IDEAS home Printed from https://ideas.repec.org/p/unp/wpaper/200706.html
   My bibliography  Save this paper

The Economics of Corporate Social Responsibility (CSR): Selling to Someone who Has Personal Valuation

Author

Listed:
  • Martin Daniel Siyaranamual

    (Department of Economics, Padjadjaran University)

Abstract

This paper provides general insight on the economic feasibility and desirability of Corporate Social Responsibility (CSR), in order to explain why some firms voluntarily over comply with social matters. In this paper I define CSR as the activity in which firms makes an explicit pair between the sales of private good and the provision of public good. Furthermore, the consumers are divided into two different categories; responsible consumers and non responsible ones. The main result shows that CSR activity could be considered as a firm's strategy to internalize the externality, and thus it would not be contradicted with profit maximization. Moreover, could be an alternative way for the provision of public good, especially in the presence of government failure.

Suggested Citation

  • Martin Daniel Siyaranamual, 2007. "The Economics of Corporate Social Responsibility (CSR): Selling to Someone who Has Personal Valuation," Working Papers in Economics and Development Studies (WoPEDS) 200706, Department of Economics, Padjadjaran University, revised Jun 2007.
    • Handle: RePEc:unp:wpaper:200706
    as

    Download full text from publisher

    File URL: http://lp3e.fe.unpad.ac.id/wopeds/200706.pdf
    File Function: First version, 2007
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Krueger, Anne O, 1990. "Government Failures in Development," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 9-23, Summer.
    2. Geoffrey Heal, 2005. "Corporate Social Responsibility: An Economic and Financial Framework," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 30(3), pages 387-409, July.
    3. Gene M. Grossman & Elhanan Helpman, 2005. "A Protectionist Bias in Majoritarian Politics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(4), pages 1239-1282.
    4. David P. Baron, 2001. "Private Politics, Corporate Social Responsibility, and Integrated Strategy," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(1), pages 7-45, March.
    5. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    6. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-641, August.
    7. Francis M. Bator, 1958. "The Anatomy of Market Failure," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 72(3), pages 351-379.
    8. Mark Bagnoli & Susan G. Watts, 2003. "Selling to Socially Responsible Consumers: Competition and The Private Provision of Public Goods," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(3), pages 419-445, September.
    9. Carl Shapiro, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(4), pages 659-679.
    10. Brekke, Kjell Arne & Nyborg, Karine, 2005. "Moral hazard and moral motivation: Corporate social responsibility as labor market screening," Memorandum 25/2004, Oslo University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    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. 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. Markus Kitzmueller, 2008. "Economics and Corporate Social Responsibility," Economics Working Papers ECO2008/37, European University Institute.
    3. David P. Baron, 2009. "A Positive Theory of Moral Management, Social Pressure, and Corporate Social Performance," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(1), pages 7-43, March.
    4. Renneboog, Luc & Ter Horst, Jenke & Zhang, Chendi, 2008. "Socially responsible investments: Institutional aspects, performance, and investor behavior," Journal of Banking & Finance, Elsevier, vol. 32(9), pages 1723-1742, September.
    5. Paul Pecorino, 2013. "Monopolistic Competition and Public Good Provision with By‐product Firms," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(4), pages 875-893, December.
    6. 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.
    7. Pecorino, Paul, 2010. "By-product lobbying with rival public goods," European Journal of Political Economy, Elsevier, vol. 26(1), pages 114-124, March.
    8. Ana S. Branca & Joaquim P. Pina & Margarida Catalão-Lopes, 2012. "Corporate Giving, Competition and the Economic Cycle," Working Papers Department of Economics 2012/15, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    9. Samwick, Andrew A. & Wang, Sophie, 2024. "Corporate social responsibility and voting over public goods," Global Finance Journal, Elsevier, vol. 60(C).
    10. Hediger, Werner, 2010. "Welfare and capital-theoretic foundations of corporate social responsibility and corporate sustainability," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(4), pages 518-526, August.
    11. Patricia Crifo & Vanina D. Forget, 2015. "The Economics Of Corporate Social Responsibility: A Firm-Level Perspective Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(1), pages 112-130, February.
    12. Puggioni, Daniela & Stefanou, Spiro E., 2019. "The value of being socially responsible: A primal-dual approach," European Journal of Operational Research, Elsevier, vol. 276(3), pages 1090-1103.
    13. Krautheim, Sebastian & Verdier, Thierry, 2016. "Offshoring with endogenous NGO activism," Journal of International Economics, Elsevier, vol. 101(C), pages 22-41.
    14. Baron, David P., 2008. "Managerial contracting and corporate social responsibility," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 268-288, February.
    15. Bert Scholtens, 2007. "Financial and Social Performance of Socially Responsible Investments in the Netherlands," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(6), pages 1090-1105, November.
    16. Dam, Lammertjan & Scholtens, Bert, 2008. "Environmental regulation and MNEs location: Does CSR matter?," Ecological Economics, Elsevier, vol. 67(1), pages 55-65, August.
    17. Verdier, Thierry & Krautheim, Sebastian, 2012. "Globalization, Credence Goods and International Civil Society," CEPR Discussion Papers 9232, C.E.P.R. Discussion Papers.
    18. Marion Dupire & Bouchra M’Zali, 2018. "CSR Strategies in Response to Competitive Pressures," Journal of Business Ethics, Springer, vol. 148(3), pages 603-623, March.
    19. Teraji, Shinji, 2009. "A model of corporate social performance: Social satisfaction and moral conduct," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(6), pages 926-934, December.
    20. Broccardo, Eleonora & Hart, Oliver D. & Zingales, Luigi, 2021. "Exit vs. Voice," Working Papers 302, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.

    More about this item

    Keywords

    Corporate social responsibility; public goods;

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:unp:wpaper:200706. 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: Arief Anshory Yusuf (email available below). General contact details of provider: https://edirc.repec.org/data/lppadid.html .

    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.