Individual firm and market dynamics of CSR activities

F. Wirl, G. Feichtinger, P.M. Kort

Research output: Contribution to journalArticleScientificpeer-review

Abstract

This paper investigates how firms should plan corporate social responsibility (short CSR). This dynamic analysis starts with a firm's intertemporal optimization problem, and proceeds to analyze interactions with other firms, which are crucial: if CSR is profitable for firm A then it is most likely also profitable for competitors B and C, and these simultaneous decisions affect the gain each would achieve from trying to advance its own position. We find that multiple equilibria exist, irrespective of whether interactions with other firms are taken into account. Interactions can eliminate or create additional steady states and can lead to a situation in which history is insufficient to determine the long run outcome among multiple steady states, so that coordination is beneficial.
Original languageEnglish
Pages (from-to)169-182
JournalJournal of Economic Behavior & Organization
Volume86
DOIs
Publication statusPublished - Feb 2013

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Corporate Social Responsibility
Firm dynamics
Market dynamics
Interaction
Dynamic analysis
Multiple equilibria
Competitors
Optimization problem
Intertemporal optimization
Multiple steady states

Keywords

  • CSR
  • dynamics
  • firms' interactions
  • stability
  • history and expectation dependence

Cite this

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Individual firm and market dynamics of CSR activities. / Wirl, F.; Feichtinger, G.; Kort, P.M.

In: Journal of Economic Behavior & Organization, Vol. 86, 02.2013, p. 169-182.

Research output: Contribution to journalArticleScientificpeer-review

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