Caring or Pretending to Care? Social Impact, Firms' Objectives, and Welfare (former title: Social Responsibility and Firm's Objectives)
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21 février 2022
- handle: 10670/1.3l6btg
- hal: hal-03393065
- SCIENCESPO: 2441/7fsnj6af7v9ncrf76qn5p5on9e
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info:eu-repo/semantics/altIdentifier/hdl/2441/7fsnj6af7v9ncrf76qn5p5on9e
http://creativecommons.org/licenses/by-nd/ , info:eu-repo/semantics/OpenAccess
Mots-clés
Benefit corporation law Social impact Welfare analysis Firms' objectives Externalities Structural estimation L - Industrial Organization/L.L2 - Firm Objectives, Organization, and Behavior/L.L2.L21 - Business Objectives of the Firm D - Microeconomics/D.D6 - Welfare Economics/D.D6.D64 - Altruism • Philanthropy C - Mathematical and Quantitative Methods/C.C1 - Econometric and Statistical Methods and Methodology: General/C.C1.C14 - Semiparametric and Nonparametric Methods: GeneralSujets proches
Businesses Firms Companies Enterprises Business organizations Organizations, BusinessCiter ce document
Michele Fioretti, « Caring or Pretending to Care? Social Impact, Firms' Objectives, and Welfare (former title: Social Responsibility and Firm's Objectives) », Archive ouverte de Sciences Po (SPIRE), ID : 10670/1.3l6btg
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Résumé
Many firms claim that “social impact” influences their strategies. This paper develops a structural model that quantifies social impact as the sum of surpluses to a firm and its stakeholders. With data from a for-profit firm whose prosocial expenditures are measurable and salient to consumers, the analysis shows that the firm spends prosocially beyond profit maximization, thereby increasing welfare substantially. Incentivizing a standard profit-maximizing firm to behave similarly would require subsidies amounting to 58% of its prosocial expenditures because consumers’ willingness to pay is relatively inelastic to prosocial expenses. Therefore, social impact resembles a self-imposed welfare enhancing tax with limited pass-through.