The informational role of nongovernmental organizations to induce self-regulation: Cheering the leaders or booing the laggards?

Matthieu Glachant and Gabrielle Moineville ()
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Gabrielle Moineville: CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique

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Abstract: Non-governmental organizations (NGOs) play a key role in creating incentives for firms to develop a Corporate Social Responsibility (CSR) policy by disclosing publicly self-regulatory corporate efforts. Their informational behavior is heterogeneous: Some NGOs mostly disclose information on firms that do not behave responsibly (e.g., Greenpeace). Others are specialized in revealing firms that are socially or environmentally responsible (e.g., the Marine Stewardship Council). We develop a model describing the interactions between a NGO, a continuum of firms and a representative stakeholder to explain what drives the NGO communication choice and its impact on the level of self-regulation. We show that the NGO specializes in equilibrium: depending on the size of its budget, it either chooses to cheer the leaders or to boo the laggards. We extend the model to the case with multiple NGOs. We also introduce the possibility of NGO corporate partnerships and derive policy implications.

Keywords: Non governmental organisations; Corporate Social Responsibility; incentives; self regulation (search for similar items in EconPapers)
Date: 2012-07-11
Note: View the original document on HAL open archive server: https://minesparis-psl.hal.science/hal-00716864v2
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