We study a model in which corporate social responsibility (CSR) arises as a response to inefficient regulation. In our …, this means CSR can either increase or decrease social welfare, depending on the costs of political capture …

for profit-maximizing entrepreneurs; and 2) CSR arises endogenously as a response to imperfect regulatory oversight … their responsible workers, and in turn engage in CSR through self-regulation, provided that regulatory oversight is poor … negative impact of regulatory oversight on CSR activity. To test this, we exploit the UK's 2012 decision to mandate greenhouse …

model where being located within an industry cluster increases opportunities to make acquisitions, and to facilitate those …