Digital innovation and corporate social responsibility performance: Evidence from firms' digital patents

Abstract

The economic consequences of digital innovation have received increasing attention. However, the non-economic impacts of digital innovation on society have yet to be studied. This study investigates the relationship between digital innovation and corporate social responsibility (CSR) performance. Using text analysis to identify digital patents and measure firms' digital innovation, we find a positive relationship between digital innovation and CSR performance. The result still holds after considering endogeneity issues. In addition, the effect of digital innovation on CSR performance is more pronounced in firms with digital knowledge and high-tech firms. Furthermore, we find that digital innovation improves CSR performance by increasing employee income and reducing environmental pollution. This study contributes to the existing literature on the emerging field of digital innovation and provides new practical methods for firm managers to enhance CSR performance.