Strategic corporate social responsibility of high-speed rail in China

This paper investigates the strategic corporate social responsibility (CSR) of a high-speed rail (HSR) firm when competing with an airline firm in a differentiated transportation market and the interactions with government environmental policies in the context of a Cournot–Bertrand comparison. We find that a standard CSR chosen by the government is lower under Cournot than that under Bertrand when both the marginal cost of HSR and product substitutability are low enough, while a voluntary CSR chosen by the HSR operator is always higher under Cournot than that under Bertrand. We also find that the voluntary CSR could be higher or lower than the standard CSR, depending on marginal costs, product substitutability, and competition modes. We then show that when the government imposes an environmental tax together with CSR activities, both the strategic CSR and environmental tax are always lower under Cournot than those under Bertrand. Finally, we show that equilibrium traffic volumes, ticket fares, consumer welfare, and social welfare are independent of competition modes with environmental tax. •China’s world-renowned high-speed rail (HSR) has become a global forerunner in terms of technology and size.•Corporate social responsibility (CSR) provides significant welfare implications for designing optimal policies.•The interaction between CSR of HSR and competition modes in a differentiated transportation market is vital in China.•A standard CSR chosen by the government can be lower under Cournot than that under Bertrand, while a voluntary CSR chosen by the HSR is always higher under Cournot than that under Bertrand.•The traffic volume, ticket fares, consumer welfare, and social welfare are independent of competition modes with environmental tax.