English, Article, Journal or magazine article edition: Can the threat of costly litigation be incentive enough for companies to engage in CSR? Dionisia Tzavara

User activity

Share to:
 
Bookmark: http://trove.nla.gov.au/version/196862
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Can the threat of costly litigation be incentive enough for companies to engage in CSR?
Author
  • Dionisia Tzavara
Physical Description
  • preprint
Notes
  • In 1970 Milton Friedman wrote "[t]he social responsibility of business is to increase profits" (p. 122). Today there are voices advocating that engaging in CSR is in the direction of increasing profits. It is also argued that engaging in CSR helps firms alleviate some of the risks associated with the uncertain environments in which they operate. This research aims to look at the question of whether the threat of costly litigation can provide an incentive to firms to engage in CSR. We built a model where a firm and an interested party engage in litigation. The firm operates in a market and earns profits and can engage in a level of CSR which will determine the probability that damage will be caused by the firm. An interested party affected by the damage claims compensation. The firm and interested party may settle out of court or the plaintiff may bring the case to court. We assume that besides damages, the firm's investment in CSR affects the plaintiff's probability of winning at trial. We find that investment in CSR reduces the amount of cases brought to court and at the same time increases the probability of a case settling out of court. We also find some ambiguity regarding the effect of CSR on settlement offers with the driving forces here being on the one hand the reduction in the probability of the plaintiff winning trial and the increase in the probability of settlement and the level of court costs on the other hand. We conclude that there is incentive for firms to invest in CSR in order to avoid costly litigation.
  • Corporate Social Responsibility, Litigation, Settlement, Incentives
  • RePEc:rsc:rsceui:2009/​23
Language
  • English
Contributed by
OAIster

Get this edition

Other links

  • Set up My libraries

    How do I set up "My libraries"?

    In order to set up a list of libraries that you have access to, you must first login or sign up. Then set up a personal list of libraries from your profile page by clicking on your user name at the top right of any screen.

  • All (1)
  • Unknown (1)
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.

User activity


e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this edition

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this version

Add a comment