The Economics of Corporate Social Responsibility: A Firm‐Level Perspective Survey

19 Pages Posted: 11 Jan 2015

See all articles by Patricia Crifo

Patricia Crifo

Ecole Polytechnique, Paris - Laboratoire d'Econometrie; Université Paris X Nanterre - Department of Economics; Center for Interuniversity Research and Analysis on Organization (CIRANO)

Vanina D. Forget

Ecole Polytechnique ParisTech - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: February 2015

Abstract

This paper analyzes the economics of Corporate Social Responsibility (CSR), as a private response to market imperfections in order 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. We successively present these drivers of CSR decisions and highlight 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, as well as between CSR and social and environmental performance. A twofold discrepancy appears in the literature, opening future research paths: a disconnection between our understanding of CSR drivers and CSR impacts; and a knowledge gap between CSR financial and social consequences, the latter having received little attention.

Keywords: Corporate Social Responsibility, Firm Strategy, Market Imperfections, Review

Suggested Citation

Crifo, Patricia and Forget, Vanina D., The Economics of Corporate Social Responsibility: A Firm‐Level Perspective Survey (February 2015). Journal of Economic Surveys, Vol. 29, Issue 1, pp. 112-130, 2015. Available at SSRN: https://ssrn.com/abstract=2547834 or http://dx.doi.org/10.1111/joes.12055

Patricia Crifo (Contact Author)

Ecole Polytechnique, Paris - Laboratoire d'Econometrie ( email )

Route de Saclay
Palaiseau, 91128
France

Université Paris X Nanterre - Department of Economics

Nanterre Cedex, 92001
France

Center for Interuniversity Research and Analysis on Organization (CIRANO)

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec
Canada

Vanina D. Forget

Ecole Polytechnique ParisTech - Department of Economics ( email )

Palaiseau Cedex, F-91128
France

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