Beyond Profits: The Rise of Dual-Purpose Organizations and Its Consequences for Disclosure
40 Pages Posted: 17 Apr 2017
Date Written: April 16, 2017
Abstract
Recognizing the role and value of diverse stakeholders, firms pursing a "beyond profit" agenda are becoming increasingly common. This paper studies such hybrid entities - firms that value the profits they create as well as the surpluses generated for consumers - and details their implications for industry disclosure practices. The findings demonstrate that disclosure incentives are perturbed not just for the hybrid firms but also for traditional profit-maximizing rival firms, and information revealed can be both self-serving and altruistic. Accounting for production and information consequences, the paper then assesses whether an emphasis on consumer welfare that a hybrid entity brings can itself be a strategic ploy aimed at profit maximization, rather than merely a statement of goodwill.
JEL Classification: C72
Suggested Citation: Suggested Citation