Exploring the direct and indirect effects of innovation on CSR in pharmaceutical industry in China

Abstract

Previous studies showed increasing evidence that large firms search for radical innovation as a driver of firm growth, particularly in the research and development sector. Proficiency at innovating via new products remains not merely a key priority for many managers but arguably the ultimate dynamic capability within a firm. However, there is limited understanding of how innovation influences CSR in pharmaceutical industry. Following a mixed methods approach, the investigation started with a review of extant literature at the intersection of intellectual property (IP), knowledge management (KM), information technology (IT), open innovation (OI), social capital (SC), innovation capability and CSR. This research adapted a quantitative approach using the structural equation modelling (SEM) statistical technique based on the variance through partial least squares (PLS). The main finding explicit that innovation capability significantly affects CSR directly, while open innovation significantly affects the innovation capability of Chinese pharmaceutical companies.