Template-type: ReDIF-Paper 1.0
Author-Name: Mukherjee, Vivekananda
Author-Email: mukherjeevivek@hotmail.com
Author-Workplace-Name: Department of Economics, Jadavpur University
Author-Name: Ramani, Shyama V.
Author-Email: ramani@merit.unu.edu
Author-Workplace-Name: UNU-MERIT, and Ecole Polytechnique Paris
Title: Voluntary agreements and community development as CSR in innovation
	 strategies
Abstract: The present paper examines how an innovating firm decides between two 
	 forms of voluntary agreements (VA) in a context, where a 
	 non-governmental organization (NGO) rather than a regulator watches over 
	 citizens' interests. The innovation generates profit and consumer 
	 surplus as well as environmental damage. Corporate social responsibility 
	 (CSR) within the innovation process is considered in terms of a 
	 redistribution of profit towards community development, with or without 
	 additional abatement efforts via a VA. Bargaining between firm and NGO 
	 yields the amount allocated to community development. The model 
	 demonstrates that the firm's choice of VA hinges on the tradeoffs 
	 between appropriating the full innovation profit and paying a higher 
	 lump sum towards community development or sacrificing some of the 
	 innovation profit by lowering innovation effort, but gaining in terms of 
	 paying a lesser amount towards community development. CSR with abatement 
	 is unlikely in the case of radical innovations. There is also a clear 
	 divergence of interests between the firm, the NGO and the State for some 
	 parameter configurations, which are duly identified.
Classification-JEL: M14, O32, O33
Keywords: Corporate social responsibility, voluntary agreements, community
	 development, donations, innovation
Series: UNU-MERIT Working Papers
Creation-Date: 2011
Number: 2011-016
File-URL: https://unu-merit.nl/publications/wppdf/2011/wp2011-016.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2011016