Corporate social responsibility and its effect on innovation and firm performance: An empirical research in SMEs

The link between CSR and business value has been investigated, but a significant research gap remains when considering the relationship between CSR and innovation. The paper assesses its relationship with organizational innovation and firm performance in a single integrative model by using structural equation modelling on a data set of 552 Spanish firms. Our results supports a partial mediation effect of innovation performance on the relationship between CSR and firm performance, since the effect of CSR on firm performance shrinks upon the addition of innovation performance to the model. The findings may help to understand how CSR is an important driver mechanism for companies to be more innovative, efficient and effective.