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Strategic Corporate Social Responsibility by a Multinational Firm and International Privatization Policies

Lili Xu () and Sang-Ho Lee ()

MPRA Paper from University Library of Munich, Germany

Abstract: We consider a multinational global firm that adopts corporate social responsibility (CSR) in two countries and examine international privatization policies with the strategic transmission of CSR. We find that the strategic level of CSR crucially depends on the percentage of the global firm’s shares held in each country. We show that single privatization increases (decreases) CSR when the share is small (large), while dual privatization always leads to the highest CSR. We also show that domestic welfare under global standard of CSR, which is set to improve global welfare, is higher (lower) than that under the global firm’s strategic CSR when the share is small (large). Finally, we show that dual nationalization is a unique equilibrium in an international privatization choice game, irrespective of imposing the global standard of CSR, which causes global welfare loss.

Keywords: global firm; strategic CSR; global standards of CSR; international privatization policy (search for similar items in EconPapers)
JEL-codes: D43 L13 L33 (search for similar items in EconPapers)
Date: 2021-01
New Economics Papers: this item is included in nep-int
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