Corporate social responsibility as a driver of digital innovation in SMEs: the mediation effect of absorptive capacity

Currently, digital innovation is one of the biggest challenges facing small and medium-sized enterprises (SMEs). This study analyses how SMEs can achieve higher levels of digital innovation despite their lack of resources. Using a dataset consisting of 520 German SMEs, we propose and test a model in which corporate social responsibility enables knowledge-sharing and supports SMEs in acquiring the resources needed for digital innovation development. As hypothesised, we found empirical evidence for a positive mediation effect in which absorptive capacity links corporate social responsibility and an SME's digital innovation output. In sum, this study helps to explain the relationship between corporate social responsibility and an SME's digital innovation, thus presenting far-reaching implications for SME research and the emerging scholarly debate on digital innovation in resource-constrained organisations.