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The role of executive incentives and corporate social responsibility in driving corporate innovation

Author

Listed:
  • Li, Ying
  • Jin, Lina
  • Chen, Peilin

Abstract

This study used a sample dataset comprising Chinese A-share listed companies from 2012 to 2022 to examine the mechanisms and pathways through which executive incentives impact corporate innovation. It explores the mediating role of corporate social responsibility (CSR) within this context. Findings suggest that CEO compensation, honor, and power incentives significantly positively affect corporate innovation. Executive incentives have a positive impact on CSR, influencing corporate innovation indirectly through this intermediary variable. Additional analyses show that CEO compensation and honor incentives significantly and positively affect internal corporate responsibilities, comprising shareholder and employee obligations; power incentives do not demonstrate a significant impact in this regard. Concerning external corporate responsibilities, which encompass various stakeholders (suppliers, customers, consumers, the environment, and government), the positive effect of compensation incentives was not significant; however, honor incentives exhibit a significant and positive impact. This study provides theoretical and practical insights for companies in developing executive incentive policies and refine CSR fulfillment strategies while promoting innovation.

Suggested Citation

  • Li, Ying & Jin, Lina & Chen, Peilin, 2025. "The role of executive incentives and corporate social responsibility in driving corporate innovation," International Review of Financial Analysis, Elsevier, vol. 102(C).
    • Handle: RePEc:eee:finana:v:102:y:2025:i:c:s1057521925001966
    DOI: 10.1016/j.irfa.2025.104109
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