Corporate social and environmental responsibility: a mirage or a shift?

Summary This paper examines the economic determinants of corporate social and environmental responsibility (CSR) practices, i.e. the voluntary integration of environmental, social and governance factors into corporate strategy. We present the theoretical and empirical literature in a unified framework that explains the development of these CSR practices based on three categories of market imperfections: the existence of externalities and public goods, imperfect competition and incomplete contracts. We also examine the impact of CSR on social performance and welfare and identify avenues for future research.