Work

The Strategic Adoption of Environmental Corporate Social Responsibility with Network Externalities

Year: 2023

Type: article

Abstract: This paper adopts a green managerial delegation model in a polluting network industry wherein consumers form fulfilled rational expectations of network externalities. We show that firms are consistently incentivized to undertake ECSR (environmental corporate social responsibility) under price competition, while positive network externalities can increase the strategic level of ECSR. We also show that product substitutability between network products can play an important role in determining a firm’s strategic level of ECSR and resulting profits. Finally, ECSR is conducive to increasing environmental quality and social welfare in a high-polluting network industry. Therefore, the strategic adoption of ECSR in a network industry is Pareto-improving as environmental damage becomes serious.

Source: The B E Journal of Theoretical Economics

DOI: 10.1515/bejte-2022-0136

Authors: Mingqing Xing, Sang-Ho Lee

Institutions: Weifang University, Chonnam National University

Language: English

Topic: Environmental Sustainability in Business

Subfield: Marketing

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Responsible consumption and production

Open Access status: hybrid

Estimated APC paid: $2,163