The Economics of Corporate Social Responsibility (CSR): Selling to Someone who Has Personal Valuation

Martin Siyaranamual ()

No 200706, Working Papers in Economics and Development Studies (WoPEDS) from Department of Economics, Padjadjaran University

Abstract: This paper provides general insight on the economic feasibility and desirability of Corporate Social Responsibility (CSR), in order to explain why some firms voluntarily over comply with social matters. In this paper I define CSR as the activity in which firms makes an explicit pair between the sales of private good and the provision of public good. Furthermore, the consumers are divided into two different categories; responsible consumers and non responsible ones. The main result shows that CSR activity could be considered as a firm's strategy to internalize the externality, and thus it would not be contradicted with profit maximization. Moreover, could be an alternative way for the provision of public good, especially in the presence of government failure.

Keywords: Corporate social responsibility; public goods (search for similar items in EconPapers)
JEL-codes: L15 L21 M14 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2007-06, Revised 2007-06
New Economics Papers: this item is included in nep-soc
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