The effects of corporate social responsibility on innovation and performance of firms in China: a structural equation model analysis

Abstract

Purpose This study aims to analyze and discuss the impact of corporate social responsibility (CSR) on firms’ performance, as well as to examine the interplay between CSR and the economy, society and innovation. Design/methodology/approach This paper collects data from 420 manufacturing firms across various geographical regions in China. By using a structural equation model, the paper investigates the impact of CSR on enterprise innovation, customer management capability, market competitiveness (MC) and firm financial performance. Findings The findings demonstrate that CSR performance positively contributes to enhancing the level of enterprise innovation, as well as customer management capability and market competitiveness. Furthermore, it assists enterprises in improving market competitiveness and elevating customer management capabilities. Thus, CSR can have a positive effect on the firm financial performance. Originality/value The outcomes presented in this paper offer valuable evidence regarding the influence of implementing CSR on different aspects of enterprise performance and innovation. Moreover, it provides practical recommendations for enterprises seeking to transition towards low-carbon practices and upgrade their manufacturing industry.