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Corporate social responsibility, loan commitment, and social welfare in network duopoly

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  • Jine Qian
  • Qiang Gong
  • Leonard F.S. Wang

Abstract

We investigate strategic corporate social responsibility (CSR) in a network duopoly with loan commitments. We find that the optimal rate of a bank loan decreases with an increasing degree of CSR under certain conditions. The firm's strategic behavior in imperfect competition concerning CSR is beneficial to society with the support of financial institution. It is possibly due to the fact that CSR adopted by a firm is used as a strategic commitment device to capture a larger market share coupled with demand‐side network effects. Our results have important implications on financial policies in a network industry.

Suggested Citation

  • 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.
    • Handle: RePEc:wly:mgtdec:v:42:y:2021:i:4:p:952-960
    DOI: 10.1002/mde.3284
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    Cited by:

    1. Ma, Jie & Wang, Leonard F.S. & Sun, Ji, 2022. "Cross Ownership, Loan Commitment, Managerial Delegation and the “Prisoner’s Dilemma”," MPRA Paper 115237, University Library of Munich, Germany, revised 02 Nov 2022.
    2. Xubei Lian & Kai Zhang & Leonard F. S. Wang, 2023. "Managerial delegation, network externalities and loan commitment," Manchester School, University of Manchester, vol. 91(1), pages 37-54, January.

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