Firms' ethics, consumer boycotts, and signalling

Glazer, Amihai; Kanniainen, Vesa; Poutvaara, Panu

doi:10.1016/j.ejpoleco.2009.12.002

Cited by 24 publications

(19 citation statements)

References 16 publications

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“…In situations where competition is weak or virtually nil, a low CSP reputation will not pose a serious threat to the company's sales or profitability, because under such conditions, customers and suppliers will face high costs to boycott the company (Glazer et al 2010). It is therefore expected that monopolies tend to result in irresponsible corporate behaviour, because monopolistic companies often lack a strong strategic motivation for CSP.…”

Section: Market Competitionmentioning

confidence: 98%

Competition and Institutional Drivers of Corporate Social Performance

Graafland

Smid

2015

De Economist

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Research into corporate social performance (CSP) recently shifted to studying its political economic dimensions. In this paper, we test the influence of price and technological competition and two institutional factors, mandatory reporting and monitoring by non-governmental organizations (NGOs) and media, on CSP. Combining survey data with CSP ratings from Sustainalytics, we find that technological competition, monitoring by NGOs and media and mandatory CSP reporting foster CSP. However, price competition is not found to significantly influence CSP. This indicates that there is no support for the existence of a trade-off between anti-trust policy and CSP. Furthermore, our findings imply that governments can stimulate CSP by making CSP reporting mandatory.

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Section: Market Competitionmentioning

confidence: 98%

Competition and Institutional Drivers of Corporate Social Performance

Graafland

Smid

2015

De Economist

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“…Consumers and producers sometimes actively boycott products from the other nation because of differences in preference. Glazer et al (2010) theoretically show that a firm's profit optimization strategy results in paying additional costs for "ethical" investment (e.g., using environmentally responsible production processes) when consumers are willing to pay for a firm's "ethical" behavior. However, some boycotts target specific states.…”

Section: A Polarization In America and Its Potential Impacts On Economymentioning

confidence: 99%

“…Their finding implies that political and cultural beliefs may affect business relationships through preference in goods or industries. Glazer et al (2010) theoretically show that a firm's profit optimization strategy results in paying additional costs for "ethical" investment (e.g., using environmentally responsible production processes) when consumers are willing to pay for a firm's "ethical" behavior. If, for our purposes, we accept that such conscientious consumers are more concentrated in the Blue nation than the Red nation, producers in the Blue nation would pay more attention to these consumers, and hence consumers in the Blue nation are more likely to purchase products produced in the Blue nation.…”

Section: A Polarization In America and Its Potential Impacts On Economymentioning

confidence: 99%

Trade in Polarized America: The Border Effect Between Red States and Blue States

Ishise

Matsuo

2014

Economic Inquiry

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Political and cultural polarization in the United States is widely discussed, but does it relate to any economic disconnection among states? We estimate the "border" effect between Red and Blue states using the gravity equation with a nonlinear generalized method of moments estimator to simultaneously overcome the problems associated with endogeneity, cross-state price differences, and zero-trade flow. The border effect is robustly confirmed for the 2000s, while not so robustly detected for the 1990s. Notably, in 2007, the border reduces trade between Red and Blue states to approximately 75% of the trade within each set of states. This estimated border effect is much smaller than the United States-Canada national border effect estimated by Anderson and van Wincoop (2003), and by Feenstra (2002), yet is comparable to the border effect that Nitsch and Wolf (2009) find for the former West and East Germanies approximately 10 years after reunification. While the border effect in Germany after reunification is decreasing, the border effect between the Red and Blue states is emerging. We also find the border effect is more significant for consumption, rather than intermediate, goods. The border effect is an important indicator for a potential dismantling of the economic connectivity in the United States. (JEL D72, F10, F15, R1) * We are grateful to the editor Bruce Blonigen, two anonymous referees, Yasushi Asako, Masahiro Endoh, and Giovanni Facchini for their comments and discussions. We also appreciate comments by seminar participants at

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“…The fear of consumers' boycotts therefore affect firms' decisions (see e.g. Feddersen and Gilligan (2001) and Glazer et al (2010)). …”

mentioning

confidence: 99%

Corporate social responsibility and the economics of consumer social responsibility

Étilé

Teyssier

2013

RAEStud

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The promotion of Corporate Social Responsibility (CSR) is likely to depend on consumers' purchase behaviors. While many consumers like the idea of social responsibility, the responsible consumption remains at a low level. This survey analyses two main barriers to responsible consumption: the willingness-to-pay for it, which relates to consumer social preferences; and the information asymmetry between companies and consumers. The economic literature shows that consumer social preferences are related to altruistic, self-image and social image concerns. Only consumers with strong social preferences and a low marginal utility of income (a high income) are likely to purchase CSR products. Moreover, purchase decisions crucially depend on the existence of labels, which truthfully identify the CSR products. Public policies may promote consumer social responsibility through education programs, enhancement of self-and social-image concerns, and careful label regulation.

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Firms' ethics, consumer boycotts, and signalling

Cited by 24 publications

References 16 publications

Competition and Institutional Drivers of Corporate Social Performance

Competition and Institutional Drivers of Corporate Social Performance

Trade in Polarized America: The Border Effect Between Red States and Blue States

Corporate social responsibility and the economics of consumer social responsibility

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