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Strategic corporate social responsibility and tariff policies: The timing of commitments and policy implications

Author

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  • Xu, Lili
  • Lee, Sang-Ho

Abstract

This study considers commitments between tariff policy and corporate social responsibility (CSR) activities, and compares both domestic CSR and foreign CSR. We show that the committed tariff yields lower tariff and higher CSR under domestic CSR, resulting in higher welfare and lower profits, while it might be reversed under foreign CSR if the substitutability is low, which results in lower welfare and profits. Finally, the committed tariff is a desirable equilibrium of an endogenous timing game under domestic CSR, whereas the committed CSR can be under foreign CSR if the substitutability is low.

Suggested Citation

  • Xu, Lili & Lee, Sang-Ho, 2021. "Strategic corporate social responsibility and tariff policies: The timing of commitments and policy implications," MPRA Paper 108499, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:108499
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    References listed on IDEAS

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    More about this item

    Keywords

    Strategic CSR; trade policy; committed tariff; committed CSR; international duopoly;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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