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Regulation, Corporate Social Responsibility and Activism

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Author Info
Aleix Calveras
Juan-JosÉ Ganuza
Gerard Llobet

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Abstract

"This paper analyzes the interplay between firms' self-regulation (often denoted as corporate social responsibility) as opposed to the formal regulation of a negative externality. Firms respond to increasing activism in the market (conscious consumers that take into account the external effects of their purchase) by providing more socially responsible goods. However, because regulation is the outcome of a political process, an increase in activism might imply an inefficiently high externality level. This may happen when a majority of non-activist consumers collectively free-ride on conscious consumers. By determining a softer than optimal regulation, they benefit from the behavior of firms, yet they have access to cheaper (although less efficient) goods". Copyright 2007, The Author(s) Journal Compilation (c) 2007 Blackwell Publishing.

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Publisher Info
Article provided by Blackwell Publishing in its journal Journal of Economics & Management Strategy.

Volume (Year): 16 (2007)
Issue (Month): 3 (09)
Pages: 719-740
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Handle: RePEc:bla:jemstr:v:16:y:2007:i:3:p:719-740

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  1. Constantine Manasakis & Evangelos Mitrokostas & Emmanuel Petrakis, 2006. "Corporate Social Responsibility in Oligopoly," Working Papers 0707, University of Crete, Department of Economics, revised 15 Jan 2007. [Downloadable!]
  2. Evangelos Mitrokostas & Emmanuel Petrakis, 2008. "Private CSR Activities in Oligopolistic Markets: Is there any room for Regulation?," Working Papers 0816, University of Crete, Department of Economics. [Downloadable!]
  3. Markus Kitzmueller, 2008. "Economics and Corporate Social Responsibility," Economics Working Papers ECO2008/37, European University Institute. [Downloadable!]
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This page was last updated on 2009-11-22.


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