The Economics of Corporate Social Responsibility: A Firm Level Perspective Survey
Journal of Economic Surveys, Forthcoming
Posted: 25 Aug 2012 Last revised: 11 Dec 2013
Date Written: december 2013
This article analyzes the economics of Corporate Social Responsibility (CSR), as a private response to market imperfections to satisfy social preferences. Depending on whether they affect regulation, competition, or contracts, market imperfections driving CSR decisions are classified in three categories: public goods and bads and altruism; imperfect competition and incomplete contracts. Such drivers of CSR decisions are presented successively, highlighting the nature of incentives (external or internal) at work and the testable (and tested) hypotheses in the reviewed studies. We finally review the link between CSR and financial performance, but also between CSR and social and environmental performance.
Keywords: Corporate Social Responsibility, Firm Strategy, Market Imperfections, Review
JEL Classification: M14, L20, D21
Suggested Citation: Suggested Citation