A Duopoly Model of Corporate Social Responsibility and Location Choice

Balboni, Alberto ; Balboni, Fabio (2008) A Duopoly Model of Corporate Social Responsibility and Location Choice. Bologna: Dipartimento di Scienze economiche DSE, p. 20. DOI 10.6092/unibo/amsacta/4606. In: Quaderni - Working Paper DSE (641). ISSN 2282-6483.
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Abstract

We adopt a framework of vertical differentiation to study the issue of Corporate Social Responsibility (CSR). We develop a model of duopoly in a two-country setting, in which firms choose the country of location, the level of CSR and finally compete in the market à la Bertrand. We show that: i) at equilibrium the two firms choose different levels of CSR, i.e. an "ethical" and a "neutral" firm coexist in the market; ii) regardless of its location choice, the “neutral” firm undertakes a level of CSR equal to the minimum international standard; iii) the location choice of both the "ethical" and the "neutral" firm depends on the relative costs of CSR in the two countries; in addition the choice of the “ethical” firm is influenced by the distribution of consumers' tastes for CSR, while the choice of the “neutral” firm is affected by the level of the minimum international standard for CSR.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Balboni, Alberto
Balboni, Fabio
Keywords
Corporate Social Responsibility, Duopoly, Minimum Standards, Location, Vertical Product Differentiation
Subjects
ISSN
2282-6483
DOI
Deposit date
15 Feb 2016 13:56
Last modified
15 Feb 2016 13:56
URI

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