Strategic corporate social responsibility and tariff policies: The timing of commitments and policy implications

Lili Xu () and Sang-Ho Lee

MPRA Paper from University Library of Munich, Germany

Abstract: This study considers commitments between tariff policy and corporate social responsibility (CSR) activities, and compares both domestic CSR and foreign CSR. We show that the committed tariff yields lower tariff and higher CSR under domestic CSR, resulting in higher welfare and lower profits, while it might be reversed under foreign CSR if the substitutability is low, which results in lower welfare and profits. Finally, the committed tariff is a desirable equilibrium of an endogenous timing game under domestic CSR, whereas the committed CSR can be under foreign CSR if the substitutability is low.

Keywords: Strategic CSR, trade policy; committed tariff, committed CSR; international duopoly (search for similar items in EconPapers)
JEL-codes: H21 L13 M14 O24 (search for similar items in EconPapers)
Date: 2021-06
New Economics Papers: this item is included in nep-int
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