Abstract

Corporate Social Responsibility (CSR) literature in developed countries indicates that there are two types of CSR (i.e., proactive CSR and reactive CSR), and only the proactive one can boost innovation. However, recent studies from emerging economies such as China show that both types of CSR can enhance innovation. Such inconsistent results may be created by, on the one hand, the heterogeneity of innovation types, and on the other hand, the heterogeneity of mechanisms though which CSR impacts innovation in different countries. Accordingly, this paper theoretically explores the impacts of two types of CSR (i.e., proactive CSR and reactive CSR) on two of innovation types (exploratory innovation and exploitative innovation). This paper further reveals the mechanisms through which CSR impacts innovation in China by investigating the moderating role of institutional support (i.e., government support and social support) on the relationship between CSR and innovation. Using a panel dataset (2008–2016) of 286 Chinese public listed firms from research and development (R&D)-intensive industries (e.g., information technology, pharmaceutical and biological products; and chemicals, etc.), our findings show that: (1) proactive CSR promotes exploratory innovation; (2) reactive CSR promotes exploitative innovation; (3) government support strengthen the relationship between proactive CSR and exploratory innovation as well as the relationship between reactive CSR and exploitative innovation; (4) social support weaken the relationship between proactive CSR and exploratory innovation. This paper enriches our understanding on the relationship between CSR and innovation, and provides implications for practitioners and policymakers.

Highlights

  • After decades of rapid economic development, sustainable economic growth has become an essential topic in China in consideration of population growth and environmental degradation

  • A high current ratio reflects low operational risk of distress or default, and a firm has high current ratio could have more resources available for innovation investments; (5) we control the return on assets ratio (ROA), which measures a firm’s financial performance; (6) we control the proportion of independent directors on board (IDB), which measures the performance of corporate governance and has been found that could impact innovation performance [79]; (7) we control the managerial ownership measured by the percentage of total equity owned by the chief executive officer (CEO)

  • Notes: CSR refers to corporate social responsibility; R&D refers to research and development; ROA refers to return on assets; IDB refers to the proportion of independent directors

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Summary

Introduction

After decades of rapid economic development, sustainable economic growth has become an essential topic in China in consideration of population growth and environmental degradation. As the most populous country, the largest manufacturer, and the largest non-renewable resources consumer in the world [1,2], China has adopted a series of practices to transform its national development strategy in recent years, from an economic-growth-oriented strategy to a more long-term and balanced economic-social development strategy [3,4,5] Such transformation in the national strategy has encouraged firms to engage in corporate social responsibility (CSR) and thereby grow in sustainable ways [6]. Recent studies from emerging economies, such as China, show evidence that both types of CSR can enhance innovation [19,20,21,22] These disparate results create grounds for further investigation. This paper further reveals the mechanism through which CSR impacts innovation in China by exploring the moderating role of institutional support (i.e., government support and social support) in the CSR–Innovation relationship. This paper provides implications for policymakers who are trying to push firms to grow in sustainable ways

CSR–Innovation Research
The Moderating Roles of Government and Social Support
Methodology
Dependent Variables
Independent Variable
There is a summary of cost savings arising from green initiatives to the firm
Moderating Variables
Control Variables
Model Specification
Descriptive Statistics
Regression Analysis
Test of Robustness
Discussion
Theoretical Contributions
Managerial Implications
Limitations and Future Research
Full Text
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