Influence of Corporate Social Responsibility on Industry’s Green Product and Process Innovation: Sustainable Development as a Mediator

While there are wide-ranging studies on corporate social responsibility (CSR), innovation, and sustainable development (SD), few studies have tried to make a connection between those three organizational factors in the industry section. Therefore, this study tried to investigate how does CSR with its four main components contribute to industry’s green product and process innovation through sustainable development. This study has a comprehensive view to compare the SD to the existing studies by considering all three aspects of SD, namely, economic, social and environmentally sustainable development. In fact, it is going to be answered that: whether economic, social and environmentally sustainable developments play as mediators in between CSR and green innovation (product and process) in industry? Data were collected during June-October 2020 from 217 manufacturing industries from Iran where CSR has not been appropriately dealt within theoretical as well as practical terms. AMOS structural equation modeling (AMOS-SEM) method was applied to analyze data. Following the Baron and Kenny approach in testing hypotheses, it was found that CSR-process innovation is a fully mediated relationship by environmentally sustainable development, and partially mediated by economic and social sustainable development. Whereas CSR-product innovation is fully mediated by social sustainable development and partially mediated by economic and environmentally sustainable development. In the second part of the data analysis, customers’ expectations, and financial issues respectively, were known as the highest and lowest motivational factors in Iranian manufacture industry, for implementing CSR. The results help Iranian managers to understand their current status, capabilities, strengths and weaknesses in sustainable development. It also recommends that since CSR dimensions had a positive effect on all sustainable development aspects, they should be integrated in the organizational strategies for having better sustainable development, and higher green product and process innovation in the industry.