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From corporate social responsibility to higher product quality: Unpacking the U-shaped relationship through resource allocation and efficiency

Author

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  • Zhou, Jin
  • Sui, Hongguang
  • Gao, Mingxiang

Abstract

Assessing the impact of corporate social responsibility (CSR) requires a comprehensive framework. This paper evaluates the effect of CSR from the perspective of export product quality. Using data from Chinese A-share listed companies from 2010 to 2016, we find that while CSR generally improves export product quality, this relationship is fundamentally U-shaped. Mechanism analysis shows that in the early stages, CSR increases symbolic expenditures such as advertising, which crowd out research and development (R&D) investments. However, after crossing a certain threshold, CSR promotes product quality by increasing R&D investment and improving R&D efficiency. Heterogeneity analysis reveals that this effect is significant for high-tech firms, non-state-owned enterprises, firms with lower financing constraints, products with longer quality ladders, and exports to non-OECD markets. Overall, our findings indicate that CSR is a key internal driver for endogenous R&D and product upgrading, rather than merely an external signal.

Suggested Citation

  • Zhou, Jin & Sui, Hongguang & Gao, Mingxiang, 2026. "From corporate social responsibility to higher product quality: Unpacking the U-shaped relationship through resource allocation and efficiency," Finance Research Letters, Elsevier, vol. 100(C).
    • Handle: RePEc:eee:finlet:v:100:y:2026:i:c:s1544612326004940
    DOI: 10.1016/j.frl.2026.109965
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