Munich Personal RePEc Archive

Strategic corporate social responsibility and tariff policies: The timing of commitments and policy implications

Xu, Lili and Lee, Sang-Ho (2021): Strategic corporate social responsibility and tariff policies: The timing of commitments and policy implications.

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Abstract

This study considers commitments between tariff policy and corporate social responsibility (CSR) activities, and compares both domestic CSR and foreign CSR. We show that the committed tariff yields lower tariff and higher CSR under domestic CSR, resulting in higher welfare and lower profits, while it might be reversed under foreign CSR if the substitutability is low, which results in lower welfare and profits. Finally, the committed tariff is a desirable equilibrium of an endogenous timing game under domestic CSR, whereas the committed CSR can be under foreign CSR if the substitutability is low.

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