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

D'Alessandro, Simone and Fanelli, Domenico (2009): 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.

• Item Type: MPRA Paper
• Language: English
• Keywords: CSR; ethical consumption; income distribution; non-linear dynamics; general equilibrium
• Subjects: D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D50 - General; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M14 - Corporate Culture ; Diversity ; Social Responsibility; D - Microeconomics > D3 - Distribution > D30 - General

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