IDEAS home Printed from https://ideas.repec.org/a/ucp/ipolec/doi10.1086-694408.html
   My bibliography  Save this article

What Is the Business of Business?

Author

Listed:
  • Andreas Nilsson
  • David T. Robinson

Abstract

This paper develops a simple framework for understanding the emergence of new organizational forms, such as socially responsible firms and social entrepreneurs, that embody the private sector's efforts to resolve problems that typically have been within the purview of government and traditional public charities. We consider organizations that can generate both financial and social returns. Differences in the technologies between the for-profit sector and the social sector give rise to comparative advantages and play a key part in the analysis. This allows us to analyze the conditions under which hybrid organizations emerge in place of traditional charities and profit-maximizers.

Suggested Citation

  • Andreas Nilsson & David T. Robinson, 2018. "What Is the Business of Business?," Innovation Policy and the Economy, University of Chicago Press, vol. 18(1), pages 79-106.
    • Handle: RePEc:ucp:ipolec:doi:10.1086/694408
    DOI: 10.1086/694408
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/694408
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: http://dx.doi.org/10.1086/694408
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/694408?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Besley, Timothy & Ghatak, Maitreesh, 2007. "Retailing public goods: The economics of corporate social responsibility," Journal of Public Economics, Elsevier, vol. 91(9), pages 1645-1663, September.
    2. Roland Bénabou & Jean Tirole, 2010. "Individual and Corporate Social Responsibility," Economica, London School of Economics and Political Science, vol. 77(305), pages 1-19, January.
    3. Graff Zivin Joshua & Small Arthur, 2005. "A Modigliani-Miller Theory of Altruistic Corporate Social Responsibility," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-21, May.
    4. Nicholas Bloom & Christos Genakos & Ralf Martin & Raffaella Sadun, 2010. "Modern Management: Good for the Environment or Just Hot Air?," Economic Journal, Royal Economic Society, vol. 120(544), pages 551-572, May.
    5. Karine Nyborg & Tao Zhang, 2013. "Is Corporate Social Responsibility Associated with Lower Wages?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(1), pages 107-117, May.
    6. David P. Baron, 2007. "Corporate Social Responsibility and Social Entrepreneurship," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(3), pages 683-717, September.
    7. Matthew J. Kotchen, 2006. "Green Markets and Private Provision of Public Goods," Journal of Political Economy, University of Chicago Press, vol. 114(4), pages 816-845, August.
    8. Vanessa C. Burbano, 2016. "Social Responsibility Messages and Worker Wage Requirements: Field Experimental Evidence from Online Labor Marketplaces," Organization Science, INFORMS, vol. 27(4), pages 1010-1028, August.
    9. Nick Bloom & Christos Genakos & Ralf Martin & Raffaella Sadun, 2010. "In brief: Modern Management: Good for the environment or just hot air?," CentrePiece - The magazine for economic performance 303, Centre for Economic Performance, LSE.
    10. Dylan Minor, 2015. "The Value of Corporate Citizenship: Protection," Harvard Business School Working Papers 16-021, Harvard Business School.
    11. Hong, Harrison & Kacperczyk, Marcin, 2009. "The price of sin: The effects of social norms on markets," Journal of Financial Economics, Elsevier, vol. 93(1), pages 15-36, July.
    12. Stephen Vertigans & Samuel O. Idowu (ed.), 2017. "Corporate Social Responsibility," CSR, Sustainability, Ethics & Governance, Springer, number 978-3-319-35083-7, October.
    13. Paul C. Godfrey & Craig B. Merrill & Jared M. Hansen, 2009. "The relationship between corporate social responsibility and shareholder value: an empirical test of the risk management hypothesis," Strategic Management Journal, Wiley Blackwell, vol. 30(4), pages 425-445, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jean-Etienne de Bettignies & David T. Robinson, 2018. "When Is Social Responsibility Socially Desirable?," Journal of Labor Economics, University of Chicago Press, vol. 36(4), pages 1023-1072.
    2. Rodney Schmidt, 2023. "Are Business Ethics Effective? A Market Failures Approach to Impact Investing," Journal of Business Ethics, Springer, vol. 184(2), pages 505-524, May.
    3. Jintao Lu & Mengshang Liang & Chong Zhang & Dan Rong & Hailing Guan & Kristina Mazeikaite & Justas Streimikis, 2021. "Assessment of corporate social responsibility by addressing sustainable development goals," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(2), pages 686-703, March.
    4. Matthew Lee & Arzi Adbi & Jasjit Singh, 2020. "Categorical cognition and outcome efficiency in impact investing decisions," Strategic Management Journal, Wiley Blackwell, vol. 41(1), pages 86-107, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jean-Etienne de Bettignies & David T. Robinson, 2018. "When Is Social Responsibility Socially Desirable?," Journal of Labor Economics, University of Chicago Press, vol. 36(4), pages 1023-1072.
    2. Hart, Oliver D. & Zingales, Luigi, 2017. "Companies Should Maximize Shareholder Welfare Not Market Value," Working Papers 267, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    3. Christian Dienes, 2015. "Energy and Material Efficiency Improvements, Compliance Strategies, and Investments in Resource Efficiency: A Cross-Country Study," Schumpeter Discussion Papers SDP15004, Universitätsbibliothek Wuppertal, University Library.
    4. Patricia Crifo & Vanina Forget, 2013. "La responsabilité sociale et environnementale des entreprises : mirage ou virage ?," Working Papers hal-00830642, HAL.
    5. Hart, Oliver & Zingales, Luigi, 2017. "Companies Should Maximize Shareholder Welfare Not Market Value," Journal of Law, Finance, and Accounting, now publishers, vol. 2(2), pages 247-275, November.
    6. John Morgan & Justin Tumlinson, 2019. "Corporate Provision of Public Goods," Management Science, INFORMS, vol. 65(10), pages 4489-4504, October.
    7. Barigozzi, Francesca & Burani, Nadia, 2019. "Competition for talent when firms' mission matters," Games and Economic Behavior, Elsevier, vol. 116(C), pages 128-151.
    8. Christian Gollier & Sébastien Pouget, 2022. "Investment Strategies and Corporate Behaviour with Socially Responsible Investors: A Theory of Active Ownership," Economica, London School of Economics and Political Science, vol. 89(356), pages 997-1023, October.
    9. Mark Bagnoli & Susan G. Watts, 2020. "On the corporate use of green bonds," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(1), pages 187-209, January.
    10. van't Veld, Klaas & Kotchen, Matthew J., 2011. "Green clubs," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 309-322.
    11. Patricia Crifo & Vanina Forget, 2012. "The Economics of Corporate Social Responsibility: A Survey," Working Papers hal-00720640, HAL.
    12. Baron, David P. & Harjoto, Maretno A. & Jo, Hoje, 2009. "The Economics and Politics of Corporate Social Performance," Research Papers 1993r, Stanford University, Graduate School of Business.
    13. Hannes Koppel & Tobias Regner, 2014. "Corporate Social Responsibility in the work place," Experimental Economics, Springer;Economic Science Association, vol. 17(3), pages 347-370, September.
    14. Shachi Rai & Sangeeta Bansal, 2015. "Factors Explaining Corporate Social Responsibility Expenditure in India," Review of Market Integration, India Development Foundation, vol. 7(1), pages 37-61, April.
    15. Baron, David P. & Harjoto, Maretno A. & Jo, Hoje, 2008. "The Economics and Politics of Corporate Social Performance," Research Papers 1993, Stanford University, Graduate School of Business.
    16. Maarten Pieter Schinkel & Leonard Treuren, 2021. "Corporate Social Responsibility by Joint Agreement," Tinbergen Institute Discussion Papers 21-063/VII, Tinbergen Institute.
    17. Markus Kitzmueller & Jay Shimshack, 2012. "Economic Perspectives on Corporate Social Responsibility," Journal of Economic Literature, American Economic Association, vol. 50(1), pages 51-84, March.
    18. Aseem Kaul & Jiao Luo, 2018. "An economic case for CSR: The comparative efficiency of for‐profit firms in meeting consumer demand for social goods," Strategic Management Journal, Wiley Blackwell, vol. 39(6), pages 1650-1677, June.
    19. Massimiliano Mazzanti & Valeria Costantini & Susanna Mancinelli & Massimilano Corradini, 2011. "Environmental and Innovation Performance in a Dynamic Impure Public Good Framework," Working Papers 201117, University of Ferrara, Department of Economics.
    20. Paul Pecorino, 2016. "A Portion of Profits to Charity: Corporate Social Responsibility and Firm Profitability," Southern Economic Journal, John Wiley & Sons, vol. 83(2), pages 380-398, October.

    More about this item

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:ipolec:doi:10.1086/694408. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/IPE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.