Cross-ownership and strategic environmental corporate social responsibility under price competition

This paper examines the impact of cross-ownership on the strategic incentive of environmental corporate social responsibility (ECSR) within a green managerial delegation contract in a triopoly market engaged in price competition. It demonstrates that bilateral cross-ownership between insiders provid...

Full description

Saved in:
Bibliographic Details
Published in:Environment and development economics 2024-06, Vol.29 (3), p.234-256
Main Authors: Xing, Mingqing, Lee, Sang-Ho
Format: Article
Language:English
Subjects:
Competition
Cooperation
Damage
Duopoly
Environmental degradation
Environmental social & governance
Executive compensation
Incentive plans
Incentives
Markets
Ownership
Pollutants
Pollution
Prices
Profits
Social contract
Social responsibility
Social welfare
Unilateralism
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper examines the impact of cross-ownership on the strategic incentive of environmental corporate social responsibility (ECSR) within a green managerial delegation contract in a triopoly market engaged in price competition. It demonstrates that bilateral cross-ownership between insiders provides weak incentives to undertake ECSR, which has a non-monotone relationship with cross-ownership shares, while it provides strong incentives for outsiders, which increases the ECSR level as cross-ownership increases. It also compares unilateral cross-ownership and finds that a firm that owns shares in its rival has a greater incentive to undertake ECSR than its partially-owned rival, while an outsider has more incentive than firms in bilateral scenarios. These findings reveal that a firm's incentive to increase a market price through ECSR critically depends on its cross-ownership share, while it decreases environmental damage and increases social welfare when the environmental damage is serious.
ISSN:1355-770X
1469-4395
DOI:10.1017/S1355770X24000032