How High-Polluting Firms Suffer from Being Distracted form Intended Purpose: A Corporate Social Responsibility Perspective

Xue-Zhou Zhao, Jun Chen, Feng-Wen Chen, Wei Wang and Senmao Xia
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Xue-Zhou Zhao: School of Management and Engineering, Nanjing University, Nanjing 210093, China
Jun Chen: School of Management and Engineering, Nanjing University, Nanjing 210093, China
Feng-Wen Chen: School of Economics and Business Administration, Chongqing University, Chongqing 400030, China
Wei Wang: School of Management and Engineering, Nanjing University, Nanjing 210093, China
Senmao Xia: Business School, Coventry University, Coventry CV15FB, UK

IJERPH, 2020, vol. 17, issue 24, 1-29

Abstract: High-polluting industries are regarded as the main sources of air pollutant emissions and the major factors that significantly destroy the ecological environment. Corporate innovation in high-polluting industries improves the energy consumption efficiency and reduces the emission of air pollutant, which mitigates the conflict between environment and economy. Using the sample of China’s listed firms from 2010 to 2017, this study examines the impact of corporate social responsibility (CSR) and financialization on corporate innovation in high-polluting industries. The results show that there is a positive association between CSR and corporate innovation, while there is a negative association between financialization and corporate innovation. Furthermore, the financialization of high-polluting firms can alleviate the promotion role of CSR in the innovation process. The financialization of state-owned enterprises in high-polluting industries may not have a crowding-out effect on research and development (R&D), but it can limit the R&D promotion effect of CSR engagements. In contrast, the financialization of non-state-owned enterprises will hinder corporate innovation, but it will not affect the association between CSR and technology innovation. We also find that the financialization of high-polluting firms with low financial constraints can alleviate the promotion role of CSR engagements in innovation. Meanwhile, the CSR engagements of high-polluting firms with high financial constraints play a stronger role in corporate innovation. During the implementation of environmental policies, the negative association between financialization and corporate innovation has been strengthened. Our findings can encourage high-polluting firms to make more efforts in environmental protection and social stability.

Keywords: corporate innovation; corporate social responsibility; financialization; high-polluting industries; environmental protection (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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