Watchdogs of the Invisible Hand: NGO monitoring and industry equilibrium

Gani Aldashev; Michela Limardi; Thierry Verdier

doi:10.1016/j.jdeveco.2015.03.006

Watchdogs of the Invisible Hand: NGO monitoring and industry equilibrium

Gani Aldashev, Michela Limardi, Thierry Verdier

Centre of Research in the Economics of Development

Research output: Contribution to journal › Article › peer-review

Abstract

Globalization has been accompanied by rising pressure from advocacy non-governmental organizations (NGOs) on multinational firms to act in socially-responsible manner. We analyze how NGO pressure interacts with industry structure, using a simple model of NGO-firm interaction embedded in an industry environment with endogenous markups and entry. We explain three key empirical patterns in developing-country industries under activist pressure: the degree of exit under more intense activist pressure, the differential response of industries to NGO activism, and the general rise of NGO activism following globalization.

Original language	English
Pages (from-to)	28-42
Number of pages	15
Journal	Journal of Development Economics
Volume	116
DOIs	https://doi.org/10.1016/j.jdeveco.2015.03.006
Publication status	Published - 1 Sept 2015

Keywords

Globalization
Monopolistic competition
NGOs
Private regulation

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10.1016/j.jdeveco.2015.03.006

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abstract = "Globalization has been accompanied by rising pressure from advocacy non-governmental organizations (NGOs) on multinational firms to act in socially-responsible manner. We analyze how NGO pressure interacts with industry structure, using a simple model of NGO-firm interaction embedded in an industry environment with endogenous markups and entry. We explain three key empirical patterns in developing-country industries under activist pressure: the degree of exit under more intense activist pressure, the differential response of industries to NGO activism, and the general rise of NGO activism following globalization.",

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AB - Globalization has been accompanied by rising pressure from advocacy non-governmental organizations (NGOs) on multinational firms to act in socially-responsible manner. We analyze how NGO pressure interacts with industry structure, using a simple model of NGO-firm interaction embedded in an industry environment with endogenous markups and entry. We explain three key empirical patterns in developing-country industries under activist pressure: the degree of exit under more intense activist pressure, the differential response of industries to NGO activism, and the general rise of NGO activism following globalization.

KW - Globalization

KW - Monopolistic competition

KW - NGOs

KW - Private regulation

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JO - Journal of Development Economics

JF - Journal of Development Economics

ER -

Watchdogs of the Invisible Hand: NGO monitoring and industry equilibrium

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Keywords

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