The socially responsible choice in a duopolistic market: a dynamic problem of “ethical product” differentiation

The increasing attention of profit maximizing corporations to corporate social responsibility (CSR) is a new stylized fact of the contemporary economic environment. In our theoretical analysis we model CSR adoption as the optimal response of a profit maximizing firm to the competition of a not for profit corporate pioneer in the presence of a continuum of consumers with heterogeneous preferences towards the social and environmental features of the final good. CSR adoption implies a trade-off since, on the one side, it raises production costs but, on the other side, it leads to accumulation of “ethical capital”.We investigate conditions under which the profit maximizing firm switches from price to price and CSR competition by comparing monopoly and duopoly equilibria and their consequences on aggregate social responsibility and consumer welfare. Our findings provide a theoretical background for competition between profit maximizing incumbents and not for profit entrants in markets such as fair trade, organic food, ethical banking and ethical finance

Diffeomorphism-invariant properties for quasi-linear elliptic operators

For quasi-linear elliptic equations we detect relevant properties which remain invariant under the action of a suitable class of diffeomorphisms. This yields a connection between existence theories for equations with degenerate and non-degenerate coerciveness.Comment: 16 page

The Migration FDI puzzle: complements or substitutes?

This paper analyses the link between FDI inflows and migration waves from developing countries. In addition, it investigates mechanisms through which this link works. Empirical results indicate that FDI can be seen as substitutes of migration through direct and indirect labour demand. However, the paper demonstrates that a positive relationship (complementarity effect) between FDI and migration flows takes place. In longitudinal analysis results indicate that the complementarity effect prevails. In cross section analysis, estimating a two equation models, we find that a substitutability effect is at work through the impact of FDI on human capital accumulation but the direct complementarity effect also prevail

Predicting the signs of forecast errors

The signs of forecast errors can be predicted using the difference between individuals' forecasts and the average of earlier forecasts of the same variable. It is possible to improve forecasts without worsening any. It is difficult to reconcile this result with the rational expectations hypothesis, because the average of earlier forecasts is in the information set of the forecaster

Relational Skills and Corporate Productivity in a Comparative Size Class Perspective

Drawing on insights from various fields within game theory literature, such as strategic interactions, social dilemmas, gift exchange, and procedural utility, we argue that corporate social responsibility (CSR) and relational skills-whether between firms, employers and workers, among workers themselves, or with stakeholders-are associated with positive effects on productivity. We test this hypothesis using a comparative approach across small, medium, and large Italian firms, leveraging data from the 2019 CSR survey conducted by the Italian Statistical Institute (ISTAT). Our analysis reveals that firm size plays a crucial role in the impact of relational skills on added value per worker, even after controlling for relevant factors. Key components of relational skills identified in our study include corporate policies focusing on workers' well-being, prioritizing teamwork attitudes in recruitment, supporting initiatives within the local productive network, and involving stakeholders in CSR initiatives. Our findings indicate that stakeholder engagement positively impacts all firm sizes, while worker well-being is particularly significant for small and medium firms, local network initiatives for medium and large firms, and teamwork for medium-sized firms. Instrumental variable estimates find evidence of a causal link beyond these correlations. We conclude that firm size exhibits an inverse U-shaped effect on the impact of teamwork skills, reduces the influence of gift exchange mechanisms, and strengthens the effects of investments in the local productive environment on added value per worker

Corporate social responsability and profit volatility: theory and empirical evidence

Corporate social responsibility (CSR) implies extra care for the well-being of stakeholders different from shareholders. In our theoretical model we show that, when this principle implies that more CSR-oriented companies incorporate stakeholders’ well-being constraints, it translates into higher sensitivity of profits to economic shocks. Our empirical analysis finds support for this hypothesis showing that CSR attributes which relate to positive contributions to stakeholders’ well-being significantly and positively affect idiosyncratic profit volatility. Our findings remain robust when controlled for endogeneity with instrumental variable estimates