The Dark Side of Firms’ Green Technology Innovation on Corporate Social Responsibility: Evidence from China

Green technology innovation (GTI) has been increasingly adopted by firms worldwide to promote sustainable development, whereas its potential downsides have been largely overlooked. Drawing on moral licensing theory, we devise a framework to reveal the potential dark side of firms’ GTI on corporate social responsibility (CSR). We argue that with the global eco-awakening, GTI has been an efficient means for firms to meet their stakeholders’ expectations and environmental legitimacy. This may cause a moral licensing effect for senior executives’ ethical strategic decision-making, due to their belief that existing GTI could balance the firm’s subsequent moral neglect, thereby minimizing firms’ CSR. Using the Chinese listed manufacturing firms as a sample, we find empirical support for our prediction. In addition, we investigate how firms’ environmental awards and honors may exacerbate the negative impact of GTI on CSR, whereas the presence of women executives may mitigate the relation. Our findings can trigger firms’ reflections on GTI’s downsides, and contribute to research and practice in comprehensively understanding firms’ GTI consequences, CSR decisions, and moral balance.