Are sustainable firms more innovative? The case of China

Although the impact of corporate social responsibility (CSR) on business and market performance has been getting attention in China, its influence on innovation outcomes has not been fully investigated. This study utilises patent information and CSR measurements from Orbis and Refinitiv, respectively, and empirically investigates the determinants of corporate innovation, focusing specifically on the influence of CSR. We find a positive relationship between CSR and innovation outcomes, namely patent applications and patents granted, which are also found in developed countries. Furthermore, our findings provide new insights into inconclusive factors such as the impact of Chinese economic policies or government ties on innovation performance. In particular, we find that government-owned firms no longer have a relative advantage in innovation.