Abstract
ABSTRACTWe propose a theory of strategic corporate social responsibility (CSR). Value‐maximizing shareholders play an industry CSR game where they can opt for an objective function that extends beyond shareholder value, thus conditioning other strategic firm decisions. The theory provides a formalization of the “doing well by doing good” adage in an industry setting. We develop conditions such that the CSR game is a pure coordination game, which provides a natural and novel theory of strategic leadership in CSR: By committing to a CSR objective function, a first mover leads the industry to a Pareto superior equilibrium. The theory can rationalize recent evidence on correlated industry‐wide CSR adoption, and carries implications for competition policy.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
