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Regulation, Corporate Social Responsibility and Activism

Author

Listed:
  • Aleix Calveras
  • Juan-JosÉ Ganuza
  • Gerard Llobet

Abstract

"This paper analyzes the interplay between firms' self-regulation (often denoted as corporate social responsibility) as opposed to the formal regulation of a negative externality. Firms respond to increasing activism in the market (conscious consumers that take into account the external effects of their purchase) by providing more socially responsible goods. However, because regulation is the outcome of a political process, an increase in activism might imply an inefficiently high externality level. This may happen when a majority of non-activist consumers collectively free-ride on conscious consumers. By determining a softer than optimal regulation, they benefit from the behavior of firms, yet they have access to cheaper (although less efficient) goods". Copyright 2007, The Author(s) Journal Compilation (c) 2007 Blackwell Publishing.

Suggested Citation

  • Aleix Calveras & Juan-JosÉ Ganuza & Gerard Llobet, 2007. "Regulation, Corporate Social Responsibility and Activism," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(3), pages 719-740, September.
  • Handle: RePEc:bla:jemstr:v:16:y:2007:i:3:p:719-740
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    Citations

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    Cited by:

    1. Michał Jurek, 2014. "The genesis and evolution of CSR self-regulation with special refer-ence to the case of financial institutions," Working papers wpaper70, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    2. repec:spr:epolit:v:34:y:2017:i:3:d:10.1007_s40888-016-0051-1 is not listed on IDEAS
    3. Constantine Manasakis & Evangelos Mitrokostas & Emmanuel Petrakis, 2007. "Corporate Social Responsibility in Oligopoly," Working Papers 0707, University of Crete, Department of Economics.
    4. Timothy Besley & Maitreesh Ghatak, 2005. "Competition and Incentives with Motivated Agents," American Economic Review, American Economic Association, vol. 95(3), pages 616-636, June.
    5. Baron, David P., 2011. "Credence attributes, voluntary organizations, and social pressure," Journal of Public Economics, Elsevier, vol. 95(11), pages 1331-1338.
    6. Doni, Nicola & Ricchiuti, Giorgio, 2013. "Market equilibrium in the presence of green consumers and responsible firms: A comparative statics analysis," Resource and Energy Economics, Elsevier, vol. 35(3), pages 380-395.
    7. Ni, Debing & Li, Kevin W. & Tang, Xiaowo, 2010. "Social responsibility allocation in two-echelon supply chains: Insights from wholesale price contracts," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1269-1279, December.
    8. 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.
    9. Reif, Christiane & Rexhäuser, Sascha, 2015. "Good enough! Are socially responsible companies the more successful environmental innovators?," ZEW Discussion Papers 15-018, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    10. Aleix Calveras & Juan-José Ganuza & Gerard Llobet, 2011. "Voluntary contributions “vote out” public ones," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 2(3), pages 283-303, September.
    11. Ana I. Balsa & Michael T. French & Tracy L. Regan, 2012. "Relative Deprivation and Risky Behaviors," Documentos de Trabajo/Working Papers 1203, Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo..
    12. Alberto Galasso & Mihkel Tombak, 2014. "Switching to Green: The Timing of Socially Responsible Innovation," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(3), pages 669-691, September.
    13. Yang-Ming Chang & Hung-Yi Chen & Leonard F. S. Wang & Shih-Jye Wu, 2014. "Corporate Social Responsibility and International Competition: A Welfare Analysis," Review of International Economics, Wiley Blackwell, vol. 22(3), pages 625-638, August.
    14. Evangelos Mitrokostas & Emmanuel Petrakis, 2008. "Private CSR Activities in Oligopolistic Markets: Is There Any Room for Regulation?," Working Papers 0816, University of Crete, Department of Economics.
    15. Markus Kitzmueller & Jay Shimshack, 2012. "Economic Perspectives on Corporate Social Responsibility," Journal of Economic Literature, American Economic Association, vol. 50(1), pages 51-84, March.
    16. Degli Antoni, Giacomo & Sacconi, Lorenzo, 2013. "Social responsibility, activism and boycotting in a firm–stakeholders network of games with players’ conformist preferences," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 216-226.
    17. Vasileiou, Efi & Georgantzís, Nikolaos, 2015. "An experiment on energy-saving competition with socially responsible consumers: Opening the black box," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 58(C), pages 1-10.
    18. Markus Kitzmueller, 2008. "Economics and Corporate Social Responsibility," Economics Working Papers ECO2008/37, European University Institute.

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