Synergy or Antagonism? How Corporate Political and Social Strategies Influence Firm Innovation

Abstract

Although the increasing research interest on non-market strategy, the relationship between non-market strategy and firm innovation as well as the combinative impact of engagement in CPA and CSR are not well researched or understood. In this study, we integrate institutional perspective and multi-stakeholder perspective to analyze how the CPA and CSR independently and interdependently affect a firm’s innovation performance. With 3938 firm-year observations of China’s A-shared listed private firms between 2014 and 2018, we find support for the predictions that CPA strategy and CSR strategy both can exert a positive effect on firm innovation performance. We further develop competing hypotheses for the interactive effect of CPA and CSR on firm innovation from synergistic versus antagonistic view, and the findings are consistent with the antagonistic view. This study not only enriches our knowledge regarding the independent and joint influence of non-market strategies on firm innovation performance, but also highlights the necessary to pay attention to the heterogeneity of non-market stakeholders when integrating non-market political and social strategies.