Corporate Social Responsibilities and Firm Value: Exploring the Dual Roles of Innovation

Abstract The study aims to explore the complex relationship between Corporate Social Responsibility (CSR), Innovation, and Firm Value within the context of an emerging market, specifically Vietnam. The empirical analysis uses a panel dataset of 128 Vietnamese listed firms from 2016 to 2023. The study employs Partial Least Squares Structural Equation Modeling (PLS-SEM) with a fixed-effects transformation to analyze the direct and indirect effects of CSR on firm value. The results show that the relationship between CSR and Firm value is U-shaped. Besides, the innovation is found to be a significant mediator in this process, and a positive moderator that amplifies the financial returns of CSR activities, particularly in firms with high innovative capabilities. The study contributes to the literature by providing a more nuanced understanding of the CSR-Firm value nexus, especially by exploring the U-shaped relationship and the dual roles of innovation (mediator and moderator) in an emerging market context. It offers valuable insights for managers and policymakers on how to strategically integrate CSR and innovation to enhance firm value.