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Corporate Social Responsibility along the Global Value Chain

Philipp Herkenhoff, Sebastian Krautheim, Finn Semrau () and Frauke Steglich

No 9498, CESifo Working Paper Series from CESifo

Abstract: Firms are under increasing pressure to meet stakeholders’ demand for Corporate Social Responsibility (CSR) along their global value chains. We study the incentives for and investments in CSR at different stages of the production process. We analyze a model of sequential production with incomplete contracts where CSR by independent suppliers differentiates the final product in the eyes of caring consumers. The model predicts an increasing CSR profile for suppliers along the value chain: from upstream suppliers with low CSR to downstream suppliers with higher CSR. We confirm this prediction using Indian firm-level data. We compute a firm’s value chain position combining product-level information in our data with the World Input-Output Database. We find that more downstream firms have higher CSR expenditures as measured by a combination of staff welfare spending and social community spending.

Keywords: corporate social responsibility; global value chains; incomplete contracts; property rights theory; GVC positioning; India; emerging markets (search for similar items in EconPapers)
JEL-codes: D23 F12 F14 F18 F61 F63 L23 M14 O12 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-hrm and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

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