A micro-economic model of corporate social responsibility

Abstract

This paper explores the economic mechanisms behind corporate social responsibility (CSR) in a microeconomic model of the firm. The study's motivation is to shed light on the potential causes of the observed phenomena of voluntary over-compliance among firms. We investigate how assumptions about costs and benefits affect CSR behavior through a stock of goodwill capital. In optimum, the firm must balance marginal costs and benefits of investing in CSR. We characterize the equilibrium and examine comparative statics and dynamics from a parameterized model. Finally, we link some of the model's results to the empirical literature on CSR.

Published in

Metroeconomica
2011, volume: 62, number: 1, pages: 69-95

SLU Authors

• Lundgren, Tommy

  • Umeå University

UKÄ Subject classification

Economics and Business
Social Sciences
Environmental Sciences related to Agriculture and Land-use

Publication identifier

• DOI: https://doi.org/10.1111/j.1467-999X.2010.04087.x

Permanent link to this page (URI)

https://res.slu.se/id/publ/32859