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Abstract:
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Corporate Social Responsibility (CSR) is an important economic phenomenon with broad implications for firms, employees, consumers, investors, governments and NGOs alike. This paper collects, structures and combines scattered pieces of economic theory and empirical evidence in novel ways that shed light on various fundamental economic questions related to CSR. The main conjecture presents individual preferences as the ultimate driving force behind any form of CSR. In the presence of social stakeholder preferences, firms may use strategic CSR to maximize profits, while not-for-profit CSR may satisfy shareholders. social ambitions. Only if managers take CSR beyond strategic levels or shareholder preferences, does CSR constitute moral hazard. Incentives and mechanisms underlying for-profit CSR will be outlined in greater detail. Six frameworks for the analysis of strategic CSR are proposed and analyzed. Finally, some empirical issues related to measurement and estimation of CSR are briefly discussed. |