CSR investments and innovation – Aligning and creating shared value

This research aims to advance the field of Corporate Social Responsibility (CSR) and innovation by exploring how CSR investments can drive product and service innovations, creating value for both the firm and its broader stakeholders. Specifically, it examines the relationship between CSR initiatives and their influence on CSR investments, as well as the resulting impact on innovation in products or services that contribute to shared value creation. The proposed framework is tested across three firm sizes—small, medium, and large—using a sample of 410 businesses within the Australian economy. The analysis was conducted using AMOS version 28, which established appropriate measurement indicators and revealed significant direct and indirect effects for the full sample. Additionally, the multi-group analysis explored nuanced relationships based on firm size. By investigating a relatively unexplored Australian context, the paper makes significant contributions by addressing the limited research on internal (employee) CSR, external (environmental) CSR, and ethical (governance) responsibility, examining their impacts on CSR investments. Furthermore, it explores how CSR investments influence innovation to create shared value and highlights the moderating effects of different firm sizes on the relationships between the antecedents, CSR investments, and innovation. The paper concludes by discussing the theoretical and practical implications of the findings, as well as outlining directions for future research and acknowledging limitations.