Corporate social responsibility and disclosure of R&D knowledge

In this paper we analyse whether firms that are concerned with corporate social responsibility (CSR) are willing to disclose their R&D knowledge for free. Assuming strategic R&D with endogenous spillovers in a non-tournament model, Poyago-Theotoky (1999. “A Note on Endogenous Spillovers in a Non-tournament R&D Duopoly.” Review of Industrial Organization 15 (3): 253–262) shows that profit maximising firms do not disclose their information when they act non-cooperatively. We find that firms that are concerned with CSR fully disclose their R&D knowledge when they choose R&D investment levels non-cooperatively. Therefore, CSR is a factor that encourages firms to disclose their R&D knowledge, which speeds up the innovation process. Moreover, the decision by these firms on whether to disclosure R&D knowledge depends on their level of concern. We find that the firms that freely disclose their R&D knowledge are those who care enough about consumers.