Strategic Corporate Social Responsibility by a Multinational Firm and International Privatization Policies

Xu, Lili and Lee, Sang-Ho (2021): Strategic Corporate Social Responsibility by a Multinational Firm and International Privatization Policies.

Abstract

We consider a multinational global firm that adopts corporate social responsibility (CSR) in two countries and examine international privatization policies with the strategic transmission of CSR. We find that the strategic level of CSR crucially depends on the percentage of the global firm’s shares held in each country. We show that single privatization increases (decreases) CSR when the share is small (large), while dual privatization always leads to the highest CSR. We also show that domestic welfare under global standard of CSR, which is set to improve global welfare, is higher (lower) than that under the global firm’s strategic CSR when the share is small (large). Finally, we show that dual nationalization is a unique equilibrium in an international privatization choice game, irrespective of imposing the global standard of CSR, which causes global welfare loss.

• Item Type: MPRA Paper
• Language: English
• Keywords: global firm; strategic CSR; global standards of CSR; international privatization policy
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L33 - Comparison of Public and Private Enterprises and Nonprofit Institutions ; Privatization ; Contracting Out

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