Corporate Social Responsibility And Green Innovation In Institutional Change

The resource and environment crisis caused by the traditional crude economic development model is forcing the economic development model to transform to the direction of intensive and green.The high-quality sustainable development strategy and the "double carbon" goal have raised the demand for green technology innovation and corporate social responsibility.In recent decades,CSR has been recognized as an important business practice worldwide.However,there are differences in the willingness,motivation and economic consequences of CSR in different institutional contexts.In China’s emerging plus transitional market economy environment,do Organization Department of the CPC No.18 and carbon emissions trading policies,as mandatory institutional changes,affect CSR behavior?In particularly,as the demand for a low-carbon economy from all walks of life continues to deepen,the mechanism of the impact of different institutional changes on the level of corporate green innovation deserves to be explored in depth.The analysis of the above questions is both an exploration of the paths for enterprises to achieve sustainable growth at the micro level and an empirical portrayal and measurement of policy effectiveness at the macro level.In view of this,this paper explores the relationship between CSR fulfillment and green innovation level under command-based and market-based regulation policies,and analyzes their impact mechanisms based on the perspective of financing constraints,using the issuance of Circular 18 of the Ministry of Organization and the implementation of carbon emission trading policy as quasinatural experiments,respectively.First,CSR behavior and green innovation in institutional change are analyzed from a theoretical perspective.On the one hand,the theory,mechanism,and evolution of institutional change affecting CSR are explained in detail from a macro perspective.The release of two different types and orientations of regulatory policies,namely,No.18 of the Ministry of Organization and carbon emissions trading policy,is taken as the concrete manifestation of institutional change,which provides the basis for the later logical and empirical analysis to unfold.On the other hand,the evolutionary mechanisms of governmental actions and enterprises’ choices of green innovation behaviors are explored by modeling governmental regulations and enterprises’ response behaviors.The model derivation analysis reveals that the government and enterprises initially do not pay attention to sustainable development activities such as green innovation,but with the increasing public awareness of environmental protection and the improvement of institutional construction,enterprises gradually tend to carry out green innovation activities under the guidance of government regulation.In the evolutionary process,the relationship between government regulation and corporate behavior is presented,in which companies need the guidance of government regulation policies and regulatory systems to carry out green innovation,and environmentally friendly behaviors such as green innovation can meet the expectations of the government.On this basis,the inner operating mechanism of enterprises’ green innovation behavior choices is explored,and the positive impact of alleviating financing constraints on green innovation is confirmed.Secondly,the impact of Circular 18 of the Ministry of the Central Organization as a command-based regulation and carbon emissions trading as a market-based regulation on corporate social responsibility is explored separately.On the one hand,based on the resignations of official independent directors resulting from the issuance of Circular 18,the data on the resignations of corporate official independent directors from October 2013 to October 2015 are manually collected and compiled to examine the impact of political affiliation changes on corporate social responsibility and corporate value.The study found that corporate hiring of officer independent directors and the political affiliation backgrounds possessed by corporate executives did not lead to higher levels of social responsibility.When the resignation of an officer-independent director leads to a change in political affiliation,the decrease in political resources leads to a decrease in corporate value,at which time the company can use social responsibility as a strategic tool to obtain resources and increase value.For companies in industries with fierce market competition,strong local government intervention,and heavy polluters,they are more likely to use fulfillment of social responsibility as a strategic alternative tool to political affiliation.In addition,the resignation of independent directors who have served as leaders in enterprises and institutions such as universities does not have a significant impact on CSR compared to the sole directors who are officials of party and government agencies.On the other hand,a double difference model is used to empirically test the impact of the implementation of carbon trading policy on corporate social responsibility and financing constraints.It is found that the implementation of carbon trading policy can induce companies to fulfill more social responsibility,especially environmental responsibility,while other dimensions of social responsibility,such as product,charity and employee relations,are not affected by carbon trading policy.In addition,the implementation of carbon trading policy can alleviate the financing constraints faced by enterprises by performing financial functions such as resource allocation and risk management.Under the market-based environmental regulation policy,the effect of fulfilling social responsibility and alleviating financing constraints is more significant for non-heavy polluting enterprises compared to heavy polluting enterprises.Further,the impact of corporate social responsibility on green innovation is explored based on the financing constraint mechanism.It is found that corporate fulfillment of social and environmental responsibility significantly improves green innovation,while improving the dimensions of product,charity,and employee relations has no effect on green innovation.The promotion effect of CSR and environmental responsibility on green innovation was more significant in central region enterprises,private enterprises,and non-heavy polluting enterprises.At the mechanism level,it is found that corporate social responsibility fulfillment can act on green innovation,especially high-quality green innovation,by alleviating financing constraints.In further analysis,social responsibility is divided into internal CSR and external CSR,and it is found that the increase of external social responsibility of enterprises is beneficial to increase the high-quality green innovation of enterprises,and has no effect on low-quality green utility model patents.In addition,the lack of corporate environmental responsibility can crowd out low-quality green innovation.Finally,the relationship between CSR,financing constraints and green innovation is analyzed based on two types of regulation.One,the relationship between political association change,CSR and green innovation is explored based on the financing constraint mechanism.It is found that the change in political affiliation caused by the issuance of No.18 improves CSR behavior,which in turn is beneficial to enhance the number of green patent applications,especially the number of low-quality green new patent applications.Further study shows that the change in political affiliation increases the financing constraint faced by enterprises,while the fulfillment of social responsibility by enterprises can alleviate the financing constraint,which is conducive to green innovation,and the effect is more significant in the heavy polluting enterprises.Second,we investigate the mechanism by which carbon trading policies promote the fulfillment of corporate social responsibility and alleviate financing constraints for green innovation.The study finds that carbon trading policy,as a market-based regulatory system,can promote green innovation,especially high-quality green innovation,by improving corporate social responsibility behavior,and carbon trading policy can play the function of resource allocation and risk management to alleviate financing constraints,while the alleviation of financing constraints can positively regulate the positive impact of carbon trading on green innovation.The above findings suggest that both Circular 18 and the carbon trading policy improve green innovation by promoting corporate social responsibility and alleviating corporate financing constraints,and both regulations play both exogenous regulation-driven and endogenous economic-driven roles.The difference is that the issuance of Circular 18,as a command-and-control regulatory policy,promotes low-quality green innovation more significantly,while the carbon trading policy,as a market-incentive environmental regulatory policy,significantly promotes high-quality green innovation by promoting the fulfillment of corporate social responsibility.At the mechanism level,the change of political affiliation increases the financing constraints faced by enterprises,while the fulfillment of social responsibility by enterprises can alleviate the financing constraints caused by the change of political affiliation,which is conducive to increasing the number of green utility model patent applications.In contrast,the implementation of carbon emission trading policy can directly alleviate the financing constraint of enterprises through its financial function,and thus increase the level of high-quality green innovation.The research provides empirical evidence for understanding CSR under different institutional arrangements as a strategic tool to enhance value,alleviate financing constraints,and support green and sustainable development.By exploring the motivation,occurrence and mechanisms of corporate social responsibility in institutional change,corresponding policy recommendations are further proposed.Since institutions are still imperfect in the context of China’s transition economy,political affiliation as an alternative mechanism to informal institutions can help enterprises obtain resources,but its existence sometimes leads to phenomena such as resource misallocation by enterprises.The government should create a fair competitive market environment for enterprises by improving the system construction and encourage enterprises to actively engage in socially responsible behavior and information disclosure to obtain stakeholders’ support.In addition,effective environmental regulation by the government is an important driving force for enterprises to fulfill their social responsibility,alleviate financing constraints,and improve green innovation activities.The government should strengthen incentives and support for enterprises’ innovative behaviors,encourage them to improve their green innovation capabilities through environmental subsidies and other means,and guide them to allocate funds to green innovation strategies.Enterprises and their managers should cultivate a proper awareness of social responsibility,recognize the positive impact of corporate social responsibility fulfillment on economic and environmental benefits,and consider social responsibility as a capital investment rather than an operational cost.By enhancing disclosure of social responsibility reports,they should send positive signals to the outside world,actively maintain relationships with stakeholders such as the government,and find ways to bring stakeholder knowledge and resources into the enterprise.At the same time,enterprises should actively implement green innovation strategies to reduce pollution emissions while creating economic value to achieve a win-win situation where corporate profits and social benefits are jointly improved.