Abstract
This paper explores the foundations of firms’ involvement in responsible innovation. A number of hypotheses appearing in the literature, regarding the direct effect of strategic orientations and the moderating effect of industrial category on responsible innovation engagement, were tested by using text analytics and statistical methods. The data comprise 475 documents of firms’ annual reports with a total word count of 192,179,794 and a mean of 404,589, supplemented with corresponding financial data, yielding 372 firm-year observations. The results show that long-term orientation and organizational virtue orientation are positively associated with responsible innovation, while profitability orientation is negatively correlated. The results also show that industrial category moderates the relationship between strategic orientations and responsible innovation engagement, such that the positive relationship between both long-term and organizational virtue orientation and responsible innovation is weaker in the industrial products category than in the consumer products category. The theoretical and practical implications are discussed.
Highlights
Innovation is the process of translating an idea or invention into a good or service that creates value or for which customers will pay [1]
The moderate correlation between long-term orientation and organizational virtue orientation is interesting. This correlation is unexpected because the dimensions of organizational virtue orientation comprise integrity, empathy, warmth, courage, conscientiousness, and zeal [39], which are not conceptually related to a long-term orientation
No variance inflation factor (VIF) score exceeds 4.1, with a mean score of 1.6, which is well below the threshold of 10 that is typically considered to represent a potential for multicollinearity [66]
Summary
Innovation is the process of translating an idea or invention into a good or service that creates value or for which customers will pay [1]. To make an innovation successful, firms must strive to maximize the benefit to customers and to the firms themselves Such a rule of innovation can improve the welfare of all parties [2]. How a firm assumes its responsibility toward society and the environment and the economic system when it is engaged in innovation-related projects have become imperative issues for modern firms.
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