Discussion paper

DP18121 Strategic Leadership in Corporate Social Responsibility

We propose a theory of strategic Corporate Social Responsibility (CSR). Shareholders commit to a mission statement that extends beyond value maximization but ultimately achieve higher shareholder value than if committing to value maximization. We thus provide a new formalization of the “doing well by doing good” adage. We develop conditions such that the mission-statement game is a pure coordination game, which provides a natural and novel theory of strategic leadership in CSR: By selecting a CSR mission statement, a first mover leads the industry to a Pareto superior equilibrium. The theory can rationalize recent evidence on correlated industry-wide CSR adoption.


Albuquerque, R and L Cabral (2023), ‘DP18121 Strategic Leadership in Corporate Social Responsibility‘, CEPR Discussion Paper No. 18121. CEPR Press, Paris & London. https://cepr.org/publications/dp18121