Strategic Environmental Corporate Social Responsibility (ECSR) Certification and Endogenous Market Structure

Ajay Sharma and Siddhartha Rastogi

The B.E. Journal of Theoretical Economics, 2024, vol. 24, issue 1, 419-433

Abstract: This paper extends the findings of Liu, Wang, and Lee (2015. “Strategic Environmental Corporate Social Responsibility in a Differentiated Duopoly Market.” Economics Letters 129: 108–11), along two dimensions. First, we consider the case of endogenous market structure a la Singh and Vives (1984. “Price and Quantity Competition in a Differentiated Duopoly.” The RAND Journal of Economics: 546–54). Second, we refine the ECSR certification standards in differentiated duopoly with analysis of both uniform and discriminating standards. We find that NGO certifier will set the ECSR standards below the optimal level. We show that given the ECSR certification standards, there is a possibility of both price and quantity contracts choices by the firms in endogenous market structure. Additionally, we highlight the market structures emerging due to uniform and discriminating ECSR standards.

Keywords: corporate social responsibility certification; differentiated duopoly; environmental standards; mixed markets; price competition; quantity competition (search for similar items in EconPapers)
JEL-codes: D43 L13 L22 M14 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Strategic Environmental Corporate Social Responsibility (ECSR) Certification and Endogenous Market Structure (2023)
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DOI: 10.1515/bejte-2022-0139

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