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Does CSR toward employees promote corporate innovation?

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  • Makpotche, Marcellin

Abstract

This study examined the impact of CSR toward employees (WS) on corporate innovation, using a sample of U.S. firms from 2002 to 2019. It provides the first evidence that better WS is beneficial for firms, resulting in a significant increase in both the quantity and the quality of patents. The positive impact of WS on innovation is more substantial in high R&D intensity and growing firms, while it is relatively weaker for mature firms. The study also explores how WS affects innovation output under various conditions and highlights the moderating role of corporate governance mechanisms, specifically the corporate governance score, board gender diversity, and auditor independence. Therefore, firms should enhance both their internal governance quality and WS to innovate.

Suggested Citation

  • Makpotche, Marcellin, 2025. "Does CSR toward employees promote corporate innovation?," Finance Research Letters, Elsevier, vol. 85(PB).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pb:s1544612325012607
    DOI: 10.1016/j.frl.2025.108002
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    Keywords

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    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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