmental corporate social responsibility (ECSR) enhances SMEs’ innovativeness. • Innovativeness embeds technological efforts (R&D) and results (product and process innovation). • We provide empirical evidence over a large sample of industrial SMEs. • ECSR promotes sustained innovativeness in already innovative and noninnovative firms. • This evidence strengthens the business case of pro-environmental strategies. This study analyzes how environmental corporate social responsibility (ECSR) strategies contribute to enhancing innovativeness among small and medium-sized enterprises (SMEs) by developing technological resources. We test our hypotheses over an eight-year period using a panel of 2,405 industrial SMEs in Spain. We empirically find that ECSR drives the building of firms’ technological resources, which results in an enhancement of their technological effort or R&D and outcomes in terms of product and process innovation. ECSR intensifies innovation for innovative firms and catalyzes the inception of innovation for previously non-innovating firms, and the resultant effects are sustained over time. We contribute to the literature by analyzing the effects of ECSR in promoting the innovation of firms beyond the well-known influence on green innovation. Further, we examine the neglected research area of the environmental strategies of SMEs. Our findings strengthen the instrumental innovative value of ECSR, specifically for SMEs.