Corporate social responsibility, innovation and firm value Online publication date: Thu, 02-Jul-2020
by Shahbaz Sheikh
International Journal of Business Governance and Ethics (IJBGE), Vol. 14, No. 3, 2020
Abstract: This study argues that corporate social responsibility (CSR) and firm innovation have long-term orientation and CSR is positively related to innovation. It explicitly recognises the endogeneity of CSR and innovation and uses 2SLS instrumental variable regressions to estimate the impact of CSR on innovation. Using a sample of 841 large US companies and 3,246 firm year observations for the period 1995-2006, it finds that CSR is positively associated with firm performance in innovation measured by patents and citations. Results also show that CSR strengths (concerns) have positive (negative) impact on innovation. Additional tests indicate that firm performance in innovation is positively related to industry adjusted Tobin's Q, suggesting that innovation is one of the channels through which CSR increases firm value. Overall, the empirical results indicate that CSR is a long-term strategic investment and its impact on firm value should be measured through its impact on firm innovation which is a good indicator of long-term value.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Business Governance and Ethics (IJBGE):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook