Corporate social responsibility (CSR) is often seen as separate from the pursuit of profit. Yet recent research by Prof. Ross Levine found that when faced with competition, companies double down on CSR as a profitable strategy. Levine also found that companies with higher CSR scores performed significantly better during the pandemic stock market turmoil.
Noted economist Laura D. Tyson, former Berkeley Haas dean and professor of the graduate school, hosted Levine for a discussion about his recent research finding that corporate social responsibility (CSR) is an effective competitive strategy.
“We discovered that increasing competition induces firms to increase CSR activities as a strategy for strengthening relationships with workers, suppliers and customers,” said Levine. “When firms are more monopolistic, they don’t have to worry about these kinds of relationships as much. But when they’re forced to deal with a more competitive environment, they have to embrace those relationships.”
Tyson is co-chair of Gov. Gavin Newsom’s Council of Economic Advisors (for this discussion, she did not speak on behalf of the council). She previously served as Chair of the President’s Council of Economic Advisers and Director of the White House National Economic Council for President Clinton. Levine is the Willis H. Booth Chair in Banking and Finance, and has worked at the World Bank and at the Board of Governors at the Federal Research System.
“New Thinking in a Pandemic: Business, Economics & Inclusion” is a twice-monthly series hosted by Berkeley Haas faculty to highlight cutting-edge, high-level thinking and analysis on a range of topics around business, economics, and equity during the coronavirus pandemic and beyond. The series is streamed live on YouTube, where viewers can ask questions via chat.