The effect of Environmental Corporate Social Responsibility on industrial SMEs’ innovation

ForcadellF.J

Abstract

   This article analyses how Environmental Corporate So­cial Responsibility (ECSR) strategies may help to enhance innovation among small and medium-size enterprises (SMEs). We test our hypotheses over a large sample of 2,620 industrial SMEs in Spain. We find empirical sup­port for ECSR driving innovation as measured by the innovative effort or R&D and its outcomes in terms of product and process innovation. In addition, we distin­guish the effect of ESCR on innovation among innova­tive and non-innovativeSMEs. The effect is more intense for the later, suggesting an important role of ECSR on firms’ transformation. Our study contributes to the lit­erature by analyzing the effect of ECSR in promoting in­novation, as opposed to most studies that examine only on green-innovation. Besides, we examine the neglected research area of SMEs environmental strategies. Our findings on the instrumental value of ECSR related to innovation strengthen the business case of pro-environ­mental strategies, specifically for SMEs.