Corporate social responsibility in unionised network industries

Luciano Fanti and Domenico Buccella

International Review of Economics, 2021, vol. 68, issue 2, No 4, 235-262

Abstract: Abstract In a duopoly network industry with decentralised union wage setting, this paper studies the impact of the firms’ engagement in consumer-friendly corporate social responsibility (CSR) on profitability and welfare. It is shown that, regardless of whether the wage setting occurs prior to or after the choice of the CSR levels, being a CSR-type firm rather than a simple profit-maximiser can lead to larger profits and thus higher welfare for their owners/stakeholders. However, the welfare analysis reveals that there is always conflict of interest between the firms’ owners on the one side and consumers, unions, and society on the other side, with respect for the timing of the decision about CSR relative to that of the wage setting.

Keywords: Cournot duopoly; Network industry; Labour union; Corporate social responsibility (search for similar items in EconPapers)
JEL-codes: J51 L13 M14 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s12232-021-00366-0

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