IDEAS home Printed from https://ideas.repec.org/a/bla/ausecp/v57y2018i3p327-345.html
   My bibliography  Save this article

Duopoly Competition with Corporate Social Responsibility

Author

Listed:
  • Chan Wang
  • Pu‐yan Nie
  • Yan Meng

Abstract

This paper highlights the effect of firms’ position on firms’ strategies with corporate social responsibility (CSR) practices under three different cases: Cournot competition; Stackelberg competition with the CSR firm taking the leader position and turnover, with the profit maximising (PM) firm playing as the leader. Some interesting conclusions are achieved. First, the CSR firm always produces more than the PM firm. Second, the outputs of both firms (the consumer surplus) under the PM firm's leading position are larger than those under Cournot. Third, the profits of both firms (producer surplus) under the PM firm playing the leading position are less than those under Cournot. Surprisingly, when the PM firm first moves, the PM firm's profits are the lowest while the CSR firm's outputs are the highest in all three cases. Finally, the relationship of social welfare under the three cases is ambiguous.

Suggested Citation

  • Chan Wang & Pu‐yan Nie & Yan Meng, 2018. "Duopoly Competition with Corporate Social Responsibility," Australian Economic Papers, Wiley Blackwell, vol. 57(3), pages 327-345, September.
    • Handle: RePEc:bla:ausecp:v:57:y:2018:i:3:p:327-345
    DOI: 10.1111/1467-8454.12119
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1467-8454.12119
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1467-8454.12119?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Font, Xavier & Guix, Mireia & Bonilla-Priego, Ma Jesús, 2016. "Corporate social responsibility in cruising: Using materiality analysis to create shared value," Tourism Management, Elsevier, vol. 53(C), pages 175-186.
    2. Besley, Timothy & Ghatak, Maitreesh, 2007. "Retailing public goods: The economics of corporate social responsibility," Journal of Public Economics, Elsevier, vol. 91(9), pages 1645-1663, September.
    3. Roland Bénabou & Jean Tirole, 2010. "Individual and Corporate Social Responsibility," Economica, London School of Economics and Political Science, vol. 77(305), pages 1-19, January.
    4. Goering, Gregory E., 2008. "Welfare impacts of a non-profit firm in mixed commercial markets," Economic Systems, Elsevier, vol. 32(4), pages 326-334, December.
    5. repec:wly:soecon:v:83:1:y:2016:p:236-252 is not listed on IDEAS
    6. Craig Deegan & Marita Shelly, 2014. "Corporate Social Responsibilities: Alternative Perspectives About the Need to Legislate," Journal of Business Ethics, Springer, vol. 121(4), pages 499-526, June.
    7. Nie, Pu-yan & Wang, Chan & Chen, Zi-yue & Chen, You-hua, 2018. "A theoretic analysis of key person insurance," Economic Modelling, Elsevier, vol. 71(C), pages 272-278.
    8. Jan Tullberg, 2014. "Corporate Responsibility and the Collegial Field," American Journal of Economics and Sociology, Wiley Blackwell, vol. 73(1), pages 84-107, January.
    9. Adam Lindgreen & José-Rodrigo Córdoba, 2010. "Editorial: Corporate Social Responsibility in Latin America," Journal of Business Ethics, Springer, vol. 91(2), pages 167-170, February.
    10. Laura T. Starks, 2009. "EFA Keynote Speech: “Corporate Governance and Corporate Social Responsibility: What Do Investors Care about? What Should Investors Care about?”," The Financial Review, Eastern Finance Association, vol. 44(4), pages 461-468, November.
    11. Caroline Flammer, 2015. "Does Corporate Social Responsibility Lead to Superior Financial Performance? A Regression Discontinuity Approach," Management Science, INFORMS, vol. 61(11), pages 2549-2568, November.
    12. Kopel, Michael & Brand, Björn, 2012. "Socially responsible firms and endogenous choice of strategic incentives," Economic Modelling, Elsevier, vol. 29(3), pages 982-989.
    13. Daniel Fernández‐Kranz & Juan Santaló, 2010. "When Necessity Becomes a Virtue: The Effect of Product Market Competition on Corporate Social Responsibility," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(2), pages 453-487, June.
    14. Shaomin Li & Marc Fetscherin & Ilan Alon & Christoph Lattemann & Kuang Yeh, 2010. "Corporate Social Responsibility in Emerging Markets," Management International Review, Springer, vol. 50(5), pages 635-654, October.
    15. Pu-yan Nie, 2012. "A monopoly with pollution emissions," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 55(6), pages 705-711, September.
    16. Abagail McWilliams & Donald S. Siegel & Patrick M. Wright, 2006. "Corporate Social Responsibility: Strategic Implications," Journal of Management Studies, Wiley Blackwell, vol. 43(1), pages 1-18, January.
    17. Baron, David P., 2008. "Managerial contracting and corporate social responsibility," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 268-288, February.
    18. Nie, Pu-yan & Chen, You-hua, 2012. "Duopoly competitions with capacity constrained input," Economic Modelling, Elsevier, vol. 29(5), pages 1715-1721.
    19. Gregory E. Goering, 2010. "Corporate social responsibility, durable-goods and firm profitability," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 31(7), pages 489-496.
    20. Stephen Brammer & Andrew Millington, 2008. "Does it pay to be different? An analysis of the relationship between corporate social and financial performance," Strategic Management Journal, Wiley Blackwell, vol. 29(12), pages 1325-1343, December.
    21. You-Hua Chen & Xiao-Wei Wen & Ming-Zhong Luo, 2016. "Corporate Social Responsibility Spillover and Competition Effects on the Food Industry," Australian Economic Papers, Wiley Blackwell, vol. 55(1), pages 1-13, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sumi Cho & Sang‐Ho Lee & Xoan T. Hoang, 2019. "Corporate social responsibility and strategic trade policy: An endogenous timing game and its policy implications," Australian Economic Papers, Wiley Blackwell, vol. 58(4), pages 480-497, December.
    2. Chan Wang & Pu‐yan Nie, 2020. "Retail competition using free shopping shuttle bus strategies," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(6), pages 1010-1019, September.
    3. Yang, Dong-xiao & Chen, Zi-yue & Yang, Yong-cong & Nie, Pu-yan, 2019. "Green financial policies and capital flows," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 522(C), pages 135-146.
    4. Wang, Kun Tracy & Wu, Yue & Ho, Kin-Yip, 2021. "Internal control reporting and cost of bond financing: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 1323-1346.
    5. Xu, Lili & Lee, Sang-Ho, 2021. "Strategic Corporate Social Responsibility by a Multinational Firm and International Privatization Policies," MPRA Paper 105651, University Library of Munich, Germany.
    6. Zhang, Qidi & Wang, Leonard F.S., 2022. "Corporate social responsibility, entry and optimal privatization in an international mixed market," International Review of Economics & Finance, Elsevier, vol. 77(C), pages 14-24.
    7. Arturo Garcia & Mariel Leal & Sang‐Ho Lee, 2020. "Cooperation with a multiproduct corporation in a strategic managerial delegation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(1), pages 3-9, January.
    8. Hsu, Bo-Xiang & Chen, Yi-Min, 2023. "The relationship between corporate social responsibility, external orientation, and environmental performance," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    9. Wen, Jun & Diao, Yu & Wang, Leonard F. S. & Sun, Ji, 2022. "Privatization, entry and corporate social responsibility with consumer cognition," MPRA Paper 115169, University Library of Munich, Germany.
    10. Ding Chen & Leonard F. S. Wang & Ji Sun, 2023. "Does CSR influence privatization wave?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 1088-1097, March.
    11. Junlong Chen & Chaoqun Sun & Jiali Liu & Yan Huo, 2021. "The optimal level of corporate social responsibility based on the duopoly model," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(1), pages 177-184, January.
    12. Bin Ying & Leonard F. S. Wang & Qidi Zhang, 2023. "Upstream collusion and corporate social responsibility in downstream competition," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 1020-1028, March.
    13. Junlong Chen & Chaoqun Sun & Jiali Liu, 2022. "Corporate social responsibility, consumer sensitivity, and overcapacity," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(2), pages 544-554, March.
    14. Michael Kopel, 2021. "CSR leadership, spillovers, and first-mover advantage," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 44(2), pages 489-505, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kopel, Michael & Brand, Björn, 2012. "Socially responsible firms and endogenous choice of strategic incentives," Economic Modelling, Elsevier, vol. 29(3), pages 982-989.
    2. You-Hua Chen & Xiao-Wei Wen & Ming-Zhong Luo, 2016. "Corporate Social Responsibility Spillover and Competition Effects on the Food Industry," Australian Economic Papers, Wiley Blackwell, vol. 55(1), pages 1-13, March.
    3. Michael Kopel, 2021. "CSR leadership, spillovers, and first-mover advantage," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 44(2), pages 489-505, December.
    4. Lisa Planer-Friedrich & Marco Sahm, 2017. "Strategic Corporate Social Responsibility," CESifo Working Paper Series 6506, CESifo.
    5. Mauricio G. Villena & María José Quinteros, 2024. "Corporate Social Responsibility, Environmental Emissions and Time-Consistent Taxation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(1), pages 219-255, January.
    6. Planer-Friedrich, Lisa & Sahm, Marco, 2017. "Strategic corporate social responsibility," BERG Working Paper Series 124, Bamberg University, Bamberg Economic Research Group.
    7. Mark Bagnoli & Susan G. Watts, 2020. "On the corporate use of green bonds," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(1), pages 187-209, January.
    8. Lisa Planer-Friedrich & Marco Sahm, 2020. "Strategic corporate social responsibility, imperfect competition, and market concentration," Journal of Economics, Springer, vol. 129(1), pages 79-101, January.
    9. Leong, Chee Kian & Yang, Yung Chiang, 2020. "Market competition and firms' social performance," Economic Modelling, Elsevier, vol. 91(C), pages 601-612.
    10. Luciano Fanti & Domenico Buccella, 2017. "Corporate social responsibility in a game-theoretic context," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 44(3), pages 371-390, September.
    11. Gillan, Stuart L. & Koch, Andrew & Starks, Laura T., 2021. "Firms and social responsibility: A review of ESG and CSR research in corporate finance," Journal of Corporate Finance, Elsevier, vol. 66(C).
    12. Ohnishi, Kazuhiro, 2023. "Why firms should care for consumers: Complementary goods," MPRA Paper 117305, University Library of Munich, Germany.
    13. Lambertini, Luca & Tampieri, Alessandro, 2015. "Incentives, performance and desirability of socially responsible firms in a Cournot oligopoly," Economic Modelling, Elsevier, vol. 50(C), pages 40-48.
    14. Nozimakhon Kodirjonova & Jong Dae Kim, 2023. "Examining the Link between CSRD and FP in Korean Companies: The Moderating Effect of Company Reputation," Sustainability, MDPI, vol. 15(8), pages 1-11, April.
    15. You-Hua CHEN & Pu-Yan NIE & Yong-Cong YANG, 2017. "Effects of corporate social responsibility on food safety," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 63(12), pages 539-547.
    16. Xie, Yibo & Ma, Wenbin & Ma, Yichuan & Ren, Zhouqi & Tong, Zelin & Wang, Yihuan, 2023. "A counterfactual thinking perspective of moral licensing effect in machine-driven communication: An example of natural language processing chatbot developed based on WeChat API," Technological Forecasting and Social Change, Elsevier, vol. 197(C).
    17. Luciano Fanti & Domenico Buccella, 2020. "Strategic trade policy with socially concerned firms," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 67(3), pages 269-292, September.
    18. Jae-Joon Han & Hyun Jeong Kim & Jeongmin Yu, 2016. "Empirical study on relationship between corporate social responsibility and financial performance in Korea," Asian Journal of Sustainability and Social Responsibility, Springer, vol. 1(1), pages 61-76, December.
    19. Gerda Barauskaite & Dalia Streimikiene, 2021. "Corporate social responsibility and financial performance of companies: The puzzle of concepts, definitions and assessment methods," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(1), pages 278-287, January.
    20. Banerjee, Shantanu & Homroy, Swarnodeep & Slechten, Aurélie, 2022. "Stakeholder preference and strategic corporate social responsibility," Journal of Corporate Finance, Elsevier, vol. 77(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ausecp:v:57:y:2018:i:3:p:327-345. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0004-900X .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.