Abstract
We investigate the incentives of firms' owners to commit voluntarily to corporate social responsibility (CSR) activities in an oligopolistic market. The socially responsible attributes attached to products are considered as credence goods, with consumers forming expectations about their existence and level. We show that hiring an ‘individually’ socially responsible CEO and delegating to him the CSR effort and market decisions acts as a commitment device for the firm's owners and credibly signals to consumers that the firm will undertake the ‘missioned’ CSR activities. We also find that CSR activities are welfare enhancing for consumers and firms and thus, they should be encouraged.
| Original language | English |
|---|---|
| Pages (from-to) | 460-473 |
| Journal | Managerial & Decision Economics |
| Volume | 35 |
| Issue number | 7 |
| Early online date | 30 Jul 2013 |
| DOIs | |
| Publication status | Published - 1 Oct 2014 |
Access to Document
- MITROKOSTAS_2014_cright_MDE__Strategic Corporate Social Responsibility Activities and Corporate Governance
This is the accepted version of the following article: Strategic Corporate Social Responsibility Activities and Corporate Governance in Imperfectly Competitive Markets, 2014, Managerial and Decision Economics, 35(7), pp. 460-473, ISSN: 1099-1468, DOI: 10.1002/mde.2635, which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1002/mde.2635/full.