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What Corporate Social Responsibility Motivations are better for The Environment?

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  • Villena, Mauricio

Abstract

Is it always the case that an environmental friendly CSR firm will be preferred to a consumer caring CSR-firm in terms of the environmental damage generated in the market?. Will always an environmental friendly CSR firm be preferred to a firm which concerns only with profit maximization?. We explore these questions by analizyng a duopoly market setting in which a CSR firm interacts with a profit maximizing firm. Unlike previous literature, we consider different motivations for the CSR firm: (i) the CSR firm acts as a consumer-friendly firm, cares for not only its profits but also consumer surplus, as a proxy of its concern for its "stakeholders" or consumers; (ii) the CSR firm main objective is a combination of its own profit and the environment, caring for the environmental damage produced by the market in which it interacts; and (iii) the CSR firm is both consumer and environmental friendly. As benchmark we also consider the case in which both firms in the duopoly only concern about material profits, evaluating for all cases the environmental damage generated in their market interaction.

Suggested Citation

  • Villena, Mauricio, 2019. "What Corporate Social Responsibility Motivations are better for The Environment?," MPRA Paper 100267, University Library of Munich, Germany, revised 01 May 2020.
    • Handle: RePEc:pra:mprapa:100267
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    References listed on IDEAS

    as
    1. Liu, Chih-Chen & Wang, Leonard F.S. & Lee, Sang-Ho, 2015. "Strategic environmental corporate social responsibility in a differentiated duopoly market," Economics Letters, Elsevier, vol. 129(C), pages 108-111.
    2. Liu, Qian & Wang, Leonard F.S. & Chen, Charlie L., 2018. "CSR in an oligopoly with foreign competition: Policy and welfare implications," Economic Modelling, Elsevier, vol. 72(C), pages 1-7.
    3. Kopel, Michael & Brand, Björn, 2012. "Socially responsible firms and endogenous choice of strategic incentives," Economic Modelling, Elsevier, vol. 29(3), pages 982-989.
    4. Gregory E. Goering, 2014. "The Profit‐Maximizing Case for Corporate Social Responsibility in a Bilateral Monopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 35(7), pages 493-499, October.
    5. García, Arturo & Leal, Mariel & Lee, Sang-Ho, 2018. "Time-inconsistent environmental policies with a consumer-friendly firm: Tradable permits versus emission tax," International Review of Economics & Finance, Elsevier, vol. 58(C), pages 523-537.
    6. repec:wly:soecon:v:81:2:y:2014:p:457-473 is not listed on IDEAS
    7. Björn Brand & Michael Grothe, 2015. "Social responsibility in a bilateral monopoly," Journal of Economics, Springer, vol. 115(3), pages 275-289, July.
    8. Leonard F. S. Wang & Ya‐Chin Wang & Lihong Zhao, 2012. "Tariff Policy And Welfare In An International Duopoly With Consumer‐Friendly Initiative," Bulletin of Economic Research, Wiley Blackwell, vol. 64(1), pages 56-64, January.
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    10. Leal, Mariel & Garcia, Arturo & Lee, Sang-Ho, 2018. "The Timing Of Environmental Tax Policy With A Consumer-Friendly Firm," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 59(1), pages 25-43, June.
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    Cited by:

    1. Villena, Mauricio, 2019. "Corporate Social Responsibility and Optimal Pigouvian Taxation," MPRA Paper 100035, University Library of Munich, Germany.

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    More about this item

    Keywords

    Corporate social responsibility; consumer-friendly firm; environment-friendly firm; Mixed Duopoly; Emission Taxation;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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