This article investigates the relationship between corporate social

responsibility (CSR) and investment efficiency from a strategic perspective.

Taking into account the competitive strategy between firms, we proposed

an adjusted competitive strategy measure and fitted CSR with a competitive

strategy such as strategic CSR and examined the impact of competitive

strategy on CSR and the sensitivity of investment to free cash flow. The

results show that firms engage in CSR strategically. The stronger the

strategic substitutes in which a firm competes, the more likely it is to engage

in CSR activities. The weaker the strategic substitutes and complements in

which a firm competes, the better its CSR performance. However, strategic

CSR and corporate strategy do not have a synergistic effect in mitigating

overinvestment. The results suggest that strategic CSR performance

eliminates the sensitivity of investment to free cash flow. CSR can be a

powerful tool to link corporate strategy and social sustainability, which has

the potential to create a win-win situation for both the firm and society.