The Role of Income Distribution in the Diffusion of Corporate Social Responsibility

26 Pages Posted: 3 Apr 2015

See all articles by Simone D’Alessandro

Simone D’Alessandro

University of Pisa - Department of Economics

Domenico Fanelli

University of Pisa - Department of Economics

Date Written: May 2015

Abstract

The purpose of this paper is to investigate the link between corporate social responsibility (CSR) growth and income distribution. We present a general equilibrium model where social responsibility enters both firms' and consumers' decisions. At equilibrium, different degrees of CSR diffusion may arise. We study the conditions under which there exists a virtuous circle which ties increases in the diffusion of CSR to reductions in income inequality. Under certain circumstances, any policy which promotes CSR diffusion induces a reduction in income inequality. By contrast, when such conditions are not satisfied, only redistributive policies may generate the virtuous circle.

Suggested Citation

D’Alessandro, Simone and Fanelli, Domenico, The Role of Income Distribution in the Diffusion of Corporate Social Responsibility (May 2015). Metroeconomica, Vol. 66, Issue 2, pp. 187-212, 2015, Available at SSRN: https://ssrn.com/abstract=2589310 or http://dx.doi.org/10.1111/meca.12066

Simone D’Alessandro (Contact Author)

University of Pisa - Department of Economics ( email )

via Ridolfi 10
I-56100 Pisa, PI 56100
Italy

Domenico Fanelli

University of Pisa - Department of Economics

via Ridolfi 10
I-56100 Pisa, PI 56100
Italy

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