Corporate Provision of Public Goods

• 成果类型: Article
• 署名作者: Morgan, John; Tumlinson, Justin
• 署名单位: University of California System; University of California Berkeley; University of California System; University of California Berkeley; Loughborough University; University of Munich
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2018.3137
• 发表日期: 2019
• 页码: 4489-4504
• 关键词: Public goods; Corporate social responsibility; externalities

摘要

Milton Friedman famously suggested that firms ought not divert profits toward public goods because shareholders can better make these contributions themselves. Despite this, activist shareholders are increasingly successful in persuading firms to be socially responsible. We study firm behavior when shareholders care about public goods as well as profits and when managerial contracts reflect these concerns. Under these ideal conditions, managers redirect more profits toward public goods than shareholders would when acting separately-shareholders are poorer but happier. Further, so long as the public good is sufficiently desirable, the manager selects the socially optimal level of output, despite the mismatch between shareholder preferences and those of society at large.