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Free Entry with Upstream Corporate Social Responsibility

Author

Listed:
  • Qing Hu

    (Kansai University)

  • Ryo Masuyama

    (Kushiro Public University of Economics and Kobe University)

  • Tomomichi Mizuno

    (Kobe University)

Abstract

This study evaluates the desirability of downstream free entry within vertical relationships. We consider a vertical market consisting of an upstream firm with corporate social responsibility (CSR) and downstream firms with free entry. We find that the desirability of entry depends on the degree of upstream CSR. Specifically, when the degree of upstream CSR is sufficiently high, the downstream market faces excess entry, whereas when the degree is low, it faces insufficient entry. When the upstream firm commits to CSR, it lowers the input price, thereby encouraging downstream entry. This study identifies a new factor that justifies the entry regulation policies.

Suggested Citation

  • Qing Hu & Ryo Masuyama & Tomomichi Mizuno, 2026. "Free Entry with Upstream Corporate Social Responsibility," Discussion Papers 2613, Graduate School of Economics, Kobe University.
    • Handle: RePEc:koe:wpaper:2613
    as

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    File URL: http://www.econ.kobe-u.ac.jp/RePEc/koe/wpaper/2026/2613.pdf
    File Function: First version, 2026
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    References listed on IDEAS

    as
    1. Arijit Mukherjee & Soma Mukherjee, 2008. "Excess‐Entry Theorem: The Implications Of Licensing," Manchester School, University of Manchester, vol. 76(6), pages 675-689, December.
    2. Seung-Leul Kim & Sang-Ho Lee & Toshihiro Matsumura, 2019. "Corporate social responsibility and privatization policy in a mixed oligopoly," Journal of Economics, Springer, vol. 128(1), pages 67-89, September.
    3. Ángel L. López & Xavier Vives, 2019. "Overlapping Ownership, R&D Spillovers, and Antitrust Policy," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 2394-2437.
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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