Voluntary Agreements And Community Development As CSR In Innovation Strategies

The present paper examines how an innovating firm decides between two forms of Voluntary Agreements (VA) in a context, where a Non-Governmental Organization (NGO) rather than a regulator watches over citizens' interests. The innovation generates profit and consumer surplus as well as environmental damage. Corporate Social Responsibility (CSR) within the innovation process is considered in terms of a redistribution of profit towards community development, with or without additional abatement efforts via a VA. Bargaining between firm and NGO yields the amount allocated to community development.