The Effect of R&D Intensity on Corporate Social Responsibility

This study examines the impact that research and development (R&D) intensity has on corporate social responsibility (CSR). We select the companies that publish CSR reports from China growth enterprise market (GEM) from 2011 to 2015 as examples. Our results show that R&D intensity of the GEM has no significant effect on corporate social responsibility performance. This means GEM fails to take CSR into consideration and combine it with R&D as a development strategy of firms. To indentify the different relationships between industries, we extend our research by analyzing the impact that R&D intensity has on CSR across both CSR sensitive and non-sensitive industries. Our results show that the R&D intensity has a positive effect on CSR performance in CSR sensitive industry, while a non-significant result was obtained in non-sensitive industries, which means that the CSR sensitive industry is facing greater external pressures and those firms maintain a level of CSR by paying more attentions to CSR management. The managerial value of this study is that GEM should combine CSR with R&D as development strategy of firms, besides, they must improve their innovation abilities, finally, they need to identifying opportunities in their R&D process to initiate related CSR activities and make CSR-related process and products innovation. This will allow the company to manage costs more effectively and have a better financial performance.