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Strategic corporate social responsibility of high-speed rail in China

Author

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  • Xu, Lili
  • Fan, Xinying
  • Luan, Weixin

Abstract

This paper investigates the strategic corporate social responsibility (CSR) of a high-speed rail (HSR) firm when competing with an airline firm in a differentiated transportation market and the interactions with government environmental policies in the context of a Cournot–Bertrand comparison. We find that a standard CSR chosen by the government is lower under Cournot than that under Bertrand when both the marginal cost of HSR and product substitutability are low enough, while a voluntary CSR chosen by the HSR operator is always higher under Cournot than that under Bertrand. We also find that the voluntary CSR could be higher or lower than the standard CSR, depending on marginal costs, product substitutability, and competition modes. We then show that when the government imposes an environmental tax together with CSR activities, both the strategic CSR and environmental tax are always lower under Cournot than those under Bertrand. Finally, we show that equilibrium traffic volumes, ticket fares, consumer welfare, and social welfare are independent of competition modes with environmental tax.

Suggested Citation

  • Xu, Lili & Fan, Xinying & Luan, Weixin, 2020. "Strategic corporate social responsibility of high-speed rail in China," China Economic Review, Elsevier, vol. 62(C).
  • Handle: RePEc:eee:chieco:v:62:y:2020:i:c:s1043951x20300961
    DOI: 10.1016/j.chieco.2020.101499
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    References listed on IDEAS

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    Cited by:

    1. Cho, Sumi & Kim, Doori & Lee, Sang-Ho, 2021. "Free licensing strategy and ex post privatization in a mixed oligopoly," MPRA Paper 106126, University Library of Munich, Germany.

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    More about this item

    Keywords

    Corporate social responsibility; High-speed rail; Voluntary CSR; Environmental tax; Cournot–Bertrand comparison;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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