The Corporate Social Responsibility is just a twist in a M\"obius Strip

TL;DR

This paper introduces a novel geometrical model inspired by the M"obius strip to analyze the complex effects of Corporate Social Responsibility on firm efficiency, highlighting conditions under which CSR investments are beneficial.

Contribution

It proposes a new cost function based on a M"obius strip analogy to incorporate cross-sector cooperation and stakeholder loyalty in CSR analysis.

Findings

CSR investments can be advantageous depending on sector number and stakeholder sensitivity.

The model indicates conditions where CSR activities are always beneficial.

A new analytical method linking physical geometry to economic CSR analysis.

Abstract

In recent years economics agents and systems have became more and more interacting and juxtaposed, therefore the social sciences need to rely on the studies of physical sciences to analyze this complexity in the relationships. According to this point of view we rely on the geometrical model of the M\"obius strip used in the electromagnetism which analyzes the moves of the electrons that produce energy. We use a similar model in a Corporate Social Responsibility context to devise a new cost function in order to take into account of three positive crossed effects on the efficiency: i)cooperation among stakeholders in the same sector, ii)cooperation among similar stakeholders in different sectors and iii)the stakeholders' loyalty towards the company. By applying this new cost function to a firm's decisional problem we find that investing in Corporate Social Responsibility activities is ever convenient depending on the number of sectors, the stakeholders' sensitivity to these investments and the decay rate to alienation. Our work suggests a new method of analysis which should be developed not only at a theoretical but also at an empirical level.