The influence of financial performance on corporate social innovation

The study draws from the literature on corporate social innovation (CSI) and financial performance and extends previous studies about this relationship. In addition, given the scant literature on corporate social innovation, the paper tries to generate a common framework for this topic. It proposes a definition and a measure of CSI. The measure aims to reflect the contribution that firms make to society in terms of innovation. The sample includes firm observations that cover 6-year longitudinal panel data, including 1,122 firms in 29 countries. Our findings confirm that firms invest their financial resources (mainly firm performance) in CSI but, instead of investing immediately, take at least 1 year to do so. Stakeholder engagement, the relevance of sustainable innovation business models, and social and environmental policies contribute to integrating CSI. Our study contributes to filling the gap in the literature on CSI and provides several implications for NGOs, managers, and policymakers.