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Attracting responsible employees: Green production as labor market screening

Listed author(s):
  • Brekke, Kjell Arne
  • Nyborg, Karine

Corporate social responsibility can improve firms' ability to recruit highly motivated employees. This can secure socially responsible firms' survival even in a highly competitive environment. We show that if both socially responsible (green) and non-responsible (brown) firms exist in equilibrium, workers with high moral motivation, who shirk less than others, will self-select into the green firms. If unobservable effort is sufficiently important for firm productivity, this can drive every brown firm out of business--even in the case where many workers have no moral motivation whatsoever.

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Article provided by Elsevier in its journal Resource and Energy Economics.

Volume (Year): 30 (2008)
Issue (Month): 4 (December)
Pages: 509-526

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Handle: RePEc:eee:resene:v:30:y:2008:i:4:p:509-526
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505569

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  12. Ingela Brundin & Ching-to Albert Ma, 1998. "Moral Hazard, Insurance, and Some Collusion," Papers 0089, Boston University - Industry Studies Programme.
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  16. Geoffrey Heal, 2005. "Corporate Social Responsibility: An Economic and Financial Framework," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 30(3), pages 387-409, July.
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  18. Kjetil Telle & Iulie Aslaksen & Terje Synnestvedt, 2004. ""It pays to be green" - a premature conclusion?," Discussion Papers 394, Statistics Norway, Research Department.
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