Post-Innovation CSR Performance and Firm Value

Abstract

Analyzing a sample of 13,917 U.S. firm-years from 1991 to 2006, we find that more innovative firms demonstrate high corporate social responsibility (CSR) performance subsequent to a successful innovation. These high-CSR innovative firms enjoy significantly higher valuation post-innovation. These findings imply that firms with demonstrated potential growth opportunities, as evident from the number of registered patents and their citations, benefit by strategically investing more in CSR activities; that is, CSR investment entails ‘doing well by [strategically] doing good’.

Keywords: Patents, Citations, Innovation, Corporate Social Responsibility, Tobin’s Q

JEL Classification: O3, G1, G3, D8