Review Reports

Round 1

Reviewer 1 Report

please see mu attached file

Comments for author File: Comments.pdf

Author Response

Comment 1：

First, I suggest to the authors to change the title like follows: Can fulfillment of social responsibility enable enterprises to innovate? The role of corporate financialization and agency costs

Authors’ response

The paper title has been revised according to the suggestion of reviewer.

Comment 2：

the abstract is too long; there are many ideas with enough order. The authors need to make the abstract shorter and more concise.

Authors’ response

We have made the abstract shorter and more concise (Line 10-26).

Comment 3：

There is a lack of the theoretical literature in the introduction section. The authors need to highlight the literature on CSR and corporate innovation, then identify the gap in this literature and underline the value added of the study. None of these aspects have been elaborated in the introduction section. Finally, please add a sentence to describe the paper design (literature review, empirical methodology, conclusion…).

Authors’ response

We have added literatures on CSR and corporate innovation and identified the gap (Line 53-57,75-79). we have described the paper design (Line 89-110).

Comment 4：

The authors put the following Hypothesis H2: Corporate financialization plays an intermediary role in the impact of social responsibility on corporate innovation. We suggest to replace the term “intermediary role” by “moderator role”. The same remark applies to hypothesis 3.

Authors’ response

The purpose of this paper is to explore whether corporate financialization and agency cost play an intermediary role in the impact of fulfilling social responsibility on corporate innovation. The purpose is to find the channel between the two, that is, fulfilling social responsibility affects corporate innovation through corporate financialization and agency cost path since both play an intermediary role.

Comment 5：

I suggest to use the following recent articles published in sustainability in your literature review section:

W.Ghardallou, N. Alessa (2022). Corporate Social Responsibility and Firm Performance in GCC Countries: A Panel Smooth Transition Regression Model. Sustainability, 14(13): 7908

Ghardallou W. (2022). Corporate Sustainability and Firm Performance: The Moderating Role of CEO Education and Tenure. Sustainability, 14(6):3513

Authors’ response

We have cited both articles published in sustainability in literature review section (Line 137-142).

Comment 6：

The authors used the following variable to measure agency costs: management expense rate is used in this study to measure agency costs, that is, the ratio of management expenses to the core business income. Kindly cite at least on reference that has used the same variable.

Authors’ response

We have added the reference in the revised manuscript (Line 445).

Anderson M.，R. Banker and S. Janakiraman. Cost Behavior and Fundamental Analysis of SG&A Costs[J]. Journal of Accounting,Auditing & Finance,2007,22:39-47.

Comment 7：

The difference between moderator variables, mediating variables and Heterogeneity variables is not clear. Please explain each of these categories. If you mean by these various terms moderators with interaction effects, so there is no need to distinguish them in separate sections.

Authors’ response

Moderator means that if the relationship between variable Y and variable X is a function of variable M, the relationship between Y and X is affected by the third variable M.

Mediator is the intermediary between independent variables and dependent variables, and is the substantive and internal reason for independent variables to affect dependent variables.

Heterogeneity refers to that the influence of one variable X on another variable Y may vary from individual to individual.

Comment 8：

The methodology used to test the moderator effect of corporate financialization and agency cost is surprising! The authors regress a first model and include the output in a second model. Why didn’t you use directly interaction variables?

Authors’ response

In this paper, enterprise financialization and agency cost play an intermediary role. The author refers to Baron et al (1986)'s "three-step method of intermediary effect" test procedure for verification. Therefore, interaction terms are not directly used.

Baron R M,Kenny D A.The moderator-mediator variable distinction in social psychological research: conceptual, strategic and statistical considerations[J]. Journal of Personality & Social Psychology,1986,51(6):1173-1182.

Comment 9：

Please add a note below each table to explain statistics, stars, and values between parentheses…

Authors’ response

We have added a note below each table to explain statistics, stars, and values between parentheses.

Comment 10：

In table 4, how did you explain a coefficient of csr which not significant in the first column and that becomes significant in the second column??

Authors’ response

In Table 4, the author intends to test the moderating effect of commercial credit and institutional investors on the relationship between fulfilling social responsibility and enterprise innovation, and judge the direction of the moderating effect through the symbols of interactive items. Therefore, the author focuses more on judging according to the symbols of interactive items.

Comment 11：

Overall, tables need to be organized to fit the content ( it is clearer to use large tables).

Authors’ response

We have tried to make sure that the tables in the text correspond to the content.

Reviewer 2 Report

Dear Authors, 

I Think you did well, but the following notes will enhance your paper

1. Explain briefly the relation between social responsibility and Agency theory

2. I think H1 and H2 can be emarged in one hypothesis 

3. The conclusions can be summerized 

Regards 

Author Response

Thanks for your encouraging comments

Comment 1：

Explain briefly the relation between social responsibility and Agency theory.

Authors’ response

Agency theory is mainly concerned with the contractual relationship between the provider and the user of enterprise resources. According to agency theory, the owner of economic resources is the principal, and the manager responsible for using and controlling these resources is the agent. There are two main types of agency conflicts: Management and Shareholders, controlling shareholders and minority shareholders.

Fulfillment of social responsibility can drive innovation by reducing agency conflicts and governance costs. First, in view of the mandatory CSR information disclosure policy, the management will consciously regulate operations to reduce on-the-job consumption, moral hazards, and excessive investment, thereby reducing the degree of information asymmetry between shareholders and the management, saving on agency costs, and enhancing the flexible space for enterprises to conduct innovative activities. Second, fulfilling social responsibility is conducive to curbing the management’s motivation to pursue private interests through surplus manipulation and can effectively improve the transparency of accounting. Third, enterprises’ practice of social responsibility require the management to not limit itself to the acquisition of short-term profits when selecting investment projects but to pay attention to long-term value and drive its long-term interests as well as those of shareholders to demonstrate convergence. This practice may encourage the management to take the initiative to safeguard the interests of the enterprise and reduce its self-interest behavior with high standards by alleviating agent conflicts, thereby improving the risk-bearing level of enterprise innovation (Line 299-324).

Comment 2：

I think H1 and H2 can be emarged in one hypothesis.

Authors’ response

We have emerged H1 and H2 in one part (Line 262-330).

 Comment 3：

The conclusions can be summarized.

Authors’ response

We have summarized the conclusions (Line 747-766).