R&D investment and Chinese manufacturing SMEs' corporate social responsibility: The moderating role of regional innovative milieu. (10th June 2020) - Yu, Feifei
Abstract: Previous corporate social responsibility (CSR) research focused on large businesses rather than small and medium-sized enterprises (SMEs).With the transition of the Chinese economy, more attention has been given to the issue of how to motivate manufacturing SMEs to behave in a socially responsible manner. Although research and development (R&D) activities can enhance SMEs innovative abilities through the improvement of their production process and product quality, few studies have explored the direct influence of SMEs' R&D investment on CSR behavior. This paper explores the relationship between CSR and the R&D investment of Chinese manufacturing SMEs. Based on a balanced panel data of 657 listed manufacturing SMEs from 2015 to 2017, we used random effects regression to find an inverted U-shaped relationship between R&D investment and CSR of SMEs. Furthermore, the relationship is found to be flatter in SMEs that have a good record of regional innovation. The results of this study suggest that suitable investments in R&D and the availability of a fair and supportive environment for regional innovation are indispensable for fulfillment of CSR by SMEs.