Why Do Private Firms Invest in Public Goods?

Gurneeta Vasudeva and Hildy Teegen
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Gurneeta Vasudeva: Carlson School of Management, University of Minnesota
Hildy Teegen: Darla Moore School of Business, University of South Carolina

Chapter Chapter Fourteen in Cross-Sector Leadership for the Green Economy, 2011, pp 263-276 from Palgrave Macmillan

Abstract: Abstract Recent years have witnessed a growing debate surrounding the idea that firms that act in public interest will profit from doing so. Although the proponents of this idea have argued that public and private interests are inextricably linked for firms seeking sustainable competitive advantage (e.g., Kanter, 2009), the skeptics offer a different perspective. They point out that “in circumstances in which profits and social welfare are in direct opposition [as has been argued in the case of the oil and gas industry, for instance], managers are unlikely to act voluntarily in the public interest and against shareholder interests” (Karnani, 2010). Based on these observations, we develop a framework for why the private sector invests in the creation of public goods, how it organizes such activities, and how it benefits from these investments.

Keywords: Public Good; Carbon Capture; Strategic Management Journal; Private Benefit; Corporate Entrepreneurship (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-01589-1_14

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DOI: 10.1057/9781137015891_14

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