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An Economic View of Corporate Social Impact

Hunt Allcott, Giovanni Montanari, Bora Ozaltun and Brandon Tan

No 31803, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The growing discussions of impact investing and stakeholder capitalism have increased interest in measuring companies' social impact. We conceptualize corporate social impact as the welfare loss that would be caused by a firm's exit. To illustrate, we quantify the social impacts of 74 firms in 12 industries using a new survey measuring consumer and worker substitution patterns combined with models of product and labor markets. We find that consumer surplus is the primary component of social impact (dwarfing profits, worker surplus, and externalities), suggesting that consumer impacts deserve more attention from impact investors. Existing ESG and social impact ratings are essentially unrelated to our economically grounded measures.

JEL-codes: D6 J23 L13 L62 L66 L71 L81 L93 M14 Q54 (search for similar items in EconPapers)
Date: 2023-10
New Economics Papers: this item is included in nep-env, nep-ind and nep-lma
Note: CF EEE IO
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Citations: View citations in EconPapers (3)

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