The Role of Income Distribution in the Diffusion of Corporate Social Responsibility

Abstract

The purpose of this paper is to investigate the link between CSR growth and income distribution. We present a general equilibrium model where social responsibility enters both firms' and consumers' decisions. The model admits the existence of multiple equilibria, each of them characterized by a different diffusion of CSR. We study the conditions under which there exists a virtuous circle which ties increases in the diffusion of CSR to reductions in income inequality and viceversa. Under certain circumstances, any policy which promotes the diffusion of CSR induces a reduction of income inequality. By contrast, when such conditions are not satisfied, only redistributive policies may generate the virtuous circle.JEL classification: D30; D50; D63; H30; M14.

Credits trading mechanism for corporate social responsibility: an empirically grounded framework

“…Thus, one of the experts from academia designated the CSR related activities and even its credits trading mechanism to be 'useless at best and harmful at worst'. Some of the interviewed experts stated that as corporations are the entities who would eventually benefit in the long run from a much more stable eco-system and society (D'Alessandro and Fanelli, 2009). Therefore, they should not be incentivised by any form of financial compensation either by tax benefits or CSR certificates; nevertheless, the authors did not identify such a viewpoint to be pragmatic enough for encouraging a more positive commitment by corporations towards social responsibility.…”

“…d The class 1 measures not only encourage product and technology innovation, but the implementation would contribute to local and international employment growth. Thus, contributing to the tax revenue and disposable income, essential for the continuity of a healthy economy (D'Alessandro and Fanelli, 2009;Fishman, 2012;Tsoutsoura, 2004).…”

“…As a result, the corporations implementing class 1 CSR projects can provide a combined package of investment and CSR certificates to their investors who mostly comprise of families and individuals. Accordingly, the investors who invest in such socially responsible mutual fund schemes would not only get handsome financial returns but would also be investing in class 1 CSR projects which as discussed previously are capable of materialising positive sustainable growth (D'Alessandro and Fanelli, 2009;Tsoutsoura, 2004).…”

“…As described by Porter and Kramer (2006) on enterprises focusing towards creating shared value approach that emphasises the significance of human capital, replenishment of resources and efficient government for improvising income distribution as well as wealth generation. Moreover, detailed studies have proved a positive correlation between CSR and the aforementioned outcomes (D'Alessandro and Fanelli, 2009;Tsoutsoura, 2004). For instance, over 40 years Nestle's CSR endeavours in the Moga region of Northern India lead to the establishment of many local dairies and a substantial growth in milk collection under expert guidance.…”

Corporate Social Responsibility and Justice in the Salary Structure: Practice or Symbolism?

“…The relationship between CSR and a company's economic and financial performance has been widely studied, and a positive effect of the CSR statement on the company's financial performance has been demonstrated through the improvement of the company's reputation (Ikram et al, 2020;Miller et al, 2020;Pham & Tran, 2020). However, the company has other social responsibilities besides maximizing profits (D'Alessandro & Fanelli, 2015). A socially responsible company works to maximize its profits while addressing other concerns that arise from the firm's social and environmental impacts (Carroll, 2015).…”