The Relationship between Innovation Intensity and Corporate Social Responsibility in US firms

Abstract

This study examines the role of corporate social responsibility (CSR) in moderating the relationship between innovation and firm performance. This study analyzes the CSR ratings and R&D intensity based on the resource-based view theory to identify the importance of intangible resources. Both CSR and R&D provide competitive advantages given by this theory. This study expects to see that if firms are more diversified, the moderating effect of CSR will be strengthened. The sample includes 11,093 observations over nine years. This study intends to help firms make effective strategies to allocate their intangible resources in managerial practice. After conducting a series of robustness checks, this study concludes that CSR has a positive moderation effect between innovation and the firm’s economic performance. Such an effect would wane in the group of less diversified firms.