Sustainability-oriented social responsibility and corporate innovation

Abstract

This paper empirically examines how sustainability-oriented social responsibility influences corporate innovation quantity and radical innovation from the perspectives of environment- and employee-oriented social responsibility. Both forms of social responsibility are found to contribute significantly to corporate innovation. Corporate environment-oriented responsibility increases innovation by increasing R&D. Employee-oriented responsibility increases innovation by helping firms retain talent; by motivating employees, employee-oriented social responsibility promotes both innovation quantity and radical innovation. Furthermore, both environment- and employee-oriented responsibility can alleviate financing constraints, and the positive effects of environment- and employee-oriented responsibility on radical innovation and innovation quantity, respectively, increase total factor productivity. Following sustainable development theory, this paper analyzes the heterogeneous mechanisms of the influences of environment- and employee-oriented social responsibility on corporate innovation and provides empirical evidence of high-quality, innovation-driven corporate development through social responsibility.