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The Signaling Role of Corporate Social Responsibility

Author

Listed:
  • Tomer Blumkin
  • Yoram Margalioth
  • Adi Sharoni

Abstract

We examine the role of CSR as a mechanism for private provision of public goods. We argue that corporations are using CSR to signal high product quality and demonstrate that signaling gives rise to an excessive level of contributions that offsets the positive externality, which causes the under-provision of public goods. We analyze the tax policy implications of such assertion. Accounting for this offset would call for a decrease in (and potentially elimination of) the subsidy offered to corporations engaged in CSR activities.

Suggested Citation

  • Tomer Blumkin & Yoram Margalioth & Adi Sharoni, 2014. "The Signaling Role of Corporate Social Responsibility," CESifo Working Paper Series 4962, CESifo.
    • Handle: RePEc:ces:ceswps:_4962
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    References listed on IDEAS

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    More about this item

    Keywords

    signaling; corporate social responsibility; public goods; Pigouvian taxation;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • K30 - Law and Economics - - Other Substantive Areas of Law - - - General

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