Corporate Social Responsibility, Absorptive Capacity, and Collaborative Innovation: International Evidence

Abstract

Collaborative innovation has become increasingly relevant for maintaining competitive advantage. Recent researchers posit that trust, which is core for collaborative innovation can be built through corporate social responsibility (CSR). Yet relatively little is known about the impact of CSR and its dimensions on collaborative innovation. Based on a panel data analysis covering the period 2009 to 2018, this thesis examines the relationship between Collaborative innovation and CSR on publicly listed manufacturing firms around the world and extends the literature by proposing that a firm's absorptive capacity exerts a moderating effect on this relationship. The study finds empirical evidence that supports the assertion that CSR promotes collaborative innovation. Importantly, the effect only manifests through the environmental dimension of CSR. The results also show that firms with higher absorptive capacities are more inclined to collaborate for innovation. However, the effect of CSR, especially the social and corporate governance dimensions on collaborative innovation dwindles in the presence of high absorptive capacity. These results have theoretical implications and provide valuable managerial recommendations for socially responsible firms that seek to form strategic alliances for innovation.