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Does a multi-product firm adopt environmental corporate social responsibility voluntarily?

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  • Chia-Chi Wang

Abstract

This paper considers a vertically related market to analyse the effect of implementing environmental corporate social responsibility (ECSR) for a multi-product firm. A downstream multi-product firm that implements ECSR needs to buy a key component from an upstream monopolist. We present some interesting results. First, the effect of implementing ECSR on a firm’s profit is ambiguous. Adopting ECSR may increase the multi-product firm’s profit if the production causes mild environmental damage. In other words, a multi-product firm may benefit from implementing ECSR. Second, a multi-product firm implementing ECSR may alleviate the problem of double marginalization. Third, implementing ECSR may even bring about a triple-win (win-win-win) situation where the multi-product firm is able to simultaneously improve its total profit, environmental quality, and social welfare.

Suggested Citation

  • Chia-Chi Wang, 2022. "Does a multi-product firm adopt environmental corporate social responsibility voluntarily?," Applied Economics, Taylor & Francis Journals, vol. 54(59), pages 6797-6808, December.
    • Handle: RePEc:taf:applec:v:54:y:2022:i:59:p:6797-6808
    DOI: 10.1080/00036846.2022.2083766
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