Unproductive entrepreneurship: two sides to corporate social responsibility

Purpose The primary purpose of this research is to analyze the relationship between unproductive entrepreneurship and the improper use of corporate social responsibility (CSR) initiatives. The authors suggest that CSR is a mechanism fraudulently used by those who wish to gain economic benefits by raising the costs of doing business while simultaneously signaling to the business world that their company is trustworthy and concerned with social issues, not just generating profit for shareholders. Design/methodology/approach This research provides a critical analysis of the extant literature covering the opportunities for rent-seeking unproductive entrepreneurship created by the popularization of CSR initiatives. Findings There is a strong potential for CSR initiatives to inadvertently facilitate unproductive entrepreneurship. This occurs when companies exploit socially responsible initiatives for rent-seeking and revenue generation thereby failing to create meaningful value for society. Originality/value Scholarly examination of these initiatives has been generally laudatory. This research offers a different perspective and questions whether CSR, if improperly used, can lead to unproductive entrepreneurship. Furthermore, one of the most common assumptions in the literature is that firms undertake CSR to limit government regulation of markets. However, the relationship is more complex because corporations often seek to use the government to prevent and limit competition through regulation capture.