The Effect of Corporate Social Responsibility on the Technology Innovation of High-Growth Business Organizations

Abstract

The implementation of innovation-driven strategy requires business organizations to actively conduct technological innovation activities. Corporate social responsibility (CSR) performance is an important factor to promote technological innovation, and venture capital (VC) as a matching capital with technological innovation also affects technological innovation. Using Chinese listed companies on the Growth Enterprise Market (GEM) during the 2014–2018 period as a sample, we study the role of corporate social responsibility performance in technological innovation and the impact of venture capital on the relationship between the two. We find that social responsibility performance can effectively promote innovation, which is promoted significantly by the shareholder responsibility and employee responsibility dimensions of social responsibility. We also find that venture capital inhibits the promotion of social responsibility to technological innovation. This work will guide VC institutions to pay more attention to business organizations social innovation projects.

1. Introduction

The 19th CPC National Congress report pointed out that innovation is the driving force for the long-term development of the world economy and the strategic support for constructing a modern economic system. As the backbone of technological innovation in China, the full release of innovation vitality of enterprises is an important guarantee for the acquisition of core competitiveness [1], and an essential condition for the in-depth implementation of innovation-driven development strategy by the country. How to effectively promote enterprise innovation has aroused the common concern of the academic community and the industry.

Existing studies focus on financing constraints [2,3], intellectual property rights protection [4], manager traits [5,6,7], corporate governance [8], tolerance of failure [7,9], incentives for core R&D personnel [10], macro policies [11], institutional environment [12] and regional differences [13,14] and other multiple perspectives, made an in-depth study on the problem of enterprise technological innovation. However, as the cornerstone of an enterprise’s long-term development and the essence of an enterprise’s technological innovation, corporate social responsibility (CSR) is often ignored.

More and more enterprises have realized the strategic significance of fulfilling social responsibility [15,16,17], Especially large listed companies [18]. Taking CSR is not only a kind of “responsibility and obligation”, but also an essential path for enterprises to establish and adjust the relationship between enterprises and various stakeholders to optimize information channels, deepen mutual trust, promote friendly cooperation and enhance enterprise creativity [15,17,18,19,20].

At present, more and more enterprises consider CSR attributes (such as the production of low-carbon energy-saving products and sustainable development) in the process of technological innovation in order to enhance their competitiveness [21,22], catering to changing market needs [23]. Therefore, it is of great practical significance to study the internal logical relationship and mechanism between CSR and innovation capability to realize the high integration of responsibility and innovation.

The relationship between CSR and technological innovation have aroused wide attention in academic circles. Many scholars have actively explored the relationship between CSR and technological innovation from different perspectives (resource-based view, social network theory, and stakeholder theory). On the one hand, some scholars believe that when enterprises fulfill their social responsibilities for the community and customers, they can affect organizational performance and promote innovation [24], which reflects that the fulfillment of social responsibilities can meet the external expectations of stakeholders and play a positive role in promoting product advantages and strategic innovation [22,25,26,27,28]. On the other hand, some scholars have put forward the idea that the fulfillment of corporate social responsibility may crowd out the funds of technological innovation, resulting in unnecessary and ineffective opportunity costs and making it more challenging to obtain innovation resource feedback [28,29,30]. It can be seen that there are still some disputes about how social responsibility affects corporate innovation. This paper hopes to further verify and explain.

The fulfillment of social responsibility and the realization of firm innovation are inseparable from resource support and financing channels, and Venture Capital (VC) has become the preferred financing channel for more and more enterprises at present [31,32]. Therefore, it is worth further study whether CSR on innovation will be affected after VC participation. Many scholars believe that VC can provide financial financing and professional guidance by participating in corporate governance activities, empower enterprises with information advantages and enhance enterprises’ creativity and insight [33,34,35,36,37]. However, some scholars have proposed that VC may produce the grasping effect that will weaken the innovation ability of the firm, which is easy to induce short-sighted behavior, agency conflict, and moral hazard [38,39,40]. Therefore, what kind of impact VC will bring to CSR and technological innovation is in urgent need of research.

Compared to existing literature, the marginal contribution of this paper is as follows. First, previous articles on enterprise innovation primarily focus on A-share mainboard companies as the research object, focusing on macro and micro factors affecting enterprise innovation and organizational performance. Focusing on GEM-listed companies, this paper investigates the influence mechanism of CSR fulfillment on technological innovation under the strategic background of “responsibility-driven innovation and innovation-led development”. It enriches the theoretical research on technological innovation of start-up enterprises by combining it with the actual fulfillment of social responsibility of domestic start-ups. Secondly, existing studies have focused on the relationship between CSR and technological innovation, but the conclusion has not yet been reached. From the liability of shareholders, employees, suppliers, and customers and consumer rights responsibility, environmental responsibility and social responsibility of a comprehensive corporate social responsibility in five dimensions, influence on technology innovation, a more comprehensive and in-depth analysis of CSR for the impact of technology innovation mechanism, has carried on the beneficial supplement of past research. Finally, the existing literature primarily focuses on the impact of VC on corporate innovation or the impact of VC on CSR. However, it seldom pays attention to the moderating effect of VC on CSR and technological innovation. VC, as a vital financing channel, entrepreneurial companies provide a large amount of financial support and professional guidance, affects the strategic decisions of the enterprise investment. Therefore, this paper introduces VC as an external adjustment variable. After intervention VC enterprises, study on the social responsibility of the enterprise investment strategy and innovative decision-making influence. It expands the theoretical research on the influence mechanism of VC.

2. Theoretical Basis and Hypothesis Proposed

2.1. CSR and Firm Innovation

The concept of innovation was first proposed by Schumpeter, an Austrian-American economist, in 1912 [41]. In his book Theory of Economic Development, Schumpeter believed that innovation was the root of modern economic growth. The technological innovation process of enterprises mainly includes five situations [42]:

• The introduction of a new product;
• The adoption of a new production process;
• The opening up of a new market;
• The obtaining of a new source of supply of raw material or semi-finished product;
• The realization of a new model of enterprise production organization.

Technological innovation is one of the critical sources of the core competitiveness of enterprises. Technological innovation determines the survival, comparative advantage, market value, and investment return of enterprises [43,44]. However, technological innovation depends on a large amount of capital and human input, and external resources are crucial for enterprise technological innovation at this time [44].

Since Sheldon put forward in 1924 the concept of social responsibility, there has been no interruption in this field [45]. Carroll later divided CSR into economic responsibility, legal responsibility, ethical responsibility, and public welfare responsibility for the first time [46]. His hierarchical research on CSR made the research on CSR more diversified.

CSR is the commitment of a company to sustainable development. CSR requires the company to understand and pay attention to the needs of stakeholders, including shareholders, employees, government, communities, consumers, and other relevant interest groups [47,48] to achieve the harmonious coexistence of all stakeholders [49].

Performing social responsibility can bring various heterogeneous resources and information needed by enterprises for innovation [44]. Stakeholder theory [50] believes that the development of any company cannot be separated from the input or participation of stakeholders, so enterprises must establish a good relationship with stakeholders in order to achieve long-term development [51]. When an enterprise performs its social responsibility, it will consider all stakeholders’ needs except shareholders, including establishing good relations with suppliers and producing goods that meet consumer needs [52]. Furthermore, it establishes a closer relationship and trust with external stakeholders [53]. When enterprises undertake social responsibilities, they establish deep trust with external stakeholders, bringing knowledge resources and various cooperation opportunities for enterprises [54,55]. When making technological innovations, enterprises are most concerned about whether the market will accept the new products that have been updated and reformed or innovated. Therefore, enterprises need to obtain information about market demand through consumers, and only the innovation accepted by the market is meaningful. For example, the “Thor” game notebook launched by Haier was developed through communication with “Thunder fans” (consumers) to understand their needs, and finally successfully launched into the market. In addition, enterprises need to rely on the support of employees in carrying out innovation activities, including technical guidance from technical personnel and active cooperation from production personnel. Enterprises may need to rely on suppliers for joint development. For example, Foton began implementing product innovation in supplier invention in new product development (SINPD). It reduces the design cost, shortens the development cycle, and speeds up the development speed of new products.

According to the resource-dependent theory, enterprises need to obtain resources in the external environment to maintain their survival. In the era of the knowledge economy, internal and external knowledge resources are very important for the development of enterprises. Hewitt-Dundas pointed out that enterprise innovation policies should focus on minimizing development risks and increasing the acquisition of professional knowledge [56]. Enterprise innovation needs to integrate internal and external creative ideas and innovative information and transform them into identifiable results with specific technical means. The realization of this process is closely related to the accumulation of enterprises’ knowledge and resources that can be obtained from outside. By fulfilling CSR, enterprises meet stakeholder expectations, which is conducive to establishing a good relationship between enterprises and stakeholders, and help enterprises obtain various resources and information needed for innovation [57]. Meanwhile, based on knowledge-based theory, Luo and Du concluded that companies with more social responsibility activities show higher innovation ability and launch more new products. The competitiveness of enterprises considers performance, quality, productivity, and image and pays more attention to innovation processes, products, and services [58]. Consequently, we formulate the following hypothesis:

Hypothesis 1 (H1).

There is a positive relationship between CSR and technological innovation.

2.2. CSR, VC and Firm Innovation

VC participates in corporate governance activities in the form of financial investment and provides value-added services (financial financing and professional guidance) to enterprises [33,34,35,37,59,60]. The ultimate goal is to exit through stock market listing, merger, and acquisition or other equity transfer methods after the enterprise value increases and to earn excess investment returns [38,40,61]. It can be seen that in addition to improving the operating performance of start-ups through value-added services, VC also takes advantage of start-ups [62]. It is reflected in earnings management level, cash dividend distribution, and R&D manipulation behavior of invested enterprises after IPO [63,64].

On the one hand, VC institutions have short-term speculative arbitrage motives. VC generally invests in high-risk and high-growth enterprises, focusing on whether the project can get a higher return on investment in a relatively short period, which inevitably leads to the short-sightedness and speculative behavior of VC [65,66]. At the same time, VC focuses too much on short-term excess returns and a good “market reputation”. It may ignore the demands of stakeholders, and believe that the fulfillment of social responsibility by enterprises is a kind of burden behavior of value destruction, which not only requires enterprises to bear direct costs but also may lose opportunity costs, leading to enterprises in a competitive disadvantage and thus bringing investment risks to VC institutions [67]. It can be seen that the short-term speculative behavior of VC runs counter to the long-term value investment concept of social responsibility. Such behavior leads to VC institutions often finding it difficult to have the willingness and requirements to support enterprises to fulfill their social responsibility.

On the other hand, VC institutions can intervene in the strategic decision-making of enterprises. Due to start-ups’ high intangible asset characteristics, it is difficult for them to obtain the funds needed for development through other channels [18,68]. The lack of alternative funding at a make-or-break moment is bound to aggravate the dependence of start-ups on VC funds. In order to obtain the support of VC funds in stages, start-ups may give up management autonomy and projects with uncertain returns in exchange for continuous support from VC institutions [18,40,69]. As a form of equity financing, VC institutions not only provide financial support for enterprises but also send directors to the board of directors of start-up enterprises to participate in the formulation of major strategies of the company and supervise the daily work of the company’s management team [69,70]. When supervising enterprises to make strategic decisions, institutional investors usually have little motivation to promote those management decisions with non-economic benefits, or even some constraints, to restrain the external effects brought by non-economic behaviors [40,71,72,73].

As a result, this paper believes that VC is short-sighted and motivated by speculation. It also seeks to intervene in the decision-making of enterprises for its benefit. These properties of VC institutions will affect the fulfillment of CSR while inhibiting the innovation of enterprises.

Based on the above analysis, we formulate the following hypothesis:

Hypothesis 2 (H2).

VC weakens the role of social responsibility fulfillment and firm innovation promotion.

2.3. CSR, VC Ratio and Firm Innovation

The shareholding ratio of VC institutions in small and medium-sized enterprises (SMEs) represents the degree to which VC institutions can participate in business decision-making. The level of shareholding ratio not only affects the amount of resources invested by VC institutions in the business organization, but also determines the willingness and degree of participation of VC institutions in the operation and management.

According to the theory of management discretion, the degree of management discretion is jointly determined by individual, organizational, and environmental factors, and powerful stakeholders may affect the discretion of management. Therefore, when the shareholding ratio of VC is relatively high, as a powerful stakeholder, it is very likely to influence the innovation investment decision of management in alignment with its own objectives. VC institutions invest in business organizations, whose primary purpose is to obtain a high return on investment within a short period of time, which is likely to stimulate the short-term innovation investment of business organizations. However, the innovation investment strategy under CSR is more related to products and services with social purposes, which often relate to the long-term development. Therefore, there exists an inherent conflict with the short-term investment objective of VC institutions. VC institutions may interfere with the discretion of the management, so that the long-term innovation investment plan driven by CSR is shelved, and then the long-term innovation investment behavior guided by CSR is inhibited.

Based on the above analysis, we formulate the following hypothesis:

Hypothesis 3 (H3).

The higher the shareholding ratio of VC, the weaker the promoting effect of social responsibility fulfillment on business organization innovation.

Our framework of this paper is shown in Figure 1.

3. Research Design

3.1. Data

We select companies listed on the GEM of the Shenzhen Stock Exchange during 2014–2018. The information of CSR score is obtained from HeXun, which constructs the CSR index according to five dimensions: (1) shareholder responsibility, (2) employee responsibility, (3) supplier and customer responsibility and consumer rights responsibility, (4) environmental responsibility, and (5) social responsibility. Financial data are from Wind and CSMAR databases. The initial sample consisted of 3010 annual observations of companies. We excluded data from 38 publicly traded companies and 64 companies with missing financial data. After screening, 2908 observations were obtained. To eliminate the effect of extreme observations, we winsorized the data at the 1% level.

Whether the listed company has a risk investment background, we follow Wu [74] and use the following approach: (1) if the name of the top ten shareholders of listed companies in contain “risk investment”, “venture capital”, “entrepreneurial venture capital”, “innovative venture investment”, “venture capital investment”, “venture investment consulting” is defined as a background in VC of listed companies; (2) for the former top ten shareholders name contains “high-tech investment”, “high-tech investment”, “innovation investment”, “science and technology investment”, “technical transformation investment” and other words of the company need to confirm again: first of all, by looking at the 2017 China venture risk investment development report included in the list of risk investment company, if the shareholder’s name was collected, is defined as a risk investment background; Secondly, conduct an online search of the main business of the shareholder. If it contains “venture capital” and “venture capital”, then the listed company of the top ten shareholders also has the background of VC. According to the above definition, from 2014 to 2018, the listed companies with VC background account for 15.30%, which is relatively consistent with the data of Wu [74].

3.2. Variables

3.2.1. Firm Innovation

According to the prior literature [60], we use the proportion of R&D expenditure in total assets as an indicator of technological innovation.

3.2.2. CSR

Following prior research [22], We adopt the score rated by HeXun, which if one of the most popular third-party rating agencies in China, to measure the level of CSR implementation of listed companies [60]. HeXun provides a comprehensive CSR score as well as five dimensional scores for each firm based on its shareholder responsibility, employee responsibility, supplier, customer and consumer responsibility, environmental responsibility and social responsibility. The higher the score, the better the CSR performance. So the CSR score of a listed company provided by HeXun can comprehensively reflect its overall situation of CSR fulfillment.

3.2.3. VC

As for how to judge whether a listed company has a risk investment background, we follow Wu [74] and use the following approach: (1) if the name of the top ten shareholders of the listed company contains “risk investment”, “venture capital”, “entrepreneurial venture capital”, “innovative venture investment”, “venture capital investment”, “venture investment consulting”, this company is defined one which has a VC background; (2) if the name of the top ten shareholders of the listed company does not contain those words as mentioned above, but contains “high-tech investment”, “innovation investment”, “science and technology investment”, “technical transformation investment”, this company is also defined one which has a VC background if it meet one of the two requirements: firstly, one of its top ten shareholders is included by China venture risk investment development report; Secondly, one of its top ten shareholders’ main business contains “risk investment” and “venture capital”. According to the above definition, from 2014 to 2018, the listed companies with VC background account for 15.30%, which is relatively consistent with the data of Wu [74].

3.2.4. Control Variables

Based on the prior literature [75], we include control variables such as firm size, cash flow, firm age, scale, and growth performance. See

Table 1. Variables.

Variables	Code	Explanation
Explained variable	RD	Current R&D investment of the enterprise
	RDr	Current R&D investment/current total assets
Explanatory variables	CSR	Comprehensive score of HeXun corporate social responsibility score
Moderate variable	VC	Whether there is venture capital. If the top 10 shareholders have venture capital, it is 1; otherwise, it is 0
	VCshare	Sum of venture capital holdings
Control variables	Size	The logarithm of a company’s total assets
	Lev	Total liabilities/total assets
	CF	Net cash flow from operating activities
	Age	Number of years since the establishment of the company
	Salary	Total payroll/total number of employees
	Growth	(Amount of operating income for the current year—Amount of operating income for the same period of last year)/(Amount of operating income for the same period of last year)
	Duality	If the chairman and the general manager are the same person, it is 1. Otherwise, it is 0
	Herfi10	The sum of the square of the shareholding ratio of the top ten major shareholders of the company
	Broasize	Number of Directors
	Indcd	Industry dummy variable
	Year	Year dummy variable

for the specific definitions of each variable.

3.3. Model Construction

In order to test the impact of GEM listed companies’ CSR on R&D investment and the moderating effect of VC, this paper constructs the following multiple regression model to test our hypotheses:

$$RD{r}_t=a_0+a_{1}CS{R}_t+a_3\sum Control{s}_t+{\epsilon }_t$$

(1)

$$RD{r}_t=b_0+b_{1}CS{R}_t+b_{2}V{C}_t+b_{3}CS{R}_t\times V{C}_t+b_4\sum Control{s}_t+{\epsilon }_t$$

(2)

$$RD{r}_t=c_0+c_{1}CS{R}_t+c_{2}VCshar{e}_t+c_{3}CS{R}_t\times VCshar{e}_t+c_4\sum control{s}_t+{\epsilon }_t$$

(3)

where Controls represent each control variable. Model (1) is used to test hypothesis 1; The variable VC was added to model (2) to test hypothesis 2; Model (3) is used to test Hypothesis 3 and to test the influence of VC shareholding ratio on the relationship between CSR and technological innovation.

4. Empirical Results and Analysis

4.1. Descriptive Statistics

Summary statistics of the full sample are reported in

Table 2. Summary statistics of the full sample.

Variables	Sample	Mean Value	Standard Deviation	Minimum	Median	Maximum
RD	2908	0.648	0.722	0.0443	0.406	4.420
RDr	2908	2.931	2.107	0.196	2.371	12.16
CSR	2908	21.45	10.11	−3.530	21.84	66.43
VC	2908	0.241	0.428	0.000	0.000	1
VCshare	2908	1.578	4.112	0.000	0.000	24.02
Size	2908	21.32	0.832	19.71	21.24	23.64
Lev	2908	0.316	0.168	0.0467	0.294	0.755
CF	2908	0.827	2.103	−5.889	0.509	10.48
Age	2908	15.18	4.596	6.000	15.00	27.00
Salary	2908	11.66	5.232	4.522	10.26	32.93
Growth	2908	0.265	0.406	−0.452	0.190	2.135
Duality	2908	0.435	0.496	0.000	0.000	1.000
Herfi10	2908	0.132	0.0777	0.0223	0.113	0.379
Broasize	2908	7.927	1.399	5.000	8.000	11.00

. The average value of the company’s R&D investment in total assets is approximately 3%, and there is a high degree of variability between R&D investment of various companies, which is basically consistent with prior studies [50]. There are great differences in CSR scores. The mean value of VC background is 0.241, indicating that the proportion of listed companies with a VC background is relatively small for the whole sample. Among the control variables, the average size of the business organization is 21.32, the average cash flow of business activities is 0.827 million yuan, the average growth of the business organization is 26.5%, and the average shareholding ratio of the top ten shareholders is 13.2%, indicating that the business organization on average has high growth, abundant cash flow, and low ownership concentration.

4.2. Correlation Analysis

Table 3. Correlation Coefficients for The Variable.

	RDr	CSR	VC	VCshare	Size	Lev	CF	Age	Salary	Growth	Duality	Herfi10	Broadsize
RDr	1	0.058 ***	0.070 ***	0.101 ***	−0.232 ***	−0.154 ***	0.055 ***	−0.025	0.259 ***	−0.056 ***	0.080 ***	−0.055 ***	−0.030
CSR		1	0.013	0.019	0.013	−0.220 ***	0.184 ***	−0.021	0.046 **	0.145 ***	0.014	0.075 ***	0.073 ***
VC			1	0.682 ***	−0.083 ***	0.042 **	−0.059 ***	0.021	−0.014	0.013	0.049 ***	0.011	0.056 ***
VCshare				1	−0.058 ***	0.037 **	−0.025	−0.024	−0.021	−0.007	0.022	−0.001	0.081 ***
Size					1	0.435 ***	0.284 ***	0.046 **	0.110 ***	0.216 ***	−0.124 ***	−0.194 ***	0.123 ***
Lev						1	−0.074 ***	0.019	−0.003	0.163 ***	−0.030	−0.056 ***	0.054 ***
CF							1	−0.003	0.050 ***	0.030	0.001	0.004	0.033 **
Age								1	0.046 **	−0.030	−0.051 ***	−0.024	0.090 ***
Salary									1	0	−0.004	−0.120 ***	−0.066 ***
Growth										1	−0.021	−0.022	0.053 ***
Duality											1	0.122 ***	−0.081 ***
Herfi10												1	−0.114 ***
Broadsize													1

Note: ***, ** and indicate significant associations (bilateral) at 1%, 5% and levels, respectively.

presents the correlation coefficients for the variables, indicating that there is a significant positive correlation between CSR and the intensity of firm R&D investment. VC background (VC) and VC shareholding proportion (VCShare) also have a significant positive correlation with the intensity of R&D investment (RDr). The absolute values of the correlation coefficients between the other control variables are not more than 0.6, indicating that there is no serious multicollinearity problem between the variables.

4.3. Regression Analysis

In

Table 4. Corporate Social Responsibility and Enterprise Innovation.

	(1)	(2)	(3)	(4)	(5)	(6)
	RDr	RDr	RDr	RDr	RDr	RDr
CSR	0.008 **
	(1.97)
Sto		0.041 ***
		(6.04)
Emp			0.070 ***
			(3.33)
Sup				−0.023
				(−1.59)
Env					−0.018
					(−1.25)
Soc						−0.054 ***
						(−4.96)
Size	−0.442 ***	−0.659 ***	−0.671 ***	−0.645 ***	−0.648 ***	−0.648 ***
	(−13.09)	(−12.62)	(−12.73)	(−12.22)	(−12.28)	(−12.38)
Lev	0.161	0.530 **	0.117	0.061	0.062	−0.042
	(1.10)	(2.09)	(0.48)	(0.25)	(0.25)	(−0.17)
CF	0.000 ***	0.000 ***	0.000 ***	0.000 ***	0.000 ***	0.000 ***
	(4.90)	(3.74)	(4.49)	(4.67)	(4.63)	(4.48)
Age	−0.012 **	−0.024 ***	−0.023 ***	−0.024 ***	−0.024 ***	−0.022 ***
	(−2.15)	(−2.89)	(−2.80)	(−2.88)	(−2.89)	(−2.67)
Salary	0.000 ***	0.000 ***	0.000 ***	0.000 ***	0.000 ***	0.000 ***
	(10.43)	(9.56)	(8.53)	(9.57)	(9.55)	(9.48)
Growth	0.329 ***	−0.078	−0.029	−0.020	−0.020	0.003
	(3.35)	(−1.28)	(−0.47)	(−0.32)	(−0.33)	(0.05)
Duality	0.088 ***	0.256 ***	0.257 ***	0.262 ***	0.260 ***	0.259 ***
	(3.35)	(3.46)	(3.46)	(3.51)	(3.49)	(3.50)
Herfi10	−0.226	−1.712 ***	−1.078 **	−1.201 **	−1.192 **	−1.130 **
	(−0.69)	(−3.54)	(−2.26)	(−2.51)	(−2.49)	(−2.38)
Broadsize	0.026 *	0.048 *	0.061 **	0.064 **	0.064 **	0.065 **
	(1.88)	(1.83)	(2.36)	(2.45)	(2.44)	(2.52)
_cons	10.250 ***	14.258 ***	14.701 ***	14.235 ***	14.293 ***	14.457 ***
	(13.90)	(12.49)	(12.79)	(12.33)	(12.39)	(12.64)
Indcd	Yes	Yes	Yes	Yes	Yes	Yes
Year	Yes	Yes	Yes	Yes	Yes	Yes
N	2908	2908	2908	2908	2908	2908
Adjusted R2	0.297	0.271	0.264	0.262	0.262	0.268

Note: ***, ** and * indicate significant at 1%, 5% and 10% levels, respectively. Sto is the score of shareholder liability dimension of CSR provided by HeXun; Emp is the score of employee responsibility dimension of CSR provided by HeXun; Sup is the score of suppliers, customers and consumers dimension of CSR provided by HeXun; Env is the score of environmental responsibility dimension of CSR provided by HeXun; Soc is the score of social responsibility dimension of CSR provided by HeXun.

Model (1), the coefficient of CSR and R&D investment intensity (RDr) is 0.008, and it is statistically significant at the 95% confidence level. Consistent with the previous studies, the empirical result indicates that the better the CSR performance, the greater the intensity of R&D investment and the higher the degree of innovation [18,44,51,52,53,54,55]. This result supports Hypothesis 1.

Considering that different dimensions of CSR may have different influences on firm innovation, on the basis of studying the impact of the overall situation of CSR on business organization innovation, CSR is divided into five different dimensions to test the impact of different dimensions on business organization innovation, respectively: STO: shareholder liability score; EMP: employee responsibility score; SOC: Social responsibility score; SUP: Supplier, Customer and Consumer Responsibility Score; ENV: Environmental Responsibility Score.

As shown in columns (2)–(6) of Table 4, according to the scores of different dimensions of CSR provided by HeXun, the influences of the scores of five levels, including shareholder responsibility, employee responsibility, suppliers, customers and consumers, environmental responsibility and social responsibility, on corporate R&D investment are tested respectively. Among them, the scores of shareholder responsibility and employee responsibility are significantly positive for the business organization innovation coefficient, indicating that the better the CSR performance of these dimensions, the greater the firm innovation intensity. On the whole, when business organizations pay attention to their social responsibilities and take action, innovation can be promoted to some degree. This shows that the business organization takes more consideration in the operation and management rights and interests of stakeholders, the differentiated products and more realistic attentively service presented to customers, a good relationship with suppliers, seeking more benefits for the employees, to establish the brand influence and prestige value, bring about innovation related resources, and promote innovation. Specific to different dimensions of social responsibility, the better the performance of social responsibility of shareholders and employees, the greater the effect on technological innovation. As the main investors of the business organization, the shareholders have a high degree of participation in the operation and management of the business organization. When the business organization pays attention to and meets the demands of the shareholders, the shareholders are more willing to help obtain innovation resources. In addition, when business organizations pay more attention to the welfare of employees, they can timely mobilize the enthusiasm of employees to participate in the work and make greater contributions to firm innovation.

In Column (2) of

Table 5. Regulatory effect of venture capital.

	(1)	(2)	(2)
	RDr	RDr	RDr
CSR	0.008 **	0.012 ***	0.012 **
	(1.97)	(2.59)	(2.42)
CSR×VC		−0.019 **
		(−2.19)
VC		0.108 ***
		(3.55)
CSR × VCshare			−0.005 **
			(−2.20)
VCshare			0.068 ***
			(5.30)
Size	−0.442 ***	−0.437 ***	−0.559 ***
	(−13.09)	(−12.87)	(−13.68)
Lev	0.161	0.117	0.121
	(1.10)	(0.80)	(0.66)
CF	0.000 ***	0.000 ***	0.000 ***
	(4.90)	(5.23)	(6.58)
Age	−0.012 **	−0.012 **	−0.016 **
	(−2.15)	(−2.20)	(−2.55)
Salary	0.000 ***	0.000 ***	0.000 ***
	(10.43)	(10.36)	(12.97)
Growth	0.329 ***	0.322 ***	0.251 ***
	(3.35)	(3.29)	(2.69)
Duality	0.088 ***	0.085 ***	0.156 ***
	(3.35)	(3.25)	(3.42)
Herfi10	−0.226	−0.239	−0.618
	(−0.69)	(−0.73)	(−1.62)
Broadsize	0.026 *	0.023	0.026
	(1.88)	(1.64)	(1.26)
_cons	10.250 ***	10.099 ***	12.235 ***
	(13.90)	(13.70)	(13.77)
Indcd	Yes	Yes	Yes
Year	Yes	Yes	Yes
N	2908	2908	2908
Adjusted R2	0.297	0.301	0.341

Note: ***, ** and * indicate significant at 1%, 5% and 10% levels, respectively.

, the interaction term (CSR×VC) formed by CSR and VC has a coefficient of −0.019 with the intensity of corporate R&D investment, which is statistically significant at the confidence level of 95%, indicating that the VC background weakens the positive correlation between CSR and R&D investment. After VC enters the firm, it inhibits the promoting effect of CSR on the firm’s R&D investment and thus weakens the impact of CSR on the firm’s innovation. Thus, we find evidence in support of H2. In fact, some scholars have empirically confirmed that VC not only bring value-added services, but also takes advantage of start-ups [40,62]. Therefore, it is not difficult to understand that VC plays a restraining role between CSR and enterprise innovation.

In Table 5 (3) column, CSR (CSR) and VC holdings (VCshare) formed by the interaction of VCshare (CSR) and corporate R&D intensity coefficient is −0.005, and significant at the 95% confidence level, suggests that the greater the risk investment shareholding, CSR to fulfill its role in promoting business organization innovation will abate, so suppose H3.

Binary variables for vectors of years and industries are included in all regressions. According to the regression results of control variables, firm size is negatively correlated with R&D investment. Companies with higher cash flow and higher growth rate (growth rate) have more R&D investment, while older companies (age) have less R&D investment. In addition, the average salary of employees is positively correlated with R&D investment, while the duality of general managers as chairmen of the board of directors are positively correlated with R&D investment.

5. Robustness Test

5.1. Endogeneity Problem

This paper may have endogeneity problems due to reverse causality and omission of variables. We try to alleviate the possible endogeneity problems through two methods. First, we rerun the basic regression of model (1), where the independent variable (CSR) is lagged by one period, in order to exclude the distraction of reverse causality. And

Table 6. Corporate social responsibility lags behind a period of results.

	(1)	(2)
	RDr	RDr
CSRt−1	0.018 ***	0.023 ***
	(3.66)	(4.26)
CSRt−1 × VC		−0.026 **
		(−2.41)
VC		0.084 **
		(2.29)
Size	−0.408 ***	−0.413 ***
	(−10.55)	(−10.63)
Lev	0.165	0.149
	(1.00)	(0.89)
CF	0.000 ***	0.000 ***
	(4.30)	(4.61)
Age	−0.014 **	−0.014 **
	(−2.14)	(−2.17)
Salary	0.000 ***	0.000 ***
	(8.66)	(8.65)
Growth	0.246 **	0.235 **
	(2.27)	(2.18)
Duality	0.105 ***	0.106 ***
	(3.44)	(3.49)
Herfi10	−0.308	−0.339
	(−0.81)	(−0.89)
Broadsize	0.022	0.020
	(1.40)	(1.27)
_cons	9.450 ***	9.478 ***
	(11.11)	(11.14)
Indcd	Yes	Yes
Year	Yes	Yes
N	2169	2169
Adjusted R2	0.301	0.304

Note: T value in parentheses. ** p < 0.05. *** p < 0.01.

shows the results of the regression. Second, the instrumental variable method is used to further solve the endogeneity problem that may exist in VC. Referring to the research of Liu et al. [76], we select the distribution density of VC institutions in the province where the listed company is located and whether it is listed after 2010 as two instrumental variables of VC. The reasons include: On the one hand, VC involvement in listed companies usually needs to consider the cost and risk of investment and tends to have a preference for local firms, so the density of VC institutions of a province tends to affect whether the listed companies have a VC background, but it does not directly affect the company’s social responsibility fulfillment and technology innovation level. And we define IV1 as a province’s total number of risk investment institutions divided by the total number of all listed companies in that province. On the other hand, national policy is often exogenous. In 2010, China promulgated a number of policies and regulations related to VC, which standardized and promoted the development and growth of VC institutions in many aspects. The introduction of these policies has also greatly affected the situation of VC involvement in business organizations. Therefore, whether the listed company is listed after 2010 is chosen as another instrumental variable. We coded IV2 as 1 When the company is listed after 31 December 2010, otherwise it is coded as 0. And we rerun the regression of model (2) separately using IV1 and IV2 to replace the original VC.

Table 7. Regression results of instrumental variables.

	Instrumental Variable	Instrumental Variable
	RDr	RDr
CSR	0.141 **	0.040 **
	(2.50)	(2.39)
CSR_VC	−0.563 **	−0.156 **
	(−2.20)	(−2.32)
VC	0.172	0.844 ***
	(0.20)	(3.03)
Size	−0.601 ***	−0.404 ***
	(−8.10)	(−7.35)
Lev	0.497	−0.171
	(1.25)	(−0.74)
CF	0.000 **	0.000 ***
	(2.06)	(5.40)
Age	−0.020 **	−0.014 **
	(−2.21)	(−2.18)
Salary	0.000 ***	0.000 ***
	(6.67)	(8.00)
Growth	0.251	0.277 **
	(1.54)	(2.51)
Duality	0.112 **	0.068 **
	(2.50)	(2.14)
Herfi10	−0.562	−0.339
	(−1.01)	(−0.92)
Broadsize	0.024	0.001
	(0.69)	(0.03)
_cons	10.825 ***	9.093 ***
	(7.02)	(9.40)
Indcd	Yes	Yes
Year	Yes	Yes
N	2901	2908
Adjusted R2	0.100	0.099

Note: T value in parentheses. ** p < 0.05. *** p < 0.01.

presents the regression results of the instrumental method. As we can see from both Table 6 and Table 7, CSR is still significant positive influence on business organization technology innovation, risk investment participation still suppresses the CSR on corporate R&D intensity of positive effect, after controlling for endogeneity problem, which shows that the main results is robust.

5.2. Change the Measurement of CSR Variables

The CSR score provided by HeXun was divided from A to E according to the interval where the score was located. According to the interval where the score was located, we assigned values of 1–5 to the CSR variables respectively and again ran the regression model. The regression results, which are not reported due to space constraints, were consistent with the aforementioned conclusion.

6. Research Conclusions and Implications

We use a sample of GEM listed companies to empirically test the relationship between CSR and corporate innovation. Following our regression analysis, we discuss the impact of different dimensions of CSR on corporate innovation. We find that CSR significantly improves the R&D investment level of high-growth business organizations, and the dimensions of shareholder responsibility and employee responsibility in social responsibility have a significant promoting effect on technological innovation. In addition, the introduction of VC will inhibit the promotion effect of CSR on R&D investment.

Considering the importance of innovation to the Chinese and the global economy, entrepreneurial business organizations should pay attention to the fulfillment of their social responsibilities. Good performance of social responsibility can not only help business organizations to establish a good brand effect, but also to better conduct innovation activities to gain competitive advantages. In addition, the management of VC institutions should be strengthened, the short-sighted behavior of VC institutions should be reduced, and the joint force between VC and the fulfillment of CSR should be formed, so as to jointly promote the innovation of business organizations and thus promote the innovation construction of the country. China association of securities investment funds in 2018. For example, the Green Investment Guidelines (Trial), announced on 11 November, proposed that the risk investment fund set up a green investment fund, and give priority to investment and environmental protection, energy conservation and clean energy-related business organizations and projects. If energy is higher than the average standard of business organization and project, the overall energy consumption should be reduced. It is of great significance to pay more attention to guide the risk investment of business organizations’ social innovation projects.