Does corporate social responsibility impact firms' innovation capacity? The indirect link between environmental & social governance implementation and innovation performance

David C. Broadstock, Roman Matousek, Martin Meyer, Nickolaos G. Tzeremes

Research output: Journal article publicationJournal articleAcademic researchpeer-review

10 Citations (Scopus)

Abstract

Firms' choices on corporate social responsibility (CSR) and environmental, social and governance (ESG) implementation strategies can arguably have a positive impact on their value and performance. This “doing well by doing good” view remains debated in the literature. Our study contributes to this debate by investigating the impact of firms' engagement in ESG policies on their innovation capacity levels. More specifically, we apply a nonparametric frontier analysis framework to a sample of 320 Japanese firms over the period 2008–2016. Our study provides evidence of a nonlinear relationship between ESG policy adoption and firms' innovation capacity. In other words, our findings are consistent with a process of “indirect value-creation” under which firms' CSR/ESG policy adoption initially enhances their ability to pursue innovation activities and, then, eventually affects positively their value creation and financial/operational performance.

Original languageEnglish
JournalJournal of Business Research
DOIs
Publication statusAccepted/In press - 1 Jan 2019

Keywords

  • Corporate social performance (CSP)
  • Corporate social responsibility (CSR)
  • Efficiency and productivity
  • Environmental, social and governance (ESG)
  • Innovation capacity
  • Nonparametric analysis

ASJC Scopus subject areas

  • Marketing

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