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Firms' innovation strategy under the shadow of corporate social responsibility disclosure: Evidence from China

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  • William Mbanyele

Abstract

This paper examines how corporate social responsibility (CSR) disclosure impacts innovation using a sample of Chinese firms. We find that an increase in CSR disclosure leads firms to invest more in R&D investments and generate more patents. Additionally, our findings reveal that firms with high CSR disclosure nurture innovation by engaging less in short‐termism activities that crowd resources for innovation. Furthermore, we uncover that CSR disclosure promotes the optimum allocation of R&D expenditure by allocating risky capital towards good investment opportunities and away from poor investment opportunity sets. In addition, we show that CSR disclosure promotes innovation through information and human capital channels.

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  • William Mbanyele, 2022. "Firms' innovation strategy under the shadow of corporate social responsibility disclosure: Evidence from China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(2), pages 339-355, March.
    • Handle: RePEc:wly:mgtdec:v:43:y:2022:i:2:p:339-355
    DOI: 10.1002/mde.3386
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    Cited by:

    1. Jing‐Yue Liu & Yue‐Jun Zhang & Charles H. Cho, 2023. "Corporate environmental information disclosure and green innovation: The moderating effect of CEO visibility," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(6), pages 3020-3042, November.

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