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Research article2011Peer reviewed

A micro-economic model of corporate social responsibility

Lundgren, Tommy


This paper explores the economic mechanisms behind corporate social responsibility (CSR) in a microeconomic model of the firm. The study's motivation is to shed light on the potential causes of the observed phenomena of voluntary over-compliance among firms. We investigate how assumptions about costs and benefits affect CSR behavior through a stock of goodwill capital. In optimum, the firm must balance marginal costs and benefits of investing in CSR. We characterize the equilibrium and examine comparative statics and dynamics from a parameterized model. Finally, we link some of the model's results to the empirical literature on CSR.

Published in

2011, Volume: 62, number: 1, pages: 69-95

    UKÄ Subject classification

    Economics and Business
    Social Sciences
    Environmental Sciences related to Agriculture and Land-use

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