CSR and the Global Market

The market has become increasingly globalised, in the sense that product and services are bought and sold in a global context. As value chains span over border, often several borders, regulating it becomes more difficult and a single state is not enough to ensure responsible business practise. This shows a need for other actors to help promote CSR, in the form of companies or international organisations,. Thus CSR work is perhaps even more important in the globalised world of today.

However, some countries with developing economies are critical to international CSR standards, for example India. In this case CSR is considered a concept developed and defined by developed countries and not fit for developing countries. In the global market place developing countries generally have their main advantage based on the low costs of labour, and by implementing a CSR standard this advantage is believed to diminish due to the cost of CSR. Therefore a standard giving companies importing from developing countries incentives to choose suppliers that are compliant with the standard, could give developing countries a disadvantage, at least at first. If this would force business out of the developing countries, investments would decrease and the standard of life would likely decrease; what would be beneficial for workers on the surface, could lead to adverse effects.


The (economic) reasons for CSR work are often stated by a few assumptions:
• Customers favour product and services by responsible companies
• Investors favour investments in responsible companies
• Potential employees would rather work in a responsible company
• Engaging the stakeholders of the business leads to larger opportunities for innovation
• Reduction of risks in regard to environment, labour and society

However, according to Knox and Maklan these assumptions seem to be hard to measure and the results so far seem to be ambiguous at best. To get a clear idea on the relationship between CSR and beneficial results further research is needed, in doing so new ways to measure and explore this issues need to be developed.

[The Firm] [CSR] [Corporate Social Responsibility] Share on Facebook

Emission rights

The main objective with emission rights is obviously to reduce green house gas emissions. This is as we all now an important objective. Also the emissions right are traded as a financial instrument. Except for the fact that skillful traders can make money on this; it has another interesting implication.

The emissions right and their costs gives companies and states incentives to make reductions of emissions where they are most cost efficient, in simpler words the reduction are carried out where they are the cheapest. For example if you can invest in X tons of carbondioxide reduction in China, you will not buy an emission right that costs more.

Currently European companies are making significatn proporttions of their emission reductions in development countries. These kind of investment gives them a type of emission right that is an alternative to regular emission rights.

Currently, a new period of emission right is beginning. In the previous period there was an abundance of emissions rights, meaning the value of them and the incentives for decreasal of emissions was low. For this period the number of emission rights have decreased, forcing a decreasel of emission from companies in countries bound by the Kyoto agreement. However, to make this a powerful tool there are three major players that need to sign the agreement USA, China and India. When these three have joined, the real decrease will come. For USA it looks hopeful if a democrat regime is elected. China and India will probably not sign the agreement anytime soon, my opinion is that they will focus on growth and let the environment come second (or not at all).

[Emissions] [Environment] [Market Economy] [Kyoto Agreement]


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Free Trade & Market economy

Basically there are many problems with giving foreign aid. The foreign aid is often short-sighted and not creating sustainable improvements. There need to be a shift from shipping food to developing countries to a foreign aid for a long term improvement. I am not saying catastrophy aid is not needed; it is very much needed. But an economy cannot be built around foreign aid.

The first mission should be free trade. The most efficient way for developing countries to develop is by letting them trade their goods with the rest of the world, without traid barriers. This will create an increased prosperity and incentives for technological development. Furthermore, the industrialized world needs to stop dumping goods in developing countries, destroying the domestic market and companies.

When this is done, important steps towards market economy have been taken. But this need to be followed up by creating a transparent and reliable market. This is the responsibility of the local government, creating the prerequisites for this development. The market economy will drive economical and technological development, thus reinforcing itself.

With the increased prosperity brought by the market economy, an efficient educational system need to be created. This is creating a workforce suited for jobs in a knowledge intensive industry and incentives for multinational companies to establish operations here.

This will create a growing educated middle class, which most probably will create a demand for democracy and decreased corruption. These systems, market economy and democracy, are reinforcing themselves and each other by their existence and interaction.

[Free Trade] [Market Economy] [Democracy] [Development]

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How red is the Red Dragon?

The Chinese dragon is moving, and the economy is growing on the brink of overheating. Is this the first economically succesful communist state?


This question needs two considerations. First is the economy succesful? I would say yes, with a but. Their is a backside of the economic growth, the environment is suffering, inequalities are growing and the considerations of human rights are far behind the west. However, I believe the growing middle class, the increased education levels and general increased prosperity will create a demand for democracy, sooner or later. And then comes another question will China resolve this peacefully and how will this change China?

So what about the communism? Well on the surface China is still a communist state, but it's moving towards what is could be described as a state-controlled market economy. There are private or publicly owned companies competing on the same market as large state-owned enterprises, such as PetroChina. The governing body of the Communist party has already removed some of the older traditionally communistic hardliners. This is a clear indication of a shift towards market economy. Furthermore, a recognition of the potential gains of foreign direct investment is spreading.

My describtion of China would be a market-driven authoritarian regime. Which in some senses might be a contradiction, but this is where China seems to be going. What the future hold for the Red Dragon is yet to be decided.

[China] [Communism] [Market Economy] [Democracy] [Future]