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"Economic Perspectives on Corporate Social Responsibility"(joint with M. Kitzmueller)


   

Professor Jay Shimshack's "Economic Perspectives on Corporate Social Responsibility" (joint with M. Kitzmueller) has received considerable attention since its publication in the March 2012 issue of the Journal of Economic Literature. The paper was mentioned in articles published by the New York Times, The Atlantic, and several others. The American Economic Association made the paper its featured free access download on its press page for the months of April and May.

The research provides economic evidence on two key questions. First, why do firms engage in socially and environmentally responsible activities not mandated by regulatory or legal requirements? Second, is this observed corporate social responsibility a good thing?

Regarding the first question, the authors find limited systematic empirical evidence in favor of mechanisms related to induced innovation, moral hazard, shareholder preferences, or labor markets. In contrast, the authors uncover consistent empirical evidence in favor of mechanisms related to consumer markets, private politics, and public politics. Regarding the second question, the answer is nuanced. Corporate provision of social and environmental goods can produce higher social welfare than other public good provision channels -- but it does not necessarily always do so.

 

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