Pro-Social versus Anti-Social Innovation: The Role of Corporate Strategy, Governance and Resources

31 Pages Posted: 14 Apr 2020

See all articles by Kejia Hu

Kejia Hu

Vanderbilt University - Operations Management

Mark A. Cohen

Vanderbilt University - Strategy and Business Economics; Vanderbilt University - Law School; Resources for the Future

Date Written: March 19, 2020

Abstract

While innovation is generally thought to provide value to society, the organization literature is beginning to examine this issue more closely by noting that innovation may also lead to negative social outcomes - oftentimes unintended consequences of policies or market incentives to innovate. In this research, we investigate the firm-specific characteristics under which innovations are likely to result in socially desirable versus undesirable outcomes. Our empirical setting is the regulation of auto emissions in the EU. Using a unique 14-year on-road emission dataset and multiple sources to characterize individual automakers, we build a two-stage Heckman model to investigate how firms’ strategy, governance and resources impact the social value of their innovations. Our findings suggest that firms with superior internal governance, abundant resources, and those following a differentiation-oriented strategy are more likely to engage in pro-social innovations, while firms with weaker internal governance, limited resources, and those undertaking a cost-leadership strategy are more likely to engage in anti-social innovations. Our findings have both managerial and regulatory policy implications.

Suggested Citation

Hu, Kejia and Cohen, Mark A., Pro-Social versus Anti-Social Innovation: The Role of Corporate Strategy, Governance and Resources (March 19, 2020). Available at SSRN: https://ssrn.com/abstract=3557483 or http://dx.doi.org/10.2139/ssrn.3557483

Kejia Hu (Contact Author)

Vanderbilt University - Operations Management ( email )

Nashville, TN 37203
United States

Mark A. Cohen

Vanderbilt University - Strategy and Business Economics ( email )

Nashville, TN 37203
United States
615-322-0533 (Phone)

HOME PAGE: http://https://business.vanderbilt.edu/bio/mark-cohen/

Vanderbilt University - Law School

131 21st Avenue South
Nashville, TN 37203-1181
United States

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States
202-328-5000 (Phone)

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