Corporate Social Responsibility -- A Strategic and Profitable Response to Entry?

9 Pages Posted: 1 Apr 2014

See all articles by Christoph Graf

Christoph Graf

Stanford University - Department of Economics

Franz Wirl

University of Vienna - Institute of Business Administration

Date Written: October 1, 2012

Abstract

This paper investigates whether an incumbent has an incentive to introduce corporate social responsibility (CSR) activities only as a response to entry by a competitor who cannot provide CSR (credibly) due to its lack of recognition, at least at the outset. More precisely, this paper shows that monopolistic firms can have indeed this incentive. Whether they use this strategy depends on the costs of entry deterrence, consumers valuations of CSR and on the costs of providing it. Therefore, turning a firm or product green can provide a win-win.

Keywords: CSR, Entry, Monopoly

JEL Classification: D21, L12

Suggested Citation

Graf, Christoph and Wirl, Franz, Corporate Social Responsibility -- A Strategic and Profitable Response to Entry? (October 1, 2012). Available at SSRN: https://ssrn.com/abstract=2418928 or http://dx.doi.org/10.2139/ssrn.2418928

Christoph Graf (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
STANFORD, CA 94305-6072
United States

Franz Wirl

University of Vienna - Institute of Business Administration ( email )

Bruenner Strasse 72
Vienna, A1210
Austria
+43 - 1 - 4277 38102 (Phone)
+43 - 1 - 4277 38104 (Fax)

HOME PAGE: http://ieu.bwl.univie.ac.at

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
134
Abstract Views
1,036
rank
253,731
PlumX Metrics