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BC3-UPV/EHU Seminars: On Fraud and Certification of Corporate Social Responsibility

June 13, 2014 @ 12:00 am - 1:00 pm

BC3-UPV/EHU Seminars
On Fraud and Certification of Corporate Social Responsibility

Dr. Carmen Arguedas
Departamento de Análisis Económico: Teoría Económica e Historia Económica, Universidad Autónoma de Madrid.


We analyze the strategic decision of firms to voluntarily certify corporate social responsibility (CSR) practices in a context where other firms can falsely pretend to besocially responsible. Equilibrium outcomes are crucially determined by consumers’ beliefs about the credibility of firms’ CSR claims, which depend in turn on the(expected) fines for fraud. First, we show that an increase in such fines extends the likelihood of firms investing in CSR, at the expense of a reduced likelihood ofcertification. Second, fraud only arises when the fines for fraud are at intermediate levels and some CSR firms do not certify their practices. Third, the presence of fraudcomes at a cost for firms by inducing lower equilibrium prices than in settings with honest marketing. Forth, the coexistence of fraud and certification inducesdifferentiation price premia below marginal production costs and certification price premia above marginal certification costs. Lastly, social welfare rises as fines for fraud increase.


Prof. Sanjay Sharma
Dean and Professor of Management, Grossman School of Business, University of Vermont, USA

Dr. Sanjay Sharma is the Dean of the Grossman School of Business at University of Vermont. Prior to Vermont, he was the Dean of the John Molson School of Business in Montreal and the Canada Research Chair in Organizational Sustainability. His expertise is in the area of helping organizations develop internal motivations and the capacity to reconcile their economic, social and environmental performance and generate competitive advantage via sustainable business models in developed and developing nation contexts. He is a pioneer in research on corporate sustainability and he has published eight books and over 60 articles on this topic. His publications are in journals such as Academy of Management review, Academy of Management Journal, Strategic Management Journal, Journal of Marketing, and Academy of Management Executive. His latest book “Competing for a Sustainable World” was a runner up for the Best book award at the Academy of Management in 2015 and he was awarded the “Distinguished Scholar Lifetime Achievement Award” by the Organizations and the Natural Environment Division of the Academy of Management in 2016. Before pursuing an academic career, Sanjay was a senior manager and CEO with multinational corporations for 16 years.

Lecturer´s personal webpage


Referenced papers

  • Sharma, S. 2014. Competing for a Sustainable World: Building Capacity for Sustainable Innovation. Greenleaf Publishing, UK. ISBN: 13:978-1-78353-224-7
  • Sharma, S. 2002. “What really matters: Research on corporate sustainability.” In Sharma, S. & Starik, M. (eds.) Research in Corporate Sustainability: The Evolving Theory and Practice of Organizations in the Natural Environment: 1-29.. Edward Elgar Academic Publishing, Northhampton, MA.

13th June 2014, 12:00, Faculty of Sarriko (Room B.08)

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June 13, 2014
12:00 am - 1:00 pm
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