dc.description.abstract | In this dissertation, we analyze the optimal pollution tax when the firm pays attention to Corporate Social Responsibility (CSR) when the government taxation for environment. Assume there are two firms in the final goods market, one is from home country, and the other from foreign country. There are two firms in the intermediate goods market, one is Environment Corporate Social Responsibility (ECSR) firm, and the other is profit-maximizing firm.
We show the more ECSR firm pays attention to CSR, the lower the optimal pollution tax, but the lower intermediate goods and final goods. Reduction of final goods make final goods firms’ profit and consumer surplus decrease, but foreign firm’s profit increases. When The more ECSR firm pay attention to CSR, the other firms earn more profit in the market.
We show the the vertically integrated firms model in this dissertation. When the home country firm’s cost more than foreign country firm’s cost, the optimal pollution tax in the intermediate goods model lower than in the vertically integrated firms model. For one thing, the more ECSR firm pay attention to CSR, the lower pollution in the country. For another, government will subsidy intermediate good firms to fix market incomplete problem. When government take optimal pollution tax, the more ECSR firm pays attention to CSR, social welfare not necessarily bigger. When government take optimal pollution tax, social welfare in intermediate good firms model smaller than social welfare in vertically integrated firms model.
We introduce many advantage of CSR, like reducing pollution, increasing social welfare. If the government can conduct the firms to CSR activities, it will be able to make up the difficulty of government pollution tax. | en_US |