The key to carving out a high corporate reputation based on innovation: Corporate social responsibility

Abstract

Innovation has become a key element for entrepreneurial success, and constituting one of the basic elements in building a firm’s reputation, especially in the 20th and 21st centuries. Its field is increasingly larger with broader spectrums and applications. Literature in the fields of economics, business management, industrial systems, and organizations has examined and developed innovation theories to comprehend the economic environment and its phenomena. Nonetheless, to the authors’ knowledge, innovation has not been thoroughly assessed by scholars of social structures. Therefore, concepts of innovation and network interactions or their social dimensions need further research. In an attempt to cover this research gap, the present study provides insights on how a firm’s interaction with society may drive corporate knowledge generation, thus increasing the firm’s intangible assets. Specifically, our findings show that companies that include their stakeholders’ interests in the knowledge-creation and innovation process are able to enhance their intangible assets, and thus the capitalization of such knowledge. Similarly, firms with international presence have a large number of global stakeholders, which also evidences a positive relation with its intangible assets. By honoring the social contract, firms benefit from stakeholders while contributing to social welfare, creating a win-win situation.