- Umeå University
A micro-economic model of corporate social responsibility
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.
2011, Volume: 62, number: 1, pages: 69-95
UKÄ Subject classification
Economics and Business
Environmental Sciences related to Agriculture and Land-use
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