Purpose

This paper aims to investigate the motivation for firms to innovate their products to be socially responsible in the presence of the spillover effect. The follower of the innovation in corporate social responsibility (CSR) can benefit from the leader’s innovation by technological spillover. For instance, evidence can be found in the cosmetics industry (e.g. Lush Retail Ltd. and The Body Shop) and the market of hybrid electric vehicles (e.g. Toyota and Honda). Moreover, consumers may have different perceptions on the sequence of CSR innovation by firms, they may prefer more on the CSR product launched by the leader because they usually relate the desired stage to their interests when making a purchase decision. Therefore, the firms’ decision to be a leader of the CSR innovation depends on the trade-off between the loss in the spillover effect and the benefit of the first-mover advantage, which has not been considered by the existing literature. This paper explains the firms’ motivation on CSR innovation in a realistic situation where competing firms’ CSR programs are launched sequentially and sheds light on the private sector’s decision on strategy from the perspective on the social contribution, and provides some managerial implications about the competing firms’ strategies of launching the CSR innovation.

Design/methodology/approach

The authors construct a two-period Hotelling model in which consumers are divided into two groups: the altruistic and normal consumers. The altruistic consumers have more willingness to pay for the CSR product while the normal consumers only care about the product performance improved by the firms’ CSR activities. Firms have the option to innovate their basic products to be socially responsible and make their decision on such CSR innovation sequentially. Moreover, the follower of the innovation can receive a spillover effect from the leader, meaning that there may exist a second-mover advantage in terms of innovation (the authors define this as a spillover effect), but in the meanwhile, the altruistic consumers value more on the CSR product sold by the leader than that by the follower (the authors define this as a preference-reduction effect). This implies that the firm can benefit in the production process from being a second-mover of the CSR innovation but may lose its first-mover advantage in terms of the preference-reduction effect. By finding and analyzing the sub-game perfect Nash equilibrium, the authors try to figure out the firms’ decisions on CSR innovation in various situations.

Findings

The authors find that the firms’ motivation of CSR innovation crucially depends on the fraction of the altruistic consumers, as well as the spillover effect and the preference-reduction effect. A large (small) fraction of the altruistic consumers attracts (restricts) both the leader and the follower to engage in CSR innovation. More importantly, when such fraction is not too large but stays at a relatively high level, a potential leader of the CSR innovation may not wish to innovate. Hence, the potential follower may be the monopolist in the market of the socially responsible product. In addition, the authors reexamine this result in a variation model where a leader can make its decision on the CSR innovation to be more flexible by allowing it can innovate in either periods 1 or 2. The authors demonstrate that when the fraction of the altruistic consumers falls in an intermediate range, the leader may wish to delay the CSR innovation to period 2. In such a case, the leader of the CSR innovation may tend to trade its first-mover advantage for head-to-head competition with the follower and prevents the follower from benefiting from the spillover effect. Moreover, a flexible choice on the CSR innovation brings greater initiative to a firm to be the leader of the innovation.

Originality/value

Nearly all the studies about firms’ decisions on CSR innovation are conducted in an environment of simultaneous move, which is not appropriate to describe the real business world; many pieces of evidence show that many CSR programs are launched sequentially rather than simultaneously. The theory identifies a couple of important factors of the CSR innovation in a more realistic situation, i.e. sequential more on CSR innovation. Both spillover effect and preference-reduction effect crucially affect the firms’ decision on innovating their products to be socially responsible, which contributes to the existing literature in CSR and strategic decision. This paper also sheds some light on managerial implications with CSR innovation under various situations of competition.

中文翻译：

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具有创新溢出效应的战略性企业社会责任

目的

本文旨在调查企业在存在溢出效应的情况下创新其产品以承担社会责任的动机。企业社会责任（CSR）创新的追随者可以通过技术溢出从领导者的创新中受益。例如，可以在化妆品行业（例如 Lush Retail Ltd. 和 The Body Shop）和混合动力电动汽车市场（例如丰田和本田）中找到证据。此外，消费者对企业CSR创新的顺序可能有不同的看法，他们可能更喜欢领导者推出的CSR产品，因为他们在做出购买决定时通常会将期望的阶段与他们的兴趣联系起来。所以，企业成为 CSR 创新领导者的决定取决于溢出效应的损失和先发优势的收益之间的权衡，这在现有文献中尚未考虑。本文在竞争企业的 CSR 项目依次启动的现实情况下解释了企业的 CSR 创新动机，并从社会贡献的角度阐明了私营部门的战略决策，并提供了对竞争企业的一些管理启示'启动企业社会责任创新的战略。

设计/方法/方法

作者构建了一个两期 Hotelling 模型，其中消费者分为两组：利他消费者和正常消费者。利他型消费者更愿意为企业社会责任产品买单，而普通消费者只关心企业的企业社会责任活动所提高的产品绩效。公司可以选择创新其基本产品以承担社会责任，并按顺序对此类 CSR 创新做出决定。此外，创新的追随者可以从领导者那里获得溢出效应，这意味着在创新方面可能存在后发优势（作者将此定义为溢出效应），但同时利他的消费者更看重领导者销售的 CSR 产品比追随者销售的更多（作者将此定义为偏好减少效应）。这意味着公司可以在生产过程中受益于成为企业社会责任创新的后发者，但可能会失去其在偏好减少效应方面的先发优势。通过寻找和分析子博弈完美纳什均衡，作者试图找出企业在不同情况下的企业社会责任创新决策。

发现

作者发现，企业的企业社会责任创新动机关键取决于利他消费者的比例，以及溢出效应和偏好减少效应。很大一部分（小部分）利他消费者吸引（限制）领导者和追随者参与企业社会责任创新。更重要的是，当这个比例不是很大，而是保持在一个相对较高的水平时，CSR创新的潜在领导者可能不希望创新。因此，潜在的追随者可能是社会责任产品市场的垄断者。此外，作者在一个变异模型中重新检查了这一结果，在该模型中，领导者可以通过允许其在第 1 期或第 2 期进行创新，从而更加灵活地做出关于 CSR 创新的决定。作者证明，当利他消费者的比例落在中间范围内时，领导者可能希望将 CSR 创新推迟到第 2 期。在这种情况下，CSR 创新的领导者可能倾向于交易其先发优势与追随者的正面竞争，并阻止追随者从溢出效应中受益。此外，对企业社会责任创新的灵活选择为企业成为创新引领者带来了更大的主动性。

原创性/价值

几乎所有关于企业CSR创新决策的研究都是在同步移动的环境中进行的，这不适合描述真实的商业世界；许多证据表明，许多企业社会责任项目是按顺序而不是同时启动的。该理论在更现实的情况下确定了企业社会责任创新的几个重要因素，即企业社会责任创新的顺序性。溢出效应和偏好减少效应都对企业创新产品以承担社会责任的决策产生重要影响，这有助于现有的企业社会责任和战略决策文献。本文还阐明了在各种竞争情况下企业社会责任创新对管理的影响。