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Private versus public companies with strategic CSR

Alessandro Gioffré, Alessandro Tampieri () and Antonio Villanacci ()
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Antonio Villanacci: University of Florence

Journal of Economics, 2021, vol. 133, issue 2, No 2, 129-166

Abstract: Abstract We analyze the effects of strategic Corporate Social Responsibility (CSR) on social welfare in an industry where firms are owned by consumers (publicly owned) and CSR commitment takes the form of a fraction of the consumer surplus into the firms’ objective function. We compare this market configuration with the standard case of firms owned by entrepreneurs (privately owned). In line with the empirical evidence, consumers’ ownership gives an incentive to adopt a socially responsible, welfare improving statute. While privately-owned companies are limited in the level of social concern to implement, publicly-owned companies are not, and CSR is welfare-improving for any level of social concern. Surprisingly, a market configuration of publicly-owned CSR companies decreases welfare compared to an oligopoly of privately-owned CSR companies. The analysis is then extended by considering asymmetric oligopolies with different company types.

Keywords: CSR; Consumers’ firm ownership; Pareto optimum (search for similar items in EconPapers)
JEL-codes: H23 L13 O31 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s00712-020-00729-1

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