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Strategic Relations between Corporate Social Responsibility and Partial Privatization Policy with Foreign Penetration

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  • Xu, Lili
  • Lee, Sang-Ho

Abstract

This study considers a strategic interplay between corporate social responsibility (CSR) and privatization policy in a mixed market, and investigates the impact of the order of sequential games. We compare the different timeline of the game between the privatization-then-CSR and the reverse case of CSR-then-privatization, and highlight the significant role of the foreign shareholding ratio of the CSR-firm. We show that partial privatization is always optimal regardless of the timeline of the game, but the privatization-then-CSR yields a lower (higher) degree of privatization while a higher (lower) level of CSR than the CSR-then-privatization when the foreign penetration is sufficiently low (high). We also show that privatization-then-CSR can be a unique equilibrium in an endogenous timing game but socially desirable only when the foreign penetration is neither sufficiently low nor high.

Suggested Citation

  • Xu, Lili & Lee, Sang-Ho, 2020. "Strategic Relations between Corporate Social Responsibility and Partial Privatization Policy with Foreign Penetration," MPRA Paper 100770, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:100770
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    References listed on IDEAS

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    More about this item

    Keywords

    Strategic CSR; Partial privatization; Foreign penetration; Mixed market;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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