CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTAL TAXATION WITH ENDOGENOUS ENTRY
Contributor(s)Department of Economics and Trade, Dalian Maritime University
Department of Economics, Chonnam National University
corporate social responsibility
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AbstractThis study considers Corporate Social Responsibility (CSR) in Cournot markets with endogenous entry and investigates the effects of CSR on environmental taxation and welfare consequences. We show that the optimal tax under free entry is higher than that under blockaded entry and also higher than marginal environmental damage. We then show that a higher taxation is socially excessive from the viewpoint of socially optimal CSR, which requires an appropriate regulatory framework for CSR promotion. Finally, we show that the environment is less damaged but social welfare deteriorates accompanied with CSR when the fixed cost is low, while pollution abatement activities will reduce the optimal tax and improves both environmental damage and social welfare.
TypeDepartmental Bulletin Paper
Hitotsubashi Journal of Economics. 59(2), 2018, 61-82