Corporate social responsibility, market segmentation, and innovation performance

Existing research on the relationship between corporate social responsibility (CSR) and innovation performance is quite controversial. To alleviate this controversy, this paper examines the impact of market segmentation on CSR innovation from a market environment perspective. Based on a sample of Chinese listed companies from 2010 to 2020, we found that CSR has a positive effect on innovation performance, but this relationship is moderated by regional market segmentation. Specifically, (1) market segmentation weakens the positive correlation between CSR and innovation, and excessive market segmentation even leads to a negative correlation; (2) the negative impact of market segmentation is mainly reflected in labor and capital market segmentation but is not obvious in product market segmentation; (3) compared to internal CSR, the negative impact of market segmentation is more obvious in external CSR. This paper provides a new perspective on the relationship between CSR and innovation and augments the research on the economic consequences of market segmentation.