Key Points of Sustainability and CSR: Stakeholder Theory and the Theory of External Effects

  • Henry Schäfer
Part of the SpringerBriefs in Finance book series (BRIEFSFINANCE)


Based on the previous discussions of finance and capital market theory and their links to ethics and morality, a sketch of the pivotal role of the theory of external effects on many areas of corporate social responsibility and sustainability is presented. It is argued that the internalization of external effects in a globally integrated world faces severe shortcomings due to a governance vacuum in the enforcement of national laws and taxes. The upcoming paradigm of sustainable development together with corporate social responsibility in conjunction with stakeholder theory allows a civil society-based approach to cope with the challenges of external outcomes. Stakeholders and nongovernmental organizations are discussed as agents that could stimulate and even sanction firms to act sustainably. The threat to withdraw their licenses to operate or to co-operate plays a major role in this approach.


Corporate social responsibility Sustainable development External effects Coase theorem Pigou tax Governance vacuum Eco-efficiency License to operate 


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Copyright information

© The Author(s), under exclusive licence to Springer Nature Switzerland AG 2019

Authors and Affiliations

  • Henry Schäfer
    • 1
  1. 1.Institute of Business AdministrationUniversity of StuttgartStuttgartGermany

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