Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/252015 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9498
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Firms are under increasing pressure to meet stakeholders' demand for Corporate Social Responsibility (CSR) along their global value chains. We study the incentives for and investments in CSR at different stages of the production process. We analyze a model of sequential production with incomplete contracts where CSR by independent suppliers differentiates the final product in the eyes of caring consumers. The model predicts an increasing CSR profile for suppliers along the value chain: from upstream suppliers with low CSR to downstream suppliers with higher CSR. We confirm this prediction using Indian firm-level data. We compute a firm's value chain position combining product-level information in our data with the World Input-Output Database. We find that more downstream firms have higher CSR expenditures as measured by a combination of staff welfare spending and social community spending.
Subjects: 
corporate social responsibility
global value chains
incomplete contracts
property rights theory
GVC positioning
India
emerging markets
JEL: 
D23
F12
F14
F18
F61
F63
L23
M14
O12
Document Type: 
Working Paper
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