Corporate social responsibility as environmental innovation fuel: Do innovation ambition and innovation capability really matter?

(1)

Corporate social responsibility as environmental

innovation fuel: Do innovation ambition and

innovation capability really matter?

Master Thesis MSc BA – Strategic Innovation Management

Author: Iva Georgieva Tsvetkova Student number: S3829286

University of Groningen Faculty of Economics and Business

Supervisor: dr. T.L.J. Broekhuizen Co-assessor: M. Hanisch Date of submission: July, 13th 2020

(2)

1

Abstract

This study uses stakeholder theory to examine the role of CSR in explaining environmental innovation. Engaging with various stakeholders yields the establishment of long-term meaningful relationships, which lead to enhancing the organizational capability of the firms, learning from others, and knowledge co-creation. Further, under stakeholder pressure, CSR leads to higher levels of innovation ambition but there is a missing link to the development of eco-innovations. Deployed throughout the company, CSR can be expected to improve innovation ambition and capabilities. Using insights from innovation and CSR literature, this study hypothesizes a direct impact of CSR on eco-innovations and an indirect impact through the mediation role of innovation capability and innovation ambition. The conceptual model was tested by using survey data from 279 SMEs located in the three Northern provinces in the Netherlands. The results show that higher CSR leads to higher environmental innovation performance, whereas no evidence was found for the mediated relationship of CSR on environmental innovation through innovation ambition and innovation capability. Thus, CSR is used instrumentally through integrating into and shaping the overall company’s strategy and realizing environmental innovation directly, rather than also stimulating a more innovative disposition for the whole organization.

(3)

2

1 Introduction

The concept of corporate social responsibility (henceforth CSR) is a product of the twentieth century, formed in the early 1950s and has become highly relevant nowadays. The CSR movement has become a global phenomenon in the past twenty years with launching various volunteer initiatives and others under legal and regulatory pressure to adopt them (Carroll, 2008). The research community has defined CSR and addressed its multifaceted character. This study follows the notion of Lyon and Maxwell (2008) that CSR can be defined as the integration of environmentally friendly and voluntary actions that internalize environmental externalities and concern the main stakeholders. While CSR is often related to corporate sustainability (henceforth CS), the two concepts are theoretically distinct (Montiel, 2008; Szczuka, 2015). The concept of CSR states that corporations have liabilities to the society at large, not only to their key stakeholders, which go beyond the reach of the governments and other public institutions. The acceptance of this responsibility is considered to be voluntary, and the consequent obligations concern a wider scope than the most apparent stakeholders like employees, suppliers, and customers (Jones, 1980). CSR accounts for social and environmental issues, blurring the research boundaries even more. Thus, CSR and CS may have different evolution paths but ultimately share the same future.

(5)

4

Accordingly, CSR translates itself in an alignment of the social and corporate objectives as a strategic tool to achieve the economic goals (Mishra and Suar, 2010). Apart from wealth maximization corporate investments, some investors seek socially responsible investment opportunities, which can create economic value for the firm (Mackey et al., 2007). The research and findings on CSR links to firm financial performance are mixed. The link between CSR and profitability has exhibited positive, negative, and neutral relationships. A lack of research exists that focuses on other important outcomes that may determine CSR’s ultimate impact on firm performance and profitability. Despite that CSR’s focus may result in innovations that help to address the needs of society, the literature has not investigated how CSR may stimulate firms’ innovative performance. While existing research has identified innovation performance as an important moderator that increases the positive impact of CSR on overall firm performance (Martinez-Conesa et al., 2017), it has not addressed whether CSR in itself determines innovation performance.

Despite the modest existing literature on CSR and innovation in general, there is a lack of research and understanding about the influence of such activities on a specific but important subset of innovations for CSR – environmental innovations. From a theoretical standpoint (Wagner, 2010), researchers acknowledge the existence of the relationship between CSR and innovation but empirical research is rarely available to support this assumption. CSR and innovation are perceived as the foundation of business growth (Rexhepi et al., 2013), therefore the lack of substantial knowledge on the mechanisms behind the appearance and development of the relationship is of importance to academics, firms, and relevant stakeholders. Stakeholder theory provides clarity on the underlying mechanisms behind the relationship (Bocquet and Mothe, 2011; Gallego‐Álvarez et al., 2011; Martinez-Conesa et al., 2017). From a theoretical perspective, CSR and stakeholder theory are distinct concepts with a certain overlap in the literature regarding the stress on the importance of incorporating societal interests into the business operations (Freeman and Dmytriyev, 2017). In response to a call from Bocquet et al. (2011) to investigate the direct effect of instrumental CSR on innovation, this study investigates the direct and indirect effect of CSR on environmental innovation.

(6)

5

To answer the research question, this research uses the existing survey dataset of the Northern Netherlands Innovation Monitor 2019, consisting of279 SMEs. To understand how CSR impacts firms’ innovativeness, this study tries to highlight the mediating paths of CSR on environmental innovation by analyzing their innovation capability and ambition. For this reason, the research fits the opportunity-motivation-ability framework (Hostager et al., 1998) that illustrates how perceived ability and motivation influence the recognition of environmental innovation opportunities. Stakeholders play an important role in the creation and recognition of environmental opportunities to firms (Laplume et al., 2008). They impose stakeholder pressure on firms to change through innovation development, which influences companies’ innovation ambition (Guoyou et al., 2013). Lastly, stakeholders’ relationships are crucial sources of knowledge and competences, facilitating further organizations’ innovation capability development (Freeman and Dmytriyev, 2017). The results from this paper exhibit the direct and strong effect of CSR on firms’ environmental innovation performance, but this effect is not mediated via innovation capability and ambition.

(7)

6

(8)

7

2 Corporate Social Responsibility’s Influence on Environmental

Innovation

2.1 Conceptual Framework

The conceptual model is based on the opportunity-motivation-ability perspective (Hostager et al., 1998). This model has been shown to explain organizations’ responses to disruptions in their environment as the need for new technological solutions rises. Hostager et al. (1998) argue that as environmental pressures rise, environmental opportunities are born. These opportunities can become attractive to companies, as they are seen as potential sources of novel products, services, and markets. Companies adjust their values, and further motivation, to pursue these opportunities. In order to do so, they must develop the internal ability or so-called intrapreneurship to identify these new ideas and develop them.

To analyze the complex interplay between CSR, innovation capability, innovation ambition, and environmental innovation, this research investigates the direct and indirect effect of CSR and its corresponding activities on environmental innovation for SMEs. It analyzes the possible existence of direct impact of CSR on environmental innovations (H1), and the possible the indirect influence of innovation ambition (H2) and/or innovation capability (H3) on eco-innovations through mediation.

(9)

8

2.2 Eco-innovation (Green innovations)

The innovation umbrella comprises of diversified types, including new products or services, process technologies, organization structures or administrative systems, or plans and programs pertaining to organization members. Innovation orientation and activities are found to be positively related to the company’s performance and value creation (Rosenbusch et al., 2011) and lead to greater opportunities for enterprises to gain a competitive advantage (Abd Aziz and Samad, 2016).

With the increasing attention for environmental concerns and climate crisis, firms shift more toward acting responsibly and reducing their ecological footprint. In doing so, they transition towards finding sustainable solutions in response to stricter environmental regulations. They respond to and seize opportunities to develop environmental innovations (also known as eco-innovations). Firms can take advantage of these opportunities by developing the ability to perform a range of various tasks related to environmental intrapreneurship. Intrapreneurship is defined as individuals and groups of employees working within the company to identify new products and services ideas, considering the environment (e.g. resource usage efficiency, pollution reduction, recycling materials, energy efficiency, and others). A key intrapreneurial task is to seek opportunities (Hostager et al., 1998) for optimization and greening the firms’ production process.

Environmental innovations are significant strategic means to derive sustainable development across various industries. For the purpose of this study, I rely on the given definition of eco-innovation by Kemp and Pearson (2007, p.7): “...a product, production process, service or management, or business method that is novel to the organization (developing or adopting it) and which results, throughout its life cycle, in a reduction of environmental risk, pollution and other negative impacts of resource use (including energy use) compared to relevant alternatives”.

(10)

9

occur as by-products of production. End-of-pipe technologies could not be totally replaced by cleaner production ones. Both technologies will always be a present mix depending on the underlying environmental targets, technology options, and related costs. From an environmental and economic perspective, cleaner production technologies are perceived as superior compared to end-of-pipe technologies. The aim of environmental innovations is to systematically align sustainability endeavors and ambitions within a firm’s strategy, and implement the strategy throughout the supply chain, from novel product and service development to end consumption (Sezen and Cankaya, 2013).

Eco-friendly businesses can provide value to society beyond the provision of economic growth and employment opportunities. These are important, but the main aim of an organization should be to develop innovative products. Supposedly, products that will generate growth and employment places while at the same time being economical, accessible to everyone, and environmental. Sustainability is viewed as the new imperative for companies, so the growth has to be tempered in favor of sustainable strategies and innovations (Ahlstrom, 2010).

2.3 Corporate Social Responsibility (CSR)

(11)

10

return of investment to stakeholders, offer vacancies and equitable remuneration, encourage technological innovation and product refinement (Chang, 2014).

Porter and Kramer (2011) believe that the majorities of companies perceive value creation as short-term financial performance optimization and neglect various determinants for their long term success. The tenet of shared value lies in the premise of bringing businesses and society back together, by means of addressing the societal needs and challenges in the creation process. Organizations can innovate around social harms and weaknesses such as waster energy or raw materials, which frequently create internal costs, and subsequently, increase their productivity and expand their market. Not every CSR activity falls under the shared value creation framework but in the case of innovation development – it does (MacGregor and Fontrodona, 2008).

Previous research posits the premise of the stakeholder approach to CSR, where the companies should acknowledge a commitment to take care of traditional interest groups as well as silent stakeholders – for e.g. local communities and the environment (Simmons, 2004). Stakeholders are defined as: "those groups who can affect or are affected by the achievement of an organization’s purpose" (Freeman, 1983; 2010, p. 49). While stakeholder theory emphasizes the company’s overall key responsibilities towards its various stakeholders (i.e. corporate responsibilities), CSR accounts for the responsibilities towards the local communities in which the business operates and the society (i.e. social responsibilities). Thus, CSR prioritizes only one part of the corporate responsibilities and has an orientation towards the society at large (i.e. social orientation) over the other responsibilities (Freeman and Dmytriyev, 2017). With regard to stakeholder theory, CSR is considered as the outcome of the relational accumulating process of (smaller) companies building their social capital. Nevertheless, CSR should not be viewed only as a final result but also as a process itself that is considered in all the decision-making (Jones, 1980).

(12)

11

learning from others and knowledge co-creation. Firms require complex and diverse knowledge (Hart and Sharma, 2004) during their innovation process, which requires input from multiple external parties such as the firm’s relevant stakeholders (Kazadi et al., 2016). The social orientation of CSR includes every stakeholder as relevant because they are part of society as a whole. Stakeholder relationships and interactions are important for knowledge transfer within and across the firms’ boundaries. Significant stakeholders with respect to the innovation process are other firms, the government, policy-makers, customers, R&D institutions, and universities. Through the interaction with secondary stakeholders, the firms discover untapped opportunities to bring in more voices into the innovation process and further establish new ways of approaching problems (Ayuso, 2011).

As every organization has various (implicit) obligations towards society; they make use of different degrees and kinds of CSR strategies to fulfill them. These diverse strategies constitute the long-established typology “reaction-defense-accommodation-proaction” (Carroll, 1979; Torugsa et al., 2012; Wartick and Cochran, 1985; Wilson, 1975). Companies function along a continuum of CSR varying from reactive to proactive in nature. Environmental performance depends on markets and governments to set the tone but they are fluctuating and susceptible to failure. Through a long-term commitment to environmental proactivity, companies can avoid this failure. Hence, the government is a key stakeholder, guiding the right direction of firms’ innovation development by providing relevant incentives, research, and knowledge. An organization’s dedication to environmentalism explains the adoption of proactive environmental strategies and environmental innovations. The paper of Branzei et al., (2000) found that the choice of a proactive strategy towards environmentalism has a significant positive effect on a company’s environmental innovation development. Proactively pursued and integrated CSR supports environmental integrity and protection with the aid of responsible business strategies that adhere to the economic, social, and environmental principles of sustainable development beyond complying with the government regulations. By doing so, the company strives to minimize its ecological footprint along the whole product life cycle through a focus on innovation, eco-efficiency, pollution prevention, and environmental leadership (Aragon-Correa, 1998; Buysse and Verbeke, 2003; Torugsa et al, 2012).

(13)

12

more environmental innovations because their complex nature requires additional incentive, competencies, and knowledge. Companies with lower CSR may not be able to recognize the added value of these eco-innovations because they are more interested in the financial pay-off.

Therefore, I hypothesize the following:

Hypothesis 1: Corporate Social Responsibility (CSR) positively influences a firm’s environmental innovation.

2.4 Innovation Ambition

(14)

13

has a social responsibility as a core value; therefore, it will implement CSR as a strategic tool towards achieving its vision.

The implementation of CSR leads to engagement with more stakeholders (Goodman et al., 2017) and in particular environmental ones. Henriques and Sadorsky (1999) give a classification of four groups of environmental stakeholders: regulatory (e.g. governments), organizational (e.g. customers), community (e.g. NGOs), and the media. These various stakeholders impose stakeholder pressure on the organizations about greening their strategies through the development of environmental innovation products and processes (Guoyou et al., 2013). The firms’ desire to meet these needs shape their innovation orientation (Ayuso et al., 2011) through the motivation to push their ambition level of innovation. The different types of stakeholders’ demands and influences lead to different types of sustainable practices and solutions. They range from fundamental matters such as pollution prevention and eco-efficiency to intermediate phases as material recycling and process redesign to responding to advanced issues as a redefinition of businesses and industrial ecosystems (Sharma and Henriques, 2005; Garcés‐Ayerbe et al., 2012).

Hypothesis 2: The positive effect of Corporate Social Responsibility (CSR) on Environmental Innovation is fully mediated by Innovation Ambition.

2.5 Innovation Capability

(15)

14

Lawson and Samson, 2001, p.384). Ability stands for the full range of resources and capabilities available for the company in the pursuit of intrapreneurial activities such as innovation. Innovation capabilities are needed for the recognition of possible environmental innovation opportunities (Hostager et al., 1998). Zawislak and Alves (2012) treat innovation capability, as a meta-capability, as an integration of four complementary capabilities: technological meta-capability, operations capability, management capability, and transaction capability. According to the authors, innovation could emerge from any of the complementary capabilities and every innovative company has the four of them to some extent. To innovate, one of the capabilities has to always be predominant in accordance with the current company’s aim and strategy. The implemented CSR activities that establish a proactive environmental strategy and company culture, which are in the pursuit of environmental technological innovation, are relying on such integrated innovation capability with a prevalent technological complementary capability.

A firm’s resources and capabilities display a crucial set of internal factors influencing eco-innovations. The RBV theory posits that innovation activities heavily depend on their valuable, inimitable, and non-substitutable resources and capabilities, possessed by the organization (Barney, 1991). Technological capabilities play important role in RBV (Barney, 1991; Teece et al., 1997) because the underlying knowledge of technology is tacit and difficult to code; it is complex and context-specific (Cainelli et al., 2015; Martín‐de‐Castro et al., 2011). Usually, technological and managerial capabilities enhance environmental process innovation (e.g., cleaner production and end-of-pipe). The technical knowledge obtained from external sources as agencies, research institutes, and universities is found to positively influence such eco-innovations (Horbach et al., 2012). Building upon the social capital (Russo and Perrini, 2010) enhances the firm’s innovation capability and further improve the innovation output. Organizations need significant internal research capability to recognize, understand, appraise, and apply internal and external knowledge (Rosenberg, 2010). An important by-product of the innovation capability is the creation of firm-specific knowledge that enables the absorption of knowledge and technology generated externally (Cohen and Levinthal, 1989; Rothaermel and Hess, 2007).

(16)

15

innovation is a prerequisite for the environmental innovation generation. Other authors (Chassagnon and Haned, 2015; Sierzchula et al., 2012; Tsai and Liao, 2017) found with regards to manufacturing industries, that the previously developed innovation capabilities have a positive and enhancing effect on eco-innovations. Arranz et al., (2019) exhibit the existence of parallelism between the knowledge and skills necessary for the development of innovation and environmental innovation and interrelationships between both processes. In conclusion, organizations that already have developed innovations are more likely to develop eco-innovations.

Companies with a higher level of CSR tend to have an improved innovation capability through their greater openness and responsiveness to the external environment (Lim and Greenwood, 2017). These firms are more aware and attuned to their environment by continuously listening to different stakeholders, which makes them more receptive to the changes. By doing so, the organizations build knowledge of their stakeholders, strengthen their innovation capability and respond with innovative solutions.

(17)

16

3 Methodology

3.1 Data and Sample

This study uses an existing dataset from the Northern Netherlands Innovation Monitor, which intends to identify and analyze the innovation activities and performances of SMEs in the Northern Netherlands. The participating SMEs are located in any of the three main Northern provinces: Drenthe, Groningen, and Friesland. The main purpose of the project is to provide detailed information about the characteristics and behavior of these companies. The Monitor focuses on innovation topics and other additional insights such as digitalization; innovation (product, service, process and organizational); investments in research and development; collaboration with partners; human resources; market conditions, and environmental factors. The collection of the data has been performed by the University of Groningen through a large-scale yearly survey on a firm-level basis. Every year, the University of Groningen invites more than 5,000 SMEs for the survey. As the majority of respondents are executives and in order to increase the response rate, sometimes reminders are sent and non-responding companies are further contacted by phone. The questions differ per year, and for this research, I will be using the data from the one conducted in 2019. The reason for this is the emphasis of the questionnaire on social challenges and environmental innovations this year. The sample consists of a total of 279 companies, which indicated that they have introduced an environmental innovation in the period of 2016-2018. Additionally, other respective variables for this sample are innovation ambition, innovation capability, industry, firm size, and subsidy.

3.2 Measurements

3.2.1 Dependent Variable

(18)

17

questions could only be answered with either a ‘no’ (score 0) or a ‘yes’ (score 1). I transform the 6 dummy variables into an overall score to represent environmental innovation performance, which ranges from a minimum score of ‘0’ (all 6 items indicated as ‘no’) to a maximum score of ‘6’ (all items indicated as ‘yes’).

3.2.2 Independent Variables

Corporate Social Responsibility (CSR) – To measure CSR, the SMEs were asked to what extent they respond to the following social challenges: (1) health, demography and well-being (2) food security, sustainable agriculture and bio-economy (3) secure, clean and efficient energy (4) clean safe water supply. The responses lie on the Likert 4-point scale for surveys (Brown, 2010) from “no” (scores as 1), “little” (scores as 2), “medium” (scores as 3), and “a lot” (scores 4). The variable is created through the transformation of the four items into one ordinal variable, varying from a minimum score of 1 (all four items indicated as “no”) to a maximum score of 4 (all four items indicated as “a lot”).

3.2.3 Mediating Variables

Innovation Ambition – Innovation ambition refers to the motivation and objectives the company has in the field of innovation. Thus, to measure it the companies were asked about the importance of the following innovation ambitions: (1) developing new knowledge that can lead to new innovations (2) finding new solutions for technological bottlenecks (3) converting innovations into concrete business activities. The question uses a 4-point Likert scale for surveys (Brown, 2010) responses that vary from “not important at all” (score as 1), “not really important” (score as 2), “pretty important” (score as 4) and “very important” (score as 5). I transform the three items into a composite score, which ranges from a minimum score of 1 (all three items indicated as “not important at all”) to a maximum score of 5 (all three items indicated as “very important”).

(19)

18 3.2.4 Control Variables

Industry – In the context of CSR as a predictor of innovation, the research of Rexhepi et al. (2013) exhibits significant results for manufacturing firms producing more product and process innovations than service ones. This study will follow the work of Rexhepi et al. (2013), and transform the eight industry categories into reclassification of two main industries: manufacturing (e.g., construction, manufacturing) and service industry (financial services, and consultancy). It is transformed into dummy variable denoting firms active in the manufacturing industry score as 1, whereas those in the service industry score as 0.

Firm Size – In the context of researching environmental innovations in SMEs, Triguero et al. (2013) have found that firm size leads to significant differences in their composition across companies. They claim size corresponds to their eco-innovativeness. Respondents were asked to report how many employees they have. We use the firm size variable as a discrete variable consisting of the micro (below 10 employees), small (between 10 and 100 employees) and medium (above 100 employees) categories of enterprises. The firm size variable was positively skewed with many firms having very few or even zero employees. To address this issue, and to use the natural logarithm of the variable, I added a constant of 1.

(20)

19

Intellectual Property Protection Mechanisms – According to Derzko (1996) environmental innovation should not only be encouraged but also protected. To account for firm heterogeneity in IPR usage, this study uses firm responses on the use of the following protection mechanisms with regard to its innovations: (1) patents, (2) design rights, (3) trademarks, (4) copyrights, and (5) secrecy. Similar to the environmental innovation variable, a composite score is created, based on the five dummy variables that were answered with either a ‘no’ (score 0) or a ‘yes’ (score 1). The 5 dummy variables display an overall score to represent IP-protection, which ranges from a minimum score of ‘0’ (all 5 items indicated as no) to a maximum score of ‘5’ (all items indicated as yes).

3.3 Testing procedure

Baron and Kenny (1986) describe the mediator as a third variable that has the role of a generative mechanism by which the focal independent variable could influence the dependent variable. I will test standard mediation tests through a series of regression models (Baron and Kenny, 1986; Judd and Kenny, 1981b), and perform four regression equations in the following order: first, regressing the independent variable (CSR) on the dependent variable (Eco-innovation); second, testing the relationship between the independent variable (CSR) and the two mediators (Innovation Ambition and Innovation Capability); third, using the independent variable (CSR) and mediators (Innovation Ambition and Innovation Capability) as a predictor for (Eco-Innovation), and lastly, run the whole mediation model. By analyzing models 3 and 4, it is possible to address the amount of mediation that occurs.

(21)

20

4 Results

4.1 Descriptive Statistics and Correlations

Table 1 reports the descriptive statistics and correlations of the sample of 279 companies.

(22)

(23)

(24)

23

4.2 Hypothesis Testing

Table 3 represents the results of the linear regression. The two series of regression analyses increased the complexity of the model according to the stage.

Model 1 – baseline model – The first analysis includes solely the control variables and their reflection on the dependent variable environmental innovation. Except for intellectual property, all the variables demonstrate a positive, significant relationship. Firm size (β = 0.006; p < 0.05) is positive and highly significant, but the coefficient is quite small.Industry (β = 0.747; p < 0.01) is positive and highly significant, whereby an increase of a unit in the industry (i.e., shifting from service to manufacturing industry) impacts the environmental innovation. Subsidy (β = 1.932; p < 0.01) is positive and highly significant, which means that the more firms are inclined to request subsidies, the more they produce environmental innovation. Interestingly, intellectual property (β = -0.041; p < 0.01) is negative and significant, which suggests that it negatively impacts environmental innovation. The control variables, without any of the predictor variables, account for 11.7% of the variance in the environmental innovation.

(25)

(26)

25

Table 4 represents the results from the regression analysis tested through Process Macro in SPSS, including innovation ambition as a mediator.

Model 1 – CSR effect on environmental innovation – Model 1 remains the same for Table 4 and Table 5, because it consists of the same independent and dependent variables, and has the same outcome.

Model 2 – This model reflects the influence of the independent variable CSR on the mediator innovation ambition. CSR (β = 0.185; p < 0.01) has a highly significant and positive impact on innovation ambition, where a unit increase in CSR effort manifests an innovation ambition increase. There are two significant control variables, subsidy (β = 1.702; p < 0.01) and intellectual property (β = - 0.010; p < 0.05). The subsidy has a positive, whereas intellectual property has a negative effect. About 15% of the variance in innovation ambition is explained by this model.

Model 3 - The full mediation model consists of control variables, independent variable, mediator, and dependent variable. The influence of CSR (β = 1.212; p < 0.01) on environmental innovation remains highly significant and positive, where a unit increase in CSR effort manifests in an increase in environmental innovation. This suggests that the direct effect is highly salient. Innovation ambition does not have an effect on environmental innovation. Therefore, there is no significant mediation effect. The only significant and positive control variable is industry (β = 0.795; p < 0.01). Lastly, the variance explained is 24.5%.

(27)

(28)

27

Table 5 represents the results from the linear regression analysis tested through Process Macro in SPSS, including innovation capability as a mediator.

Model 1 - CSR effect on Environmental Innovation – Model 1 shows that the direct effect of the independent variable CSR on the dependent variable environmental innovation (β = 1.244; p < 0.01) is positive and highly significant. Industry (β = 0.802; p <0.01), again has a positive influence, suggesting that firms active in manufacturing have a higher environmental innovation. The R-square of the model explains 24.1% of the variance in environmental innovation.

Model 2 – CSR effect on Innovation Capability – This model exhibits the impact of the independent variable CSR on the mediator innovation capability. CSR does not significantly impact Innovation Capability, as the p-value of 0.110 is (just) above the 10% threshold. The only significant and positive control variable is intellectual property (β = 0.168; p < 0.01). Furthermore, the R-square is 0.079, which indicates that 7.92% of the variance in innovation capability is explained by the propped model.

(29)

(30)

29

Table 6 represents an overview of the full mediation models of innovation capability and innovation ambition as mediators tested through Process Macro in SPSS. The “proportion mediated” or the proportion of the effect is calculated as the ratio of the indirect effect to the total effect, e.g. PM=IE/TE, and multiply by 100 to transform into a percentage (VanderWeele, 2013).

Model 1 – Innovation Capability Mediator – An insignificant indirect effect exists on CSR on environmental performance via innovation capability. The bootstrapping results show that the mediation effect intervals do not exclude 0. Therefore, hypothesis 2 is not confirmed. The direct even is much higher and highly significant. Despite this, the proportion of the effect (1.825%), arising from the mediation, is very small. Hence, there is no mediation.

(31)

(32)

31

4.3 Robustness checks and additional testing

I have conducted several robustness checks to perform a stronger test for the hypotheses.

To assess the consistency of the findings, the same conceptual model was tested using alternative measures for the mediators. Rather than measuring innovation capability on a firm’s introduction of product, process, or organizational innovations in the past two years, I used a firm’s R&D activities to proxy innovation capability. Using two additional items (ratio of internal R&D expenditures to total revenues & number of directly involved R&D employees), I developed a new measure for innovation capability. To make the two items comparable, I transformed the number of R&D employees into a percentage (using the firm with the highest score as 100%). The alternative variable of innovation capability is transformed and created through the sum of the variables R&D internal expenditures and R&D employees and divided by 2. When the model was tested with the new variable through linear regression following the four steps of Baron and Kenny (1986) and Process Macro, it shows the same results as the initial model. The results remain insignificant and innovation capability does not mediate the CSR-environmental performance relationship. The insignificant indirect effect of the variable account for proportion mediated of 0%. This means that 100% explains the direct effect of CSR (β = 1.228; p < 0.01) on environmental innovations.

Rather than measuring the mediation variable innovation ambition through three items (knowledge development, solution-seeking, and innovation development), I used an alternative measure that takes the ratio of the number of personnel involved in R&D activities relative to the total number of employees within the company. Using the new transformed variable as replacement of innovation ambition, I again find that the results show an insignificant mediation relationship. The indirect effect of the newly created innovation ambition variable accounts for 0%, while CSR (β = 1.206; p < 0.01) directly impact environmental innovation with 100%. These results provide additional evidence that CSR’s effect on environmental performance is not mediated by the important innovation mediators, but only has a strong direct effect.

(33)

32

results are different. This time innovation ambition (β = 0.362; p < 0.01) and eco-innovations (β = 0.915; p < 0.01) are both positively influenced by the subsidy and indicate that companies should aim to apply for environmental subsidies to enhance their green innovation performance.

5 Discussion

5.1 Conclusion

This research aimed to increase the understanding of how CSR impacts environmental innovation performance. Particularly, how CSR impacts a firm’s environmental innovation performance, as measured by the introduction of two types of eco-innovations – cleaner production and end-of-pipe technologies. To further explore how CSR impacts firms’ environmental innovativeness, this study investigated its direct and indirect effects. In doing so, it has tried to analyze the mediated effects of CSR on environmental innovation via influencing innovation capability and innovation ambition. Results of 279 Dutch SMEs show that CSR has a direct and strong impact on firms’ environmental innovation performance, but that its effect is neither mediated via innovation capacity nor via ambition. Hence, the limited predictive validity and insignificant mediation effects suggest that innovation capability and innovation ambition do not matter in explaining the CSR-environmental performance relationship. This study contributes to the environmental innovation and CSR literature as previous empirical research on the direct and indirect effect of CSR on eco-innovations is limited. The findings are indicative of SMEs considering CSR as an opportunity to realize environmental innovation in response to regulations, stakeholder needs, and the changing market environment. They seem to make use of it instrumentally (i.e., to realize environmental innovation output), but CSR does not lead to a higher innovation disposition that allows motivating eco-innovation via increased innovation motivation or innovation capability. This instrumental approach keeps in mind the significance of stakeholder engagement for innovation enhancement, through learning from other and knowledge diversification.

5.2 Theoretical Implications

(34)

33

CSR as a strategic extension on innovation. This study contributes to the existing literature by providing an empirical insight into the direct effect of CSR on eco-innovations, where it drives higher environmental performance. The underlying mechanism is based on stakeholder theory, where the corporate responsibilities are overlapping with social responsibilities. The organization strives to create value for every stakeholder and establish meaningful relationships through, which important innovation prerequisites as knowledge and competencies are exchanged (Freeman and Dmytriyev, 2017). In line with existing literature on stakeholder theory, this stakeholder engagement help firms further developing their organizational capability (Lessens et al., 2006) and enhance their social capital (Russo and Perrini, 2010) , which is associated with improved innovation capability. Notwithstanding, the results do not provide support for the hypotheses, where CSR would indirectly impact environmental performance by motivating firms to innovate more (innovation ambition) and through enhancing their ability to innovate (innovation capability). Interestingly, a higher level of CSR is associated with higher innovation ambition, but this innovation motivation is not translated into environmental innovations. Perhaps, stakeholder pressure from environmental stakeholders (Guoyou et al., 2013) is enough to drive innovation ambition but the lack of incentives such as environmental subsidies (Xie et al., 2015) is the missing piece. Further research should investigate the impact of various innovation subsidies on environmental innovation performance.

(35)

34

5.3 Managerial Implications

The findings of this study suggest firms who seek to enhance their environmental innovation performance should implement CSR as a strategic tool. The strong, positive, and direct influence of CSR on eco-innovations exhibits its instrumental function and immediate yield of innovations. With regards to realizing green innovations, the companies should invest in CSR, which is considered to shape an effective reactive or proactive strategy (Carroll, 1979; Torugsa et al., 2012; Wartick and Cochran, 1985; Wilson, 1975). The direct effect is dominant and firms should not expect the same results through indirect improvements via innovation ambition and innovation capability. The mediating relationships are not significant, but as shown in table 5, model 2, CSR does lead to higher innovation ambition. These results may provide an additional mechanism to enhance CSR’s impact on environmental performance. To capitalize on this increase in innovation ambition, firms should find a way how to translate this higher innovation ambition into realizing environmental innovations. The results show that various innovation subsidies also positively influence innovation ambition but have no effect on eco-innovations. The robustness test exhibit that VIA (the accelerate innovation ambitions subsidy) has a positive influence on both innovation ambition and environmental innovations. Perhaps, firms need incentives as environmental subsidies (Bai et al., 2019; Xie et al., 2015) to translate this innovation ambition into green innovation development.

Furthermore, the industry has an impact on environmental innovation performance and the whole model. The results indicate that firms operating in the manufacturing industry realize more eco-innovations. This suggests that currently, service companies do not face such high external pressures from environmental policies, which triggers the adoption of green innovations (Desmarchelier et al., 2013). The services firms use CSR as a rather environmental orientation enhancing the brand performance through greenwashing. Instead, they can use CSR instrumentally and proactively seek to adopt or co-create eco-innovations, which will prepare them for future regulations requirements related to environmental performance.

(36)

35

that need the financial support of public funds (Horbach et al., 2012).

5.4 Limitations and future research

This study has several limitations that provide suggestions for further research opportunities. First, the generalizability of this study can be limited. The data of the Innovation Monitor Survey consist of only SMEs and future research should access the findings for larger corporations. While firm size does not directly influence the implementation of CSR, size implies various organizational characteristics, which are more or less advantageous for CSR implementation (Baumann-Pauly et al., 2013), and is also found to negatively affect environmental performance. Third, the study only focuses on firms located in the three northern provinces of the Netherlands. The results may differ if the research is conducted in other regions or countries. For example, research conducted in the South of the Netherlands found that a strategic view on CSR is an insufficient condition for organizations to undertake measures to enhance CSR. Instead, CSR is associated with moral commitment and lead to intrinsic motivation different than performance enhancement behind its pursuit (Graafland and Van de Ven, 2006).

Second, this research relies on cross-sectional data that is insufficient to establish proof of causality. To overcome common method variance, which results from single-source studies, and to establish causality, future research should collect longitudinal data and focus on patterns observation, and deeper analysis on how CSR changes may affect subsequent environmental performance in later stages. A longitudinal study over a longer period of time with a larger and more inclusive sample size could confirm the causal mediated relationship between CSR and eco-innovation through eco-innovation ambition and eco-innovation capabilities, thus allowing for broader generalizability in findings.

(37)

36

Fourth, there is a limitation of the current measure for CSR as it covers only several aspects such as ‘Health, demography and well-being’, ‘Food security, sustainable agriculture, and the bio-economy’, ‘Secure, clean and efficient energy’ and ‘Clean, safe water supply’. Three of the measurement items are associated with sustainable development, which may influence the strength of the relationship with environmental innovations. Further research should apply a broader CSR and more objective measures including items related to the society at all.

(38)

37

6 References

Abd Aziz, N. N., & Samad, S. (2016). Innovation and competitive advantage: Moderating effects of firm age in foods manufacturing SMEs in Malaysia. Procedia Economics and Finance, 35(2016), 256-266.

Ahlstrom, D. (2010). Innovation and growth: How business contributes to society. Academy of management perspectives, 24(3), 11-24.

Aragon-Correa, J. A. (1998). Strategic proactivity and firm approach to the natural environment. Academy of Management Journal, 41(5), 556-5

Arranz, N., F. Arroyabe, C., & Fernandez de Arroyabe, J. C. (2019). The effect of regional factors in the development of eco‐innovations in the firm. Business Strategy and the Environment, 28(7), 1406-1415.

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.

Ayuso, S., Rodríguez, M. Á., García‐Castro, R., & Ariño, M. Á. (2011). Does stakeholder engagement promote sustainable innovation orientation?. Industrial Management & Data Systems.

Bai, Y., Song, S., Jiao, J., & Yang, R. (2019). The impacts of government R&D subsidies on green innovation: Evidence from Chinese energy-intensive firms. Journal of cleaner production, 233, 819-829.

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of management, 17(1), 99-120.

Baron, R. M., & Kenny, D. A. (1986). The moderator–mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of personality and social psychology, 51(6), 1173.

Baumann-Pauly, D., Wickert, C., Spence, L. J., & Scherer, A. G. (2013). Organizing corporate social responsibility in small and large firms: Size matters. Journal of business ethics, 115(4), 693-705.

(39)

38

Boesso, G., Kumar, K., & Michelon, G. (2013). Descriptive, instrumental and strategic approaches to corporate social responsibility. Accounting, Auditing & Accountability Journal.

Bossle, M. B., de Barcellos, M. D., Vieira, L. M., & Sauvée, L. (2016). The drivers for adoption of eco-innovation. Journal of Cleaner production, 113, 861-872.

Breznik, L., & Hisrich, R. D. (2014). Dynamic capabilities vs. innovation capability: are they related?. Journal of small business and enterprise development.

Brown, S. (2010). Likert scale examples for surveys. ANR Program evaluation, Iowa State University, USA.

Blättel-Mink, B. 1998. “Innovation towards Sustainable Economy-The Integration of Economy and Ecology in Companies.” Sustainable Development 6 (2): 49–58.

Branzei, O., Vertinsky, I., & Zietsma, C. (2000, August). FROM GREEN-BLINDNESS TO THE PURSUIT OF ECO-SUSTAINABILITY: AN EMPIRICAL INVESTIGATION OF LEADER COGNITIONS AND CORPORATE ENVIRONMENTAL STRATEGY CHOICES. In Academy of management proceedings (Vol. 2000, No. 1, pp. C1-C6). Briarcliff Manor, NY 10510: Academy of Management.

Buysse, K., & Verbeke, A. (2003). Proactive environmental strate gies: A stakeholder management perspective. Strategic Man agement Journal, 24(5), 453-4

Cainelli, G., De Marchi, V., & Grandinetti, R. (2015). Does the development of environmental innovation require different resources? Evidence from Spanish manufacturing firms. Journal of Cleaner Production, 94, 211-220.

Carroll, A. B. (1979). A three-dimensional conceptual model of corporate performance. Academy of management review, 4(4), 497-505.

Carroll, A. B. (2008). A history of corporate social responsibility: Concepts and practices. The Oxford handbook of corporate social responsibility, 19-46.

Chang, C. H. (2016). The determinants of green product innovation performance. Corporate Social

Responsibility and Environmental Management, 23(2), 65-76.

Chassagnon, V., & Haned, N. (2015). The relevance of innovation leadership for environmental benefits: A firm-level empirical analysis on French firms. Technological Forecasting and social change, 91, 194-207.

Cohen, W. M., & Levinthal, D. A. (1989). Innovation and learning: the two faces of R & D. The economic

journal, 99(397), 569-596.

Cochran, P. L., & Wood, R. A. (1984). Corporate social responsibility and financial performance. Academy

(40)

39

Derzko, N. M. (1996). Using intellectual property law and regulatory processes to foster the innovation and diffusion of environmental technologies. Harv. Envtl. L. Rev., 20, 3.

Desmarchelier, B., Djellal, F., & Gallouj, F. (2013). Environmental policies and eco-innovations by service firms: An agent-based model. Technological Forecasting and Social Change, 80(7), 1395-1408. Donalson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and

implications. Academy of management Review, 20(1), 65-91.

Dormann, C. F., Elith, J., Bacher, S., Buchmann, C., Carl, G., Carré, G., ... & Münkemüller, T. (2013). Collinearity: a review of methods to deal with it and a simulation study evaluating their performance.

Ecography, 36(1), 27-46.

Duarte, F. (2010). Social Responsibility as Organizational Culture in a Brazilian Mining Company: A Three–Perspectival Narrative. Journal of Organizational Culture, Communications and

Conflict, 14(1), 13-31.

Duarte, F. (2011). What does a culture of corporate social responsibility “look” like? A glimpse into a Brazilian mining company. International Journal of Business Anthropology, 2(1). European Commission. (2003). Responsible entrepreneur ship: A collection of good practice cases

among small and medium sized enterprises across Europe. Belgium: Bruxelles

Frondel, M., Horbach, J., & Rennings, K. (2007). End‐of‐pipe or cleaner production? An empirical comparison of environmental innovation decisions across OECD countries. Business

strategy and the environment, 16(8), 571-584.

Freeman, R. E. (1983). Strategic management: A stakeholder approach. Advances in strategic

management, 1(1), 31-60.

Freeman, R. E. (2010). Strategic management: A stakeholder approach. Cambridge university press. Freeman, R. E., & Dmytriyev, S. (2017). Corporate social responsibility and stakeholder theory: Learning

from each other. Symphonya. Emerging Issues in Management, (1), 7-15.

Gallego‐Álvarez, I., Prado‐Lorenzo, J. M., & García‐Sánchez, I. M. (2011). Corporate social responsibility and innovation: A resource‐based theory. Management Decision.

Garcés‐Ayerbe, C., Rivera‐Torres, P., & Murillo‐Luna, J. L. (2012). Stakeholder pressure and environmental proactivity. Management Decision.

Goodman, J., Korsunova, A., & Halme, M. (2017). Our collaborative future: Activities and roles of stakeholders in sustainability‐oriented innovation. Business Strategy and the Environment, 26(6), 731-753.

Graafland, J., & Van de Ven, B. (2006). Strategic and moral motivation for corporate social responsibility.

Journal of Corporate Citizenship, (22), 111-123.

(41)

40

Guoyou, Q., Saixing, Z., Chiming, T., Haitao, Y., & Hailiang, Z. (2013). Stakeholders' influences on corporate green innovation strategy: a case study of manufacturing firms in China. Corporate Social

Responsibility and Environmental Management, 20(1), 1-14.

Jones, T. M. (1980). Corporate social responsibility revisited, redefined. California management

review, 22(3), 59-67.

Joy, S. P. (2005). Innovation motivation and artistic creativity. The Journal of Creative Behavior, 39(1), 35-56.

Joy, S. P. (2008). Personality and creativity in art and writing: Innovation motivation, psychoticism, and (mal) adjustment. Creativity Research Journal, 20(3), 262-277.

Joyner, B. E., & Payne, D. (2002). Evolution and implementation: A study of values, business ethics and corporate social responsibility. journal of Business Ethics, 41(4), 297-311.

Judd, C. M., & Kenny, D. A. (1981). Process analysis: Estimating mediation in treatment evaluations. Evaluation review, 5(5), 602-619.

Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (1998). Multivariate data

analysis (Vol. 5, No. 3, pp. 207-219). Upper Saddle River, NJ: Prentice hall.

Hart, S. L. (1995). A natural-resource-based view of the firm. Academy of management review, 20(4), 986-1014.

Hart, S. L., & Sharma, S. (2004). Engaging fringe stakeholders for competitive imagination. Academy of

Management Perspectives, 18(1), 7-18.

Hayes, A. F. (2017). Introduction to mediation, moderation, and conditional process analysis: A

regression-based approach. Guilford publications.

Henriques, I., & Sadorsky, P. (1999). The relationship between environmental commitment and managerial perceptions of stakeholder importance. Academy of management Journal, 42(1), 87-99.

Hofmann, K. H., Theyel, G., & Wood, C. H. (2012). Identifying firm capabilities as drivers of environmental management and sustainability practices–evidence from small and medium‐sized manufacturers.

Business Strategy and the Environment, 21(8), 530-545.

Horbach, J., Rammer, C., & Rennings, K. (2012). Determinants of eco-innovations by type of environmental impact—The role of regulatory push/pull, technology push and market pull. Ecological economics,

78, 112-122.

Hostager, T. J., Neil, T. C., Decker, R. L., & Lorentz, R. D. (1998). Seeing environmental opportunities: effects of intrapreneurial ability, efficacy, motivation and desirability. Journal of Organizational

Change Management.

(42)

41

Joyner, B. E., Payne, D., & Raiborn, C. A. (2002). Building values, business ethics and corporate social responsibility into the developing organization. Journal of developmental

entrepreneurship, 7(1), 113.

Kazadi, K., Lievens, A., & Mahr, D. (2016). Stakeholder co-creation during the innovation process: Identifying capabilities for knowledge creation among multiple stakeholders. Journal of business

research, 69(2), 525-540.

Kemp, R., & Pearson, P. (2007). Final report MEI project about measuring eco-innovation. UM

Merit, Maastricht, 10, 2.

Kenny, T. (1994). From vision to reality through values. Management development review.

Laplume, A. O., Sonpar, K., & Litz, R. A. (2008). Stakeholder theory: Reviewing a theory that moves us. Journal of management, 34(6), 1152-1189.

Lawson, B. and Samson, D.(2001), “Developing innovation capability in organizations: a dynamic capabilities approach”, International Journal of Innovation Management, Vol. 5 No. 3, pp. 377-400.

Lenssen, G., Gasparski, W., Rok, B., Lacy, P., Ayuso, S., Rodríguez, M. Á., & Ricart, J. E. (2006). Using stakeholder dialogue as a source for new ideas: a dynamic capability underlying sustainable innovation. Corporate Governance: The international journal of business in society.

Lim, J. S., & Greenwood, C. A. (2017). Communicating corporate social responsibility (CSR): Stakeholder responsiveness and engagement strategy to achieve CSR goals. Public Relations Review, 43(4), 768-776.

Litz, R. A. (1996). A resource-based-view of the socially responsible firm: Stakeholder interdependence, ethical awareness, and issue responsiveness as strategic assets. Journal of Business Ethics,

15(12), 1355-1363.

Lyon, T. P., & Maxwell, J. W. (2008). Corporate social responsibility and the environment: A theoretical perspective. Review of environmental economics and policy, 2(2), 240-260.

(43)

42

Mackey, A., Mackey, T. B., & Barney, J. B. (2007). Corporate social responsibility and firm performance: Investor preferences and corporate strategies. Academy of management review, 32(3), 817-835.

Martín-de-Castro, G., Delgado-Verde, M., López-Sáez, P., & Navas-López, J. E. (2011). Towards ‘an

intellectual capital-based view of the firm’: origins and nature. Journal of business ethics, 98(4), 649-662.

Martinez-Conesa, I., Soto-Acosta, P., & Palacios-Manzano, M. (2017). Corporate social responsibility and its effect on innovation and firm performance: An empirical research in SMEs. Journal of cleaner

production, 142, 2374-2383.

McGuire, J. B., Sundgren, A., & Schneeweis, T. (1988). Corporate social responsibility and firm financial performance. Academy of management Journal, 31(4), 854-872.

Mishra, S., & Suar, D. (2010). Does corporate social responsibility influence firm performance of Indian companies?. Journal of business ethics, 95(4), 571-601.

Montiel, I. (2008). Corporate social responsibility and corporate sustainability: Separate pasts, common futures. Organization & Environment, 21(3), 245-269.

Kramer, M. R., & Porter, M. (2011). Creating shared value. FSG.

Porter, M. E., & Kramer, M. R. (2019). Creating shared value. In Managing sustainable business (pp. 323-346). Springer, Dordrecht.

Ready, D. A., & Truelove, E. (2011). The power of collective ambition. In Harvard Business

Review, 94-102

Rexhepi, G., Kurtishi, S., & Bexheti, G. (2013). Corporate social responsibility (CSR) and innovation the drivers of business growth. Procedia-Social and Behavioral Sciences, 75(3), 532-541.

Rosenberg, N. (2010). Why do firms do basic research (with their own money)?. In Studies On Science

And The Innovation Process: Selected Works of Nathan Rosenberg (pp. 225-234).

Rosenbusch, N., Brinckmann, J., & Bausch, A. (2011). Is innovation always beneficial? A meta-analysis of the relationship between innovation and performance in SMEs. Journal of business Venturing,

26(4), 441-457.

Rothaermel, F. T., & Hess, A. M. (2007). Building dynamic capabilities: Innovation driven by individual-, firm-, and network-level effects. Organization science, 18(6), 898-921.

(44)

43

Sezen, B., & Cankaya, S. Y. (2013). Effects of green manufacturing and eco-innovation on sustainability performance. Procedia-Social and Behavioral Sciences, 99, 154-163.

Sharma, A. (2016). Key drivers endorsing CSR: a transition from economic to holistic approach. Asian

Journal of Business Ethics, 5(1-2), 165-184.

Sharma, S., & Henriques, I. (2005). Stakeholder influences on sustainability practices in the Canadian forest products industry. Strategic management journal, 26(2), 159-180.

Sharma, S., & Vredenburg, H. (1998). Proactive corporate environmental strategy and the development of competitively valuable organizational capabilities. Strategic management journal, 19(8), 729-753. Sierzchula, W., Bakker, S., Maat, K., & Van Wee, B. (2012). Technological diversity of emerging

eco-innovations: a case study of the automobile industry. Journal of Cleaner Production, 37, 211-220. Simmons, J. (2004). Managing in the post‐managerialist era. Management Decision.

Slater, S. F., & Narver, J. C. (1995). Market orientation and the learning organization. Journal of

marketing, 59(3), 63-74.

Szczuka, M. (2015). Social dimension of sustainability in CSR standards. Procedia Manufacturing, 3, 4800-4807.

Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic

management journal, 18(7), 509-533.

Torugsa, N. A., O’Donohue, W., & Hecker, R. (2012). Capabilities, proactive CSR and financial performance in SMEs: Empirical evidence from an Australian manufacturing industry sector. Journal of business ethics, 109(4), 483-500.

Triguero, A., Moreno-Mondéjar, L., & Davia, M. A. (2013). Drivers of different types of eco-innovation in European SMEs. Ecological economics, 92, 25-33.

(45)

44

VanderWeele, T. J. (2013). Policy-relevant proportions for direct effects. Epidemiology (Cambridge,

Mass.), 24(1), 175.

Wagner, M. (2010). Corporate social performance and innovation with high social benefits: A quantitative analysis. Journal of Business Ethics, 94(4), 581-594.

Wartick, S. L., & Cochran, P. L. (1985). The evaluation of the corporate social performance model. Academy of Management Review, 10(A), 758-769

Williamson, D., Lynch-Wood, G., & Ramsay, J. (2006). Drivers of environmental behaviour in manufacturing SMEs and the implications for CSR. Journal of business ethics, 67(3), 317-330.

Wilson, L. (1975). What One Company Is Doing about Today's Demands on Business. In G. A. Steiner (Ed.), Changing business-society interrelationships. Los Angeles: Graduate School of Management, UC

Xie, X., Huo, J., Qi, G., & Zhu, K. X. (2015). Green process innovation and financial performance in emerging economies: Moderating effects of absorptive capacity and green subsidies. IEEE

Transactions on Engineering Management, 63(1), 101-112.

Zawislak, P. A., Cherubini Alves, A., Tello-Gamarra, J., Barbieux, D., & Reichert, F. M. (2012). Innovation capability: from technology development to transaction capability. Journal of

technology management & innovation, 7(2), 14-27.

Corporate social responsibility as environmental innovation fuel: Do innovation ambition and innovation capability really matter?