Article Details
Vol. 4 No. 3 (2022): December
Does Innovation Play a Role in the Relationship Between Corporate Social and Financial Performance? A Systematic Literature Review
Abstract
Purpose: This research aims to provide a comprehensive knowledge map of the intellectual structure of the field of study on the role of innovation in shaping the social and financial performance link.
Research methodology: Systematic literature review using the SALSA (Search, Appraisal, Synthesis, and Analysis) Method based on a 10-year data set (2012-2021) from the “Google Scholar” database.
Results: The findings point to the existence of a positive influence of innovation in linking Corporate Social Performance to firm Financial Performance and reveal the existence of five themes in the research, specifically complementarity between Corporate Social Responsibility and innovation, the special case of small and medium-sized enterprises, and the context of emerging countries. Also, we highlight a lack of research in this field and the theoretical, design, and methodological limitations of previous studies.
Conclusions: This study concludes that innovation positively links Corporate Social Performance (CSP) to Financial Performance (FP), with key themes emerging in CSR-innovation complementarity, SMEs, and emerging countries. However, the limited research in this area and methodological gaps highlight the need for further exploration, particularly in identifying the conditions through which innovation affects this relationship.
Limitations: The primary limitation of this study is the small number of studies that address the research question addressed by this systematic literature review, which was generated by the research protocol.
Contributions: The study suggests avenues for future research to address the previous shortcomings. Particularly, identifying the condition effects through which innovation may affect the studied relationship.
Keywords
How to Cite
Download Citation
References
- Aguilera?Caracuel, J., & Guerrero?Villegas, J. (2018). How corporate social responsibility helps MNEs to improve their reputation. The moderating effects of geographical diversification and operating in developing regions. Corporate Social Responsibility and Environmental Management, 25(4), 355-372. doi:https://doi.org/10.1002/csr.1465
- Al-Shuaibi, K. M. (2016). A structural equation model of CSR and performance: Mediation by innovation and productivity. Journal of Management and Sustainability, 6(2), 139-153. doi:https://doi.org/10.5539/jms.v6n2p139
- Alamgir, M., & Nasir Uddin, M. (2017). The mediating role of corporate image on the relationship between corporate social responsibility and firm performance: an empirical study. International Journal of Business and Development Studies, 9(1), 91-111. doi:https://doi.org/10.22111/ijbds.2017.3399
- Alzadjali, S. (2020). Impact of Corporate Social Responsibility on SMEs Performance: A Mediating Role of Innovation. iKSP J. Bus. Econ, 1, 14-23.
- Anser, M. K., Zhang, Z., & Kanwal, L. (2018). Moderating effect of innovation on corporate social responsibility and firm performance in realm of sustainable development. Corporate Social Responsibility and Environmental Management, 25(5), 799-806. doi:https://doi.org/10.1002/csr.1495
- Aupperle, K. E., Carroll, A. B., & Hatfield, J. D. (1985). An empirical examination of the relationship between corporate social responsibility and profitability. Academy of Management Journal, 28(2), 446-463. doi:https://doi.org/10.5465/256210
- Bahta, D., Yun, J., Islam, M. R., & Bikanyi, K. J. (2021). How does CSR enhance the financial performance of SMEs? The mediating role of firm reputation. Economic Research-Ekonomska Istraživanja, 34(1), 1428-1451. doi:https://doi.org/10.1080/1331677x.2020.1828130
- Barnett, M. L. (2007). Stakeholder influence capacity and the variability of financial returns to corporate social responsibility. Academy of management review, 32(3), 794-816. doi:https://doi.org/10.5465/amr.2007.25275520
- Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120. doi:https://doi.org/10.1177/014920639101700108
- Basti?, M., Mulej, M., & Zore, M. (2020). CSR and financial performance–linked by innovative activities. Naše gospodarstvo/Our economy, 66(2), 1-14. doi:https://doi.org/10.2478/ngoe-2020-0007
- Blanco, B., Guillamón-Saorín, E., & Guiral, A. (2013). Do non-socially responsible companies achieve legitimacy through socially responsible actions? The mediating effect of innovation. Journal of business ethics, 117(1), 67-83. doi:https://doi.org/10.1007/s10551-012-1503-3
- Bocquet, R., Le Bas, C., Mothe, C., & Poussing, N. (2017). CSR, innovation, and firm performance in sluggish growth contexts: A firm-level empirical analysis. Journal of business ethics, 146(1), 241-254. doi:https://doi.org/10.1007/s10551-015-2959-8
- Booth, A., Martyn-St James, M., Clowes, M., & Sutton, A. (2021). Systematic approaches to a successful literature review. doi:https://doi.org/10.4135/9781036232009
- Bouslah, K., Kryzanowski, L., & M’zali, B. (2013). The impact of the dimensions of social performance on firm risk. Journal of Banking & finance, 37(4), 1258-1273. doi:https://doi.org/10.1016/j.jbankfin.2012.12.004
- Bramer, W. M., De Jonge, G. B., Rethlefsen, M. L., Mast, F., & Kleijnen, J. (2018). A systematic approach to searching: an efficient and complete method to develop literature searches. Journal of the Medical Library Association: JMLA, 106(4), 531-541. doi:https://doi.org/10.5195/jmla.2018.283
- Busch, T., & Schnippering, M. (2022). Corporate social and financial performance: Revisiting the role of innovation. Corporate Social Responsibility and Environmental Management, 29(3), 635-645. doi:https://doi.org/10.1002/csr.2225
- Castelo Branco, M., & Lima Rodrigues, L. (2006). Communication of corporate social responsibility by Portuguese banks: A legitimacy theory perspective. Corporate communications: An international journal, 11(3), 232-248. doi:https://doi.org/10.1108/13563280610680821
- Cegarra-Navarro, J.-G., Reverte, C., Gómez-Melero, E., & Wensley, A. K. (2016). Linking social and economic responsibilities with financial performance: The role of innovation. European Management Journal, 34(5), 530-539. doi:https://doi.org/10.1016/j.emj.2016.02.006
- Chaudhry, N. I., Aftab, I., Arif, Z., Tariq, U., & Roomi, M. A. (2019). Impact of customer-oriented strategy on financial performance with mediating role of HRM and innovation capability. Personnel Review, 48(3), 631-643. doi:https://doi.org/10.1108/PR-02-2018-0056
- Cochran, M. (2011). International perspectives on early childhood education. Educational Policy, 25(1), 65-91. doi:https://doi.org/10.1177/0895904810387789
- Commission, E. (2006). Implementing The Partnership for Growth and Jobs: Making Europe A Pole of Excellence on CSR 09-11.
- Commission, E. (2010). Europe 2020: A Strategy for Smart, Sustainable and Inclusive Growth.
- Commission, E. (2011). Renewed EU strategy 2011-14 for Corporate Social Responsibility (CSR).
- Conesa, J. A. B. (2014). Implantación de la Responsabilidad Social en la Administración Pública: el caso de las Fuerzas Armadas Españolas. CONSEJO EDITORIAL.
- Crossan, M. M., & Apaydin, M. (2010). A multi?dimensional framework of organizational innovation: A systematic review of the literature. Journal of management studies, 47(6), 1154-1191. doi:https://doi.org/10.1111/j.1467-6486.2009.00880.x
- Doh, J. P., Howton, S. D., Howton, S. W., & Siegel, D. S. (2010). Does the market respond to an endorsement of social responsibility? The role of institutions, information, and legitimacy. Journal of Management, 36(6), 1461-1485. doi:https://doi.org/10.1177/0149206309337896
- Drucker, P. (2017). The age of discontinuity: Guidelines to our changing society: Routledge.
- El Amri, A., Boutti, R., & Rodhain, F. (2020). Sustainable Finance at the time of Institutions: Performativity through the lens of Responsible Management in Morocco. Financial Markets, Institutions and Risks, 4(2), 52-64. doi:https://doi.org/10.21272/fmir.4(2).52-64.2020
- El Amri, A., Oulfarsi, S., Eddine, A. S., El Khamlichi, A., Hilmi, Y., Ibenrissoul, A., . . . Boutti, R. (2022). Carbon financial market: The case of the EU Trading Scheme Handbook of Research on Energy and Environmental Finance 4.0 (pp. 424-445): IGI Global Scientific Publishing.
- El Fallahi, F. (2021). The impact of CSR policies on banks firm risk perception. Revue Management des Systèmes d’Information et Innovation, 5(1), 46-61. doi:https://doi.org/10.34874/IMIST.PRSM/ISMI/27717
- El Idrissi, I., & Alami, Y. (2021). The financial impacts of board mechanisms on performance: The case of listed Moroccan banks. International Journal of Financial, Accounting, and Management, 3(2), 93-113. doi:https://doi.org/10.35912/ijfam.v3i2.536
- Elkington, J., & Rowlands, I. H. (1999). Cannibals with forks: The triple bottom line of 21st century business. Alternatives Journal, 25(4), 42.
- Fama, E. F., & French, K. R. (2004). The capital asset pricing model: Theory and evidence. Journal of economic perspectives, 18(3), 25-46. doi:https://doi.org/10.1257/0895330042162430
- Fischer, T. M., & Sawczyn, A. A. (2013). The relationship between corporate social performance and corporate financial performance and the role of innovation: Evidence from German listed firms. Journal of management control, 24(1), 27-52. doi:https://doi.org/10.1007/s00187-013-0171-5
- Fox, T. (2004). Corporate social responsibility and development: In quest of an agenda. Development, 47(3), 29-36. doi:https://doi.org/10.1057/palgrave.development.1100064
- Freeman, R. E. (2010). Strategic management: A stakeholder approach: Cambridge university press.
- Frimousse, S., & Peretti, J.-M. (2020). Impact social positif et création de valeur. Question (s) de management(1), 91-130. doi:https://doi.org/10.3917/qdm.201.0091
- Frooman, J. (1997). Socially irresponsible and illegal behavior and shareholder wealth: A meta-analysis of event studies. Business & Society, 36(3), 221-249. doi:https://doi.org/10.1177/000765039703600302
- García?Morales, V. J., Lloréns?Montes, F. J., & Verdú?Jover, A. J. (2008). The effects of transformational leadership on organizational performance through knowledge and innovation. British journal of management, 19(4), 299-319. doi:https://doi.org/10.1111/j.1467-8551.2007.00547.x
- Guérard, S. (2006). Regards croisés sur l'économie mixte: Approche pluridisciplinaire-Droit public et droit privé: Editions L'Harmattan.
- Guerrero?Villegas, J., Sierra?García, L., & Palacios?Florencio, B. (2018). The role of sustainable development and innovation on firm performance. Corporate Social Responsibility and Environmental Management, 25(6), 1350-1362. doi:https://doi.org/10.1002/csr.1644
- Hadja, T. B., Omria, A., & Al-Tita, A. (2020). Mediation role of responsible innovation between CSR strategy and competitive advantage: Em-pirical evidence for the case of Saudi Arabia enterprises. Management Science Letters, 10, 747-762. doi:https://doi.org/10.5267/j.msl.2019.10.022
- Hadjimanolis, A., & Dickson, K. (2000). Innovation strategies of SMEs in Cyprus, a small developing country. International Small Business Journal, 18(4), 62-79. doi:https://doi.org/10.1177/0266242600184004
- Handayani, R., Juzilam, S., Daulay, M., & Ruslan, D. (2020). The implementation of energy subsidy reduction policy on the Indonesian economy performance. International Journal of Financial, Accounting, and Management, 1(4), 235-246. doi:https://doi.org/10.35912/ijfam.v1i4.154
- Hitt, M. A., Hoskisson, R. E., Johnson, R. A., & Moesel, D. D. (1996). The market for corporate control and firm innovation. Academy of Management Journal, 39(5), 1084-1119. doi:https://doi.org/10.5465/256993
- Hlioui, Z., & Yousfi, O. (2020). CSR and innovation: Two sides of the same coin. doi:https://doi.org/10.5772/intechopen.94344
- Hull, C. E., & Rothenberg, S. (2008). Firm performance: The interactions of corporate social performance with innovation and industry differentiation. Strategic management journal, 29(7), 781-789. doi:https://doi.org/10.1002/smj.675
- Hult, G. T. M., Nichols Jr, E. L., Giunipero, L. C., & Hurley, R. F. (2000). Global organizational learning in the supply chain: a low versus high learning study. Journal of International Marketing, 8(3), 61-83. doi:https://doi.org/10.1509/jimk.8.3.61.19628
- Husser, J., André, J. M., Barbat, G., & Lespinet?Najib, V. (2012). CSR and sustainable development: are the concepts compatible? Management of Environmental Quality: An International Journal, 23(6), 658-672. doi:https://doi.org/10.1108/14777831211262936
- Jalali, S., & Wohlin, C. (2012). Systematic literature studies: database searches vs. backward snowballing. Paper presented at the Proceedings of the ACM-IEEE international symposium on Empirical software engineering and measurement.
- Jamali, D. (2009). Constraints and opportunities facing women entrepreneurs in developing countries: A relational perspective. Gender in management: an international journal, 24(4), 232-251. doi:https://doi.org/10.1108/17542410910961532
- Kammoun, S., Romdhane, Y. B., Loukil, S., & Ibenrissoul, A. (2021). An examination of linkages between corporate social responsibility and firm performance: Evidence from Moroccan listed firms. Estudios Gerenciales, 37(161), 636-646. doi:https://doi.org/10.18046/j.estger.2021.161.4010
- Khabsa, M., Elmagarmid, A., Ilyas, I., Hammady, H., & Ouzzani, M. (2016). Learning to identify relevant studies for systematic reviews using random forest and external information. Machine Learning, 102(3), 465-482. doi:https://doi.org/10.1007/s10994-015-5535-7
- Lahouirich, M. W., El Amri, A., Oulfarsi, S., Sahib Eddine, A., El Bayed Sakalli, H., & Boutti, R. (2022). From financial performance to sustainable development: A great evolution and an endless debate. doi:https://doi.org/10.21272/fmir.6(1).68-79.2022
- Laursen, K., & Salter, A. (2006). Open for innovation: the role of openness in explaining innovation performance among UK manufacturing firms. Strategic management journal, 27(2), 131-150. doi:https://doi.org/10.1002/smj.507
- Li, Z., Liao, G., & Albitar, K. (2020). Does corporate environmental responsibility engagement affect firm value? The mediating role of corporate innovation. Business strategy and the environment, 29(3), 1045-1055. doi:https://doi.org/10.1002/bse.2416
- Lopatta, K., Jaeschke, R., & Chen, C. (2017). Stakeholder engagement and corporate social responsibility (CSR) performance: International evidence. Corporate Social Responsibility and Environmental Management, 24(3), 199-209. doi:https://doi.org/10.1002/csr.1398
- MacGregor, S. P., Espinach, X., & Fontrodona, J. (2007). Social innovation: Using design to generate business value through corporate social responsibility. Paper presented at the DS 42: Proceedings of ICED 2007, the 16th International Conference on Engineering Design, Paris, France, 28.-31.07. 2007.
- Manual, O. (2005). The measurement of scientific and technological activities. Proposed guidelines for collecting an interpreting technological innovation data, 30(162), 385-395.
- Margolis, J. D., & Walsh, J. P. (2003). Misery loves companies: Rethinking social initiatives by business. Administrative science quarterly, 48(2), 268-305. doi:https://doi.org/10.2307/3556659
- Marin, L., Martín, P. J., & Rubio, A. (2017). Doing good and different! The mediation effect of innovation and investment on the influence of CSR on competitiveness. Corporate Social Responsibility and Environmental Management, 24(2), 159-171. doi:https://doi.org/10.1002/csr.1412
- Martinez, W. L., & Martinez, A. R. (2001). Computational statistics handbook with MATLAB: Chapman and Hall/CRC.
- Mathieu, A. (2006). Développement durable et entreprises: du concept à la typologie. Gestion 2000, 1(1), 3.
- McGuire, J. B., Sundgren, A., & Schneeweis, T. (1988). Corporate social responsibility and firm financial performance. Academy of Management Journal, 31(4), 854-872. doi:https://doi.org/10.5465/256342
- McWilliams, A., & Siegel, D. (2000). Corporate social responsibility and financial performance: correlation or misspecification? Strategic management journal, 21(5), 603-609. doi:https://doi.org/10.1002/(SICI)1097-0266(200005)21:5<603::AID-SMJ101>3.0.CO;2-3
- Mengist, W., Soromessa, T., & Legese, G. (2020). Method for conducting systematic literature review and meta-analysis for environmental science research. MethodsX, 7, 100777. doi:https://doi.org/10.1016/j.mex.2019.100777
- Munyawarara, N., & Govender, K. K. (2020). Clustering the agricultural SME sector in Eastern Highlands, Zimbabwe. International Journal of Financial, Accounting, and Management, 1(4), 247-255. doi:https://doi.org/10.35912/ijfam.v1i4.139
- Musah, A., & Adutwumwaa, M. Y. (2021). The effect of corporate governance on financial performance of rural banks in Ghana. International Journal of Financial, Accounting, and Management, 2(4), 305-319. doi:https://doi.org/10.35912/ijfam.v2i4.336
- Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of financial economics, 13(2), 187-221. doi:https://doi.org/10.1016/0304-405X(84)90023-0
- Nidumolu, R., Prahalad, C. K., & Rangaswami, M. R. (2009). Why sustainability is now the key driver of innovation. Harvard business review, 87(9), 56-64. doi:https://doi.org/10.1109/emr.2015.7123233
- Niedergassel, B., & Leker, J. (2009). Open innovation: chances and challenges for the pharmaceutical industry (Vol. 1, pp. 1197-1200): Taylor & Francis.
- Nybakk, E. (2012). Learning orientation, innovativeness and financial performance in traditional manufacturing firms: a higher-order structural equation model. International Journal of innovation management, 16(05), 1250029. doi:https://doi.org/10.1142/S1363919612003873
- Orlitzky, M. (2008). Corporate social performance and financial performance: A research synthesis. doi:https://doi.org/10.1093/oxfordhb/9780199211593.003.0005
- Orlitzky, M., Schmidt, F. L., & Rynes, S. L. (2003). Corporate social and financial performance: A meta-analysis. Organization studies, 24(3), 403-441. doi:https://doi.org/10.1177/0170840603024003910
- Padgett, R. C., & Galan, J. I. (2010). The effect of R&D intensity on corporate social responsibility. Journal of business ethics, 93(3), 407-418. doi:https://doi/10.1007/s10551-009-0230-x
- Phillips, V., & Barker, E. (2021). Systematic reviews: Structure, form and content. Journal of perioperative practice, 31(9), 349-353. doi:https://doi.org/10.1177/1750458921994693
- Pittaway, L., Robertson, M., Munir, K., Denyer, D., & Neely, A. (2004). Networking and innovation: a systematic review of the evidence. International journal of management reviews, 5(3?4), 137-168. doi:https://doi.org/10.1111/j.1460-8545.2004.00101.x
- Podsakoff, P. M., MacKenzie, S. B., Bachrach, D. G., & Podsakoff, N. P. (2005). The influence of management journals in the 1980s and 1990s. Strategic management journal, 26(5), 473-488. doi:https://doi.org/10.1002/smj.454
- Porter, M. E., & Kramer, M. (2011). The Big Idea: Creating Shared Value. How to Reinvent Capitalism—and Unleash a Wave of Innovation and Growth. 89(1-2), 62-77.
- Ratnawati, Soetjipto, B. E., Murwani, F. D., & Wahyono, H. (2018). The role of SMEs’ innovation and learning orientation in mediating the effect of CSR programme on SMEs’ performance and competitive advantage. Global Business Review, 19(3), S21-S38. doi:https://doi.org/10.1177/0972150918757842
- Roszkowska-Menkes, M. T. (2018). Integrating strategic CSR and open innovation. Towards a conceptual framework. Social Responsibility Journal, 14(4), 950-966. doi:https://doi.org/10.1108/SRJ-07-2017-0127
- Russo Spena, T., & De Chiara, A. (2012). CSR, innovation strategy and supply chain management: toward an integrated perspective. International Journal of Technology Management, 58(1/2), 83-108. doi:https://doi.org/10.1504/IJTM.2012.045790
- Saunila, M., Pekkola, S., & Ukko, J. (2014). The relationship between innovation capability and performance: The moderating effect of measurement. International Journal of Productivity and Performance Management, 63(2), 234-249. doi:https://doi.org/10.1108/IJPPM-04-2013-0065
- Schnippering, M. (2020). Revisiting the Relationship between Corporate Social and Financial Performance. Staats-und Universitätsbibliothek Hamburg Carl von Ossietzky.
- Seifert, B., Morris, S. A., & Bartkus, B. R. (2004). Having, giving, and getting: Slack resources, corporate philanthropy, and firm financial performance. Business & Society, 43(2), 135-161. doi:https://doi.org/10.1177/0007650304263919
- Singer, A. E. (2006). Business strategy and poverty alleviation. Journal of business ethics, 66(2), 225-231. doi:https://doi.org/10.1007/s10551-005-5587-x
- Spence, L. J., Schmidpeter, R., & Habisch, A. (2003). Assessing social capital: Small and medium sized enterprises in Germany and the UK. Journal of business ethics, 47(1), 17-29. doi:https://doi.org/10.1023/A:1026284727037
- Szutowski, D., & Bednarska, M. (2014). Short-and Long-term Effects of Innovations on Enterprise Market Value: a case of the tourism industry. Journal of Entrepreneurship, Management and Innovation, 10(4), 45. doi:https://doi.org/10.7341/20141042
- Tidd, J., & Bessant, J. (2021). Managing Innovation Integrating Technological, Market and Organizational Change.
- Tranfield, D., Denyer, D., & Smart, P. (2003). Towards a methodology for developing evidence?informed management knowledge by means of systematic review. British journal of management, 14(3), 207-222. doi:https://doi.org/10.1111/1467-8551.00375
- Tukur, S., Shehu, J., Mammadi, A., & Sulaiman, U. A. (2019). An assessment of corporate social responsibility of property developers in Bauchi Metropolis, Nigeria. International Journal of Financial, Accounting, and Management, 1(2), 119-129. doi:https://doi.org/10.35912/ijfam.v1i2.109
- Ullmann, A. A. (1985). Data in search of a theory: A critical examination of the relationships among social performance, social disclosure, and economic performance of US firms. Academy of management review, 10(3), 540-557. doi:https://doi.org/10.5465/amr.1985.4278989
- Venkatraman, N., & Ramanujam, V. (1986). Measurement of business performance in strategy research: A comparison of approaches. Academy of management review, 11(4), 801-814. doi:https://doi.org/10.5465/amr.1986.4283976
- Visser, W. (2016). The future of CSR: Towards transformative CSR, or CSR 2.0 Research handbook on corporate social responsibility in context (pp. 339-367): Edward Elgar Publishing.
- Waddock, S. A., & Graves, S. B. (1997). The corporate social performance–financial performance link. Strategic management journal, 18(4), 303-319. doi:https://doi.org/10.1002/(SICI)1097-0266(199704)18:4<303::AID-SMJ869>3.0.CO;2-G
- Wei, J., Peng, X.-r., & Zhang, Y. (2012). CSR strategy, green innovation, and firm performance: A conceptual framework. Paper presented at the 2012 international symposium on management of technology (ISMOT).
- Zahid, M., Naeem, H., Aftab, I., & Mughal, S. A. (2021). From corporate social responsibility activities to financial performance: role of innovation and competitive advantage. Asia Pacific Journal of Innovation and Entrepreneurship, 15(1), 2-13. doi:https://doi.org/10.1108/APJIE-04-2020-0046
- Zaugg, V., Savoldelli, V., Sabatier, B., & Durieux, P. (2014). Améliorer les pratiques et l'organisation des soins: méthodologie des revues systématiques. Santé publique, 26(5), 655-667. doi:https://doi.org/10.3917/spub.145.0655
- Zenko, Z., & Mulej, M. (2011). Diffusion of innovative behaviour with social responsibility. Kybernetes, 40(9/10), 1258-1272. doi:https://doi.org/10.1108/03684921111169378
License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.