Free Entry with Upstream Corporate Social Responsibility

Qing Hu (), Ryo Masuyama and Tomomichi Mizuno ()
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Qing Hu: Kansai University
Tomomichi Mizuno: Kobe University

No 2613, Discussion Papers from Graduate School of Economics, Kobe University

Abstract: This study evaluates the desirability of downstream free entry within vertical relationships. We consider a vertical market consisting of an upstream firm with corporate social responsibility (CSR) and downstream firms with free entry. We find that the desirability of entry depends on the degree of upstream CSR. Specifically, when the degree of upstream CSR is sufficiently high, the downstream market faces excess entry, whereas when the degree is low, it faces insufficient entry. When the upstream firm commits to CSR, it lowers the input price, thereby encouraging downstream entry. This study identifies a new factor that justifies the entry regulation policies.

Keywords: free entry; corporate social responsibility; vertical relationship (search for similar items in EconPapers)
JEL-codes: D43 L10 L13 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2026-08
New Economics Papers: this item is included in nep-com and nep-mic
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