Corporate social responsibility, durable-goods and firm profitability

Gregory E. Goering
Additional contact information
Gregory E. Goering: University of Alaska Economics, Fairbanks, AK, USA, Postal: University of Alaska Economics, Fairbanks, AK, USA

Managerial and Decision Economics, 2010, vol. 31, issue 7, 489-496

Abstract: Utilizing a two-period durable-goods framework, we show that in uncommitted sales markets a firm may earn higher profits as it increases its level of corporate social responsibility (CSR). We find that this occurs even though CSR has no direct impact other than increasing the durable-goods firm's manufacturing costs. We show that in sales markets, CSR may allow the firm to credibly commit itself to lower production in the future. This, in turn, can enhance their profits even though the CSR activities are costly and provide no direct demand or marketing benefit in our model. This is important because it provides another, hereto unexplored, strategic rationale for the willingness of profit-maximizing firms to undertake costly CSR activities. Copyright © 2010 John Wiley & Sons, Ltd.

Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://hdl.handle.net/10.1002/mde.1508 Link to full text; subscription required (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:31:y:2010:i:7:p:489-496

DOI: 10.1002/mde.1508

Access Statistics for this article

Managerial and Decision Economics is currently edited by Antony Dnes

More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().