Merger incentive and strategic CSR by a multiproduct corporation

Arturo Garcia, Mariel Leal and Sang-Ho Lee

MPRA Paper from University Library of Munich, Germany

Abstract: This study investigates an interplay between strategic CSR (corporate social responsibility) by a multiproduct corporation and merger decisions by rival firms each having single plant. We examine and compare two different timings of choosing CSR, i.e., ”merge-then-CSR” and ”CSR-then-merge” games. In the former case, we show that the level of CSR increases in products substitutability, but its level under merger is lower than that without merger. In the latter case where a multiproduct corporation can commit to a higher level of CSR before rival firms’ mergers, however, the level of CSR decreases in products substitutability and it might increase not only consumer surplus but social welfare.

Keywords: multiproduct corporation; strategic CSR; timing of commitment; products substitutability; merger decision (search for similar items in EconPapers)
JEL-codes: L2 L4 (search for similar items in EconPapers)
Date: 2020-02
New Economics Papers: this item is included in nep-com, nep-ind and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:98830

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