Can strategic corporate social responsibility drive corporate innovation?

Purpose: In practice, an increasing number of economic entities have begun to consider strategic corporate social responsibility (CSR) as an opportunity to create a win-win situation for the organisation and the society. The existing literature has yet to soundly corroborate the role of strategic CSR in corporate innovation. This study examines the relationship between strategic CSR and innovation. Design/methodology/approach: The empirical regression models are estimated to analyse the data collected from 2817 firms yielding 18 845 firm-year observations from 2001 to 2014 in the United States. Findings/results: The findings indicate that firms with strategic CSR generate more and better innovation outputs. The positive effect is more pronounced when institutional ownership is lower, when firm size is larger, and when product market competition is more intense. In terms of economic consequences, firms with strategic CSR actually have higher commercial value and are less likely to suffer loss from failed innovation. Practical implications: To establish a sustainable relationship with stakeholders and realise the long-term development of business and society, enterprises should engage in strategic CSR in a planned manner based on their own resources and professional expertise. Originality/value: The study sheds light on a growing body of literature that investigates the real consequences of firms' strategic CSR, and explains the growing recognition of the importance of strategic CSR.