Corporate Social Responsibility, Vertical Product Differentiation and International CompetitionLi, J., Wang, X., Dong, B., & Yu, E. S. H. (2019). Corporate social responsibility, vertical product differentiation and international competition. Review of International Economics, 27(4), 1108.
The current paper addresses this question in an import‐competing duopoly model with vertical product differentiation. It is shown that the tariff will decrease if the foreign firm switches from a purely profit‐driven firm to a CSR firm. A consumer‐oriented CSR strategy will always hurt the domestic firm’s profit, whereas the relationship between the foreign firm’s profit and CSR sensitivity is inadvertently U‐shaped.