NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

When Is Social Responsibility Socially Desirable?

Jean-Etienne de Bettignies, David T. Robinson

NBER Working Paper No. 21364
Issued in July 2015
NBER Program(s):   CF

We study a model in which corporate social responsibility (CSR) arises as a response to inefficient regulation. In our model, firms, governments, and workers interact. Firms generate profits but create negative spillovers that can be attenuated through government regulation, which is set endogenously and may or may not be socially optimal. Governments may choose suboptimal levels of regulation if they face lobbying pressure from companies. Companies can, in turn, hire socially responsible employees who enjoy taking actions to ameliorate the negative spillovers. Because firms can capture part of the rent created by allowing socially responsible employees to correct social ills, in some settings they find it optimal to lobby for inefficient rules and then capture the surplus associated with being "good citizens" in the face of bad regulation. In equilibrium, this means CSR can either increase or decrease social welfare, depending on the costs of political capture.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w21364

Users who downloaded this paper also downloaded* these:
Stiglitz w21327 The Measurement of Wealth: Recessions, Sustainability and Inequality
Gabaix, Lasry, Lions, and Moll w21363 The Dynamics of Inequality
Atkin, Chaudhry, Chaudry, Khandelwal, and Verhoogen w21417 Organizational Barriers to Technology Adoption: Evidence from Soccer-Ball Producers in Pakistan
Hong and Liskovich w21215 Crime, Punishment and the Halo Effect of Corporate Social Responsibility
Levitt and Lin w21628 Catching Cheating Students
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us