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Indiana University Bloomington

BEPP

The Kelley Advantage

The department is home to the authors of Managerial Economics and Business Strategy and Games and Information: An Introduction to Game Theory, two of the nation’s leading textbooks in the field.

Research and Publications

Journal Articles

Environmental Corporate Social Responsibility: A Theoretical Perspective

2008, Review of Environmental Economics and Policy

John W. Maxwell, Thomas P. Lyon

Abstract

This article surveys the growing theoretical literature on the motives for and welfare effects of environmental corporate social responsibility (CSR). We show how both market and nonmarket forces are making environmental CSR profitable, and also discuss altruistic CSR. In particular, nongovernmental organizations strongly influence CSR activities, through both public and private politics. CSR can have varied effects, from attracting green consumers or investors, to preempting government regulation, to encouraging regulation that burdens rivals. Welfare effects of CSR are subtle, and there is no guarantee that CSR enhances social welfare. We identify numerous areas in which additional theoretical work is needed.

Citation

Lyon, Thomas P. and John W. Maxwell (2008), "Environmental Corporate Social Responsibility: A Theoretical Perspective," Review of Environmental Economics and Policy, Vol. 2, No. 2, Summer, pp. 240-260.

Keywords

corporate social responsibility, environment, self-regulation, preemption, private politics