Impacts of competition between buying firms on corporate social responsibility efforts: Does competition do more harm than good?

• Published in: Transportation research. Part E, Logistics and transportation review Vol. 140; p. 101985
• Main Authors: Shi, Xiutian, Chan, Hau-Ling, Dong, Ciwei
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.08.2020
• Subjects: Auditing; Competition; Corporate social responsibility; Emerging markets; Supply chain; Supply chain; Competition; Corporate social responsibility; Emerging markets; Auditing
• ISSN: 1366-5545; 1878-5794
• DOI: 10.1016/j.tre.2020.101985

•New entrant will enter the market when the profit margin from selling is large.•The incumbent buyer chooses different CSR efforts as defensive strategies.•The supply chain becomes less responsible and reduces CSR efforts with competition.•The effect of competition is weakened when the competitive intensity increases.•Detection efficiency plays a crucial role in responsibility and strategy preference. Recently, corporate social responsibility (CSR) has been received extensive attentions in emerging markets. In this paper, we explore the impact of competition on CSR in supply chains, where the buyers strategically make CSR efforts with their common supplier to capture consumers with CSR awareness. We derive conditions for each firm’s optimal CSR efforts, strategy preferences and CSR implications in monopoly and duopoly scenarios. Compared with the monopoly scenario, the supply chain is more likely to be irresponsible and reduce the total CSR effort level in the duopoly scenario. However, the effect of competition is weakened when the competitive intensity increases.