Too much of a good thing: the nonlinear corporate social responsibility–firm value nexus in an emerging market

Abstract The study aims to explore the complex relationship between corporate social responsibility (CSR), innovation, and firm value within the context of an emerging market, specifically Vietnam. The empirical analysis uses a panel dataset of 55 Vietnamese listed firms from 2016 to 2023. This study employs Two-Way Fixed-Effects (TWFE) panel regression with cluster-robust standard errors to estimate the structural relationships among CSR disclosure, innovation, and firm value. By using a disclosure-based CSR index, innovation intensity, and Tobin’s Q as measures, the study identifies a quadratic association between CSR disclosure and firm value, consistent with an inverted U-shaped pattern. However, this relationship is interpreted as a conditional within-firm association rather than definitive causal evidence. The study contributes to the literature by clarifying the nonlinear relationship between CSR and firm value in an emerging market context. It offers valuable insights for managers and policymakers on how to strategically integrate CSR and innovation to enhance firm value.