Abstract
This study investigates corporate innovation from the perspective of a firm’s employee-related corporate social responsibility (CSR) in China. We find that more employee-related CSR generates more innovation success. The results suggest that a firm’s incentive to offer better employee-related CSR is an important determinant of its innovation. The positive effect is more pronounced when employees’ input into innovation is more important, and when free-riding among employees is stronger. Additional tests indicate that more employee-related CSR spurs innovation through employee stability and innovation efficiency. Our results hold up to a variety of model specifications and endogeneity issues.
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