Corporate Social Responsibility and Environmentally Sound Technology in Endogenous Firm Growth

Angela C. Chao and Zhengning Pu
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Angela C. Chao: School of Management and Economics, Southeast University, Nanjing 210096, China
Zhengning Pu: School of Management and Economics, Southeast University, Nanjing 210096, China

Sustainability, 2017, vol. 9, issue 2, 1-13

Abstract: We have entered the “New Normal” economy, with more emphasis on economic growth driven by innovation than resource. This paper investigates the impacts of firms considering corporate social responsibility and environmentally sound technology by building a three-stage Cournot competition model with asymmetric cost. The sustainable development of economic and endogenous firm growth achieves the win–win result in the theoretical model. Using data from 31 firms in China, this paper empirically researches on the relationships among corporate social responsibility, environmentally sound technology and firm endogenous growth. The results show that: (1) Marginal cost decreased with the increase of innovation, as well as getting government research and development subsidy, which has a positive effect on firm growth. (2) Consumers respond positively to corporate social responsibility initiative, the reputation of the firm can be improved. At the same time, environmentally sound technology objectively reduces the marginal cost of competitors because of the technology spillover. (3) Profit of a firm undertaking corporate social responsibility partly decreases, which has a negative effect on firm growth. The contradiction between corporate social responsibility and profit of firm could be adjusted, such as socially responsible investment fund hosed by institutional investors.

Keywords: corporate social responsibility (CSR); environmentally sound technology; firm endogenous growth (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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