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Network externalities and corporate social responsibility

Author

Listed:
  • Luciano Fanti

    (Department of Economics and Management, University of Pisa)

  • Domenico Buccella

    (Department of Economics, Kozminski University)

Abstract

This paper examines a duopoly market with Corporate Social Responsibility (CSR) firms (sensitive to consumer surplus). It is shown that, in contrast to the conventional result that the higher the weight on CSR the lower the firms' profitability, when network externalities in consumption are present even the firms' profitability may be enhanced by the presence of social concerns. This finding opens a new view of CSR rules by the most worldwide engaged in social activities firms that operate in the more and more increasing sectors of network goods.

Suggested Citation

  • Luciano Fanti & Domenico Buccella, 2016. "Network externalities and corporate social responsibility," Economics Bulletin, AccessEcon, vol. 36(4), pages 2043-2050.
    • Handle: RePEc:ebl:ecbull:eb-16-00246
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    References listed on IDEAS

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    4. Luciano Fanti & Domenico Buccella, 2016. "Bargaining Agenda and Entry in a Unionised Model with Network Effects," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 2(1), pages 91-121, March.
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    6. David P. Baron, 2001. "Private Politics, Corporate Social Responsibility, and Integrated Strategy," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(1), pages 7-45, March.
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    Citations

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    Cited by:

    1. Arturo Garcia & Mariel Leal & Sang-Ho Lee, 2018. "Social responsibility in a bilateral monopoly with R&D," Economics Bulletin, AccessEcon, vol. 38(3), pages 1467-1475.
    2. Chokri Aloui & Khaïreddine Jebsi, 2022. "Does corporate social responsibility solve the chicken‐and‐egg problem for a two‐sided platform?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(7), pages 3235-3256, October.
    3. Buccella Domenico & Fanti Luciano & Gori Luca, 2024. "Product Quality and Product Compatibility in Network Industries," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 24(1), pages 299-339, January.
    4. Ohnishi, Kazuhiro, 2023. "Why firms should care for consumers: Complementary goods," MPRA Paper 117305, University Library of Munich, Germany.
    5. Lisa Planer-Friedrich & Marco Sahm, 2018. "Why Firms Should Care for All Consumers," Economics Bulletin, AccessEcon, vol. 38(3), pages 1603-1612.
    6. Jine Qian & Qiang Gong & Leonard F.S. Wang, 2021. "Corporate social responsibility, loan commitment, and social welfare in network duopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(4), pages 952-960, June.
    7. Mariel Leal & Arturo García & Sang-Ho Lee, 2021. "Sequencing R&D decisions with a consumer-friendly firm and spillovers," The Japanese Economic Review, Springer, vol. 72(2), pages 243-260, April.
    8. Garcia, Arturo & Leal, Mariel & Lee, Sang-Ho, 2020. "Merger incentive and strategic CSR by a multiproduct corporation," MPRA Paper 98830, University Library of Munich, Germany.

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    More about this item

    Keywords

    CSR; network effects; duopoly.;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration

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