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The Signaling Role of Corporate Social Responsibility

Author

Listed:
  • Blumkin, Tomer

    (Department of Economics, Ben-Gurion University)

  • Margalioth, Yoram

    (The Buchmann Faculty of Law, Tel-Aviv University)

  • Sharoni, Adi

    (Department of Economics, Ben-Gurion University)

Abstract

We examine the role of CSR as a mechanism for private provision of public goods. We argue that corporations are using CSR to signal high product quality and demonstrate that signaling gives rise to an excessive level of contributions that offsets the positive externality, which causes the under-provision of public goods. We analyze the tax policy implications of such assertion. Accounting for this offset would call for a decrease in (and potentially elimination of) the subsidy offered to corporations engaged in CSR activities.

Suggested Citation

  • Blumkin, Tomer & Margalioth, Yoram & Sharoni, Adi, 2014. "The Signaling Role of Corporate Social Responsibility," Working Paper Series, Center for Fiscal Studies 2014:10, Uppsala University, Department of Economics.
  • Handle: RePEc:hhs:uufswp:2014_010
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Signaling; Corporate Social Responsibility; Public Goods; Pigouvian Taxation *;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • K30 - Law and Economics - - Other Substantive Areas of Law - - - General

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