Host: The Japan Society for Management Information
CSR activities with externality are divided into two categories. One is some activities which use firm's know-how (e.g. donating shoes by some shoes company). The other one is a donation by sales (e.g. using the part of sales for development of developing country). Because the firm needs to add cost of CSR activities to price of goods, it may be forced to choose which activity they should do for consumers. We analyse the difference of incentive between the CSR activities for the company and social desirability with respect to the way how the firm supplies CSR activities. We show that, under some conditions, the former CSR activity is desirable, but firms have higher incentive to choose latter CSR activity.
