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Digitalization and firms’ innovation efficiency: Do corporate social responsibility and irresponsibility matter?

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Abstract

High innovation efficiency is regarded as an important starting point for enhancing the competitive advantage of enterprises and encouraging them to achieve sustainable development. However, to date, how digitalization affects firms’ innovation efficiency is still unclear. We integrate absorptive capacity and stakeholder theory to argue that in the short term, digitalization undermines firms’ absorptive capacity, thereby reducing their innovation efficiency. Second, we propose that corporate social responsibility (CSR) (including internal and external CSR) weakens the negative impact of digitalization on firms’ innovation efficiency by mitigating its destructive effect on their absorptive capacity. In contrast, corporate social irresponsibility (CSiR) (including internal and external CSiR) enhances the negative impact of digitalization on firms’ innovation efficiency by increasing the destructive effect of digitalization on their absorptive capacity. Finally, we argue that internal CSR plays a stronger buffering role than does external CSR. In contrast, internal CSiR plays a stronger enhancing role than does external CSiR. Based on the fixed effects model, we obtain empirical evidence to support most of our theoretical views from our empirical tests of 212 Chinese pharmaceutical listed companies. This research brings new insights into a more nuanced understanding of the impact of digitalization on firms’ innovation.

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Notes

  1. At the November 4, 2023 exchange rate, 1 USD = 7.1630122 CNY.

  2. https://www.sohu.com/a/458515454_120056153.

  3. http://www.wingodata.com.

  4. At the November 4, 2023 exchange rate, 1 USD = 7.1630122 CNY.

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Acknowledgements

This work was supported by the National Natural Science Foundation Project of China (Grant No.72202043), the Guangdong Basic and Applied Basic Research Foundation (Grant No. 2021A1515110864), and the Natural Science Foundation of Shandong Province (ZR2022QG054).

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  1. School of Management, Guangdong University of Technology, Tianhe District, 161 Yinglong Road, Guangzhou, Guangdong, China

    Xi Zhong

  2. School of Business Administration, South China University of Technology, 381 Wushan Road, Tianhe District, Guangzhou, Guangdong, China

    Ge Ren

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Table 11 Sample screening process
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Table 12 Feature lexicon of firms’ digitalization
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Table 13 The definition of variables
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Table 14 Segmentation metrics for digital transformation
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Zhong, X., Ren, G. Digitalization and firms’ innovation efficiency: Do corporate social responsibility and irresponsibility matter?. J Technol Transf (2024). https://doi.org/10.1007/s10961-024-10075-9

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