Who benefits from corporate social responsibility? Reciprocity in the presence of social incentives and self-selection

Guglielmo Briscese, Nick Feltovich, Robert L. Slonim

Research output: Contribution to journalArticleResearchpeer-review

3 Citations (Scopus)

Abstract

Firms can donate a share of profits to charity as a form of corporate social responsibility (CSR). Recent experiments have found that such initiatives can induce higher effort by workers, generating benefits for both sides of the labour market. We design a novel version of the gift-exchange game to account for self-selection, and find that wages remain the most effective incentive to attract and motivate workers, with corporate donations playing a smaller role than previously suggested. We also show that firms substitute donations to charity with lower wage offers, keeping their profits constant but reducing workers' earnings. Initiatives of corporate philanthropy can thus be marginally beneficial for firms, but considerably costly for workers.

Original languageEnglish
Pages (from-to)288-304
Number of pages17
JournalGames and Economic Behavior
Volume126
DOIs
Publication statusPublished - Mar 2021

Keywords

  • Corporate philanthropy
  • Gift exchange
  • Reciprocity
  • Self-selection

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