The Interaction Effect of CSR and Innovation on Firm’s Performance

Wen-Hua Huang, Yuan-Shuh Lii


Our CSR (corporate social responsibility) activities and innovation initiatives complementary?  From a resource-based perspective, managers would develop CSR and Innovation's business strategy to create heterogeneity and build sustainable competitive advantage. Based on instrumental theories, CSR is a means for firms to accomplish economic output; therefore, CSR may lead or utilize Innovation for this purpose. As CSR is getting more attention, and Innovation is important for a firm's growth, to find the interaction effect of CSR and Innovation is getting more important. However, to our limited knowledge, there are fewer studies and discussions about the topic. Thus, the research would develop a new analysis model to study the topic. Regarding the methodology, four questions are designed to be answered, and two categories of the dataset are collected. These questions are: (1) Does CSR have an impact on firms' performance? (2) Does long-term investment have an impact on the firm's performance? (3) Does R&D have an impact on a firm's performance? (4) How does the interaction of CSR and Innovation investment impact on firm's performance? The datasets include finical data and ESG (Environmental, Social, and Governance) ratings of firms. We would start the research from a typical industry in a country and look forward to a future extension to multiple industries across countries. We select Taiwan's electronics industry due to its important role in the global market, its leading position in Innovation, and its great efforts on CSR. So far, the research is still in progress. We would share the results, finding, and conclusion of the preliminary analysis. I look forward to your valuable comments for us to improve the analysis model and to find opportunities for further studies in other industries or other countries.


Environmental, Social and Governance (ESG), Corporate Social Responsibility (CSR), Innovation, Innovation Investment, Firm’s Performance

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