Corporate social responsibility, environmental product innovation and firm performance: Evidence from Chinese listed firms

Firms voluntarily incorporating corporate social responsibility (CSR) principles often assume they can benefit from some kind of competitive advantage. Yet, we know relatively little about the impact of different dimensions of CSR activities on firms' environmental innovation or their impact on performance. This paper distinguishes between the strategic and responsive dimensions of CSR and investigates how they affect different kinds of firms' environmental product innovation and the consequential firm performance. Using a unique data set of Chinese listed firms for the period 2008-2014, our empirical findings reveal that strategic CSR fosters sustainable product innovation (SPI) while responsive CSR positively influences pollution prevention product innovation (PPI). Our results further show that SPI mediates the relationship between strategic CSR and firm performance. Theoretical implication is discussed.