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Eco-Firms and the Sequential Adoption of Environmental Corporate Social Responsibility in the Managerial Delegation

Author

Listed:
  • Lee Sang-Ho

    (Department of Economics, Chonnam National University, Gwangju, South Korea)

  • Park Chul-Hi

    (Graduate School of Economics, Chonnam National University, Gwangju, South Korea)

Abstract

This article investigates the strategic environmental corporate social responsibility (ECSR) of polluting firms in the presence of eco-firms. When the firms decide to adopt ECSR sequentially within the framework of the managerial incentive design and then face simultaneous price competition, we show that firms will adopt ECSR and purchase abatement goods to mitigate competition if the products are more substitutable, but the late adopter chooses lower ECSR and thus earns higher profit. It can partially explain the current expansive adoption of ECSR as an industry-wide wave.

Suggested Citation

  • Lee Sang-Ho & Park Chul-Hi, 2019. "Eco-Firms and the Sequential Adoption of Environmental Corporate Social Responsibility in the Managerial Delegation," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 19(1), pages 1-9, January.
    • Handle: RePEc:bpj:bejtec:v:19:y:2019:i:1:p:9:n:10
    DOI: 10.1515/bejte-2017-0043
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    More about this item

    Keywords

    environmental corporate social responsibility; eco-firms; abatement goods; late adopter advantage;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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