Corporate social responsibility, vertical product differentiation, and privatization policy
Xingtang Wang () and
Leonard F. S. Wang ()
Additional contact information
Xingtang Wang: Guangdong University of Foreign Studies
Leonard F. S. Wang: Zhongnan University of Economics and Law
The Japanese Economic Review, 2022, vol. 73, issue 2, No 8, 403-425
Abstract In this paper, we consider that the public firm competes with a private firm caring about consumer surplus in vertically differentiated market. We explore the privatization policy, and the relationship between the optimal degree of privatization and the CSR degree of private firm. We find that if the public firm produces low-quality products, the government should adopt a policy of privatization, and the optimal degree of privatization is decreasing (increasing) in the CSR degree of private firm, if the cost difference of quality is sufficiently small (large). However, if the public firm produces high-quality products and the cost difference of quality is sufficiently large (small), the government should (not) adopt a policy of privatization. The government's privatization policy is related to the difference in quality and cost of the products produced by firms. We further analyze the endogenous selection of product quality between public firm and private firm and find that if the quality gap between high-quality products and low-quality products is sufficiently large, both firms will choose to produce high-quality products. If the product quality gap is of medium-intensity, the public firm chooses to produce low-quality products, and the private firm chooses to produce high-quality products. However, if the product quality gap is sufficiently small, there is no Nash equilibrium.
Keywords: Vertical product differentiation; Mixed oligopoly; Corporate social responsibility; Privatization policy; Cost-difference quality; L13; L33; L50; H4 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s42973-020-00053-9 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:jecrev:v:73:y:2022:i:2:d:10.1007_s42973-020-00053-9
Ordering information: This journal article can be ordered from
Access Statistics for this article
The Japanese Economic Review is currently edited by Michihiro Kandori
More articles in The Japanese Economic Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().