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Corporate Social Responsibility, CEO Compensation Structure, and Corporate Innovation Activities

Author

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  • Bu-Kyung Choi

    (School of Business, Ewha Womans University, 52 Ewhayeodae-gil, Seoul 03760, Korea)

  • Ji-Young Ahn

    (School of Business, Ewha Womans University, 52 Ewhayeodae-gil, Seoul 03760, Korea)

  • Myeong-Cheol Choi

    (College of Business, Gachon University, Seongnam 13120, Korea)

Abstract

This study empirically investigated the economic effect of CSR initiatives on innovation by examining Korean firms. Our primary objective of this study was to explore how a CEO compensation system can affect the CSR-innovation relationship. An integrated model of the impact of CSR on innovation activities was developed through analyzing various CEO compensation components such as structure, type, mix, and distribution. We identified the CEO compensation system that more suitably supports CSR in driving innovation performance improvement, and empirically examined a compensation system that enhances corporate innovation by creating a good alignment with CSR. Using a longitudinal data, we empirically tested the interactive effect of a CSR and compensation system of CEO in Korean publicly traded companies. Our empirical findings concerning the interaction between CSR strategies and CEO compensation schemes hold practical implications for establishing and implementing a suitable human resource system to improve organizational competitiveness.

Suggested Citation

  • Bu-Kyung Choi & Ji-Young Ahn & Myeong-Cheol Choi, 2021. "Corporate Social Responsibility, CEO Compensation Structure, and Corporate Innovation Activities," Sustainability, MDPI, vol. 13(23), pages 1-15, November.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:23:p:13039-:d:687388
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    1. Sergei G. Vagin & Elena I. Kostyukova & Natalia E. Spiridonova & Tatiana M. Vorozheykina, 2022. "Financial Risk Management Based on Corporate Social Responsibility in the Interests of Sustainable Development," Risks, MDPI, vol. 10(2), pages 1-13, February.
    2. Tarsisius Renald Suganda & Jungmu Kim, 2023. "An Empirical Study on the Relationship between Corporate Social Responsibility and Default Risk: Evidence in Korea," Sustainability, MDPI, vol. 15(4), pages 1-20, February.

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