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Private versus public companies with strategic CSR

Author

Listed:
  • Alessandro Gioffré

    (University of Rome Tor Vergata)

  • Alessandro Tampieri

    (Goethe University Frankfurt)

  • Antonio Villanacci

    (University of Florence)

Abstract

We analyze the effects of strategic Corporate Social Responsibility (CSR) on social welfare in an industry where firms are owned by consumers (publicly owned) and CSR commitment takes the form of a fraction of the consumer surplus into the firms’ objective function. We compare this market configuration with the standard case of firms owned by entrepreneurs (privately owned). In line with the empirical evidence, consumers’ ownership gives an incentive to adopt a socially responsible, welfare improving statute. While privately-owned companies are limited in the level of social concern to implement, publicly-owned companies are not, and CSR is welfare-improving for any level of social concern. Surprisingly, a market configuration of publicly-owned CSR companies decreases welfare compared to an oligopoly of privately-owned CSR companies. The analysis is then extended by considering asymmetric oligopolies with different company types.

Suggested Citation

  • Alessandro Gioffré & Alessandro Tampieri & Antonio Villanacci, 2021. "Private versus public companies with strategic CSR," Journal of Economics, Springer, vol. 133(2), pages 129-166, July.
    • Handle: RePEc:kap:jeczfn:v:133:y:2021:i:2:d:10.1007_s00712-020-00729-1
    DOI: 10.1007/s00712-020-00729-1
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    References listed on IDEAS

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    More about this item

    Keywords

    CSR; Consumers’ firm ownership; Pareto optimum;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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