John Maxwell

• Lyon, T.; Delmas, M.; Maxwell, J.; Bansal, P.; al., E., 2018, "CSR Needs CPR: Corporate Sustainability and Politics", California Management Review, August 60(4): 5 - 24.
  Abstract: Corporate sustainability has gone mainstream, and many companies have taken meaningful steps. Yet global environmental indicators continue to worsen. Corporate political actions such as lobbying can have great impact on environmental protection, yet are ignored in most current sustainability metrics. It is time for these metrics to be expanded to critically assess firms based on the sustainability impacts of their public policy positions. To enable such assessments, firms must become as transparent about their corporate political responsibility (CPR) as their corporate social responsibility (CSR), and rating systems must demand such information from firms and include evaluations of corporate political activity.

  Link(s) to publication:

  http://journals.sagepub.com/doi/10.1177/0008125618778854

  http://dx.doi.org/10.1177/0008125618778854

• Lyon, T. P.; Maxwell, J., 2008, "Corporate Social Responsibility and the Environment: A Theoretical Perspective", Review of Environmental Economics and Policy, July 2(2): 240 - 260.
• Maxwell, J.; Decker, C. S., 2006, "Voluntary Environmental Investments and Responsive Regulation", Environmental & Resource Economics, April 33(4): 425 - 439.
  Abstract: Instances of corporate voluntary environmental investments have been rising in recent years. Motivations for such activities include corporate image building, regulatory preemption, and production cost savings. While some of these investments arise from industry attempts to set environmental standards where none currently exist, many investments seem to be aimed at reducing the costs of complying with existing regulations. Using a simple gametheoretic model, we investigate firm motivations for, and welfare consequences of, these types of voluntary investments by focusing on the role regulatory enforcement might play. We find that such investments unambiguously increase when an enforcement regulator acts as a Stackelberg follower (a regulatory structure we refer to as responsive regulation) in setting its monitoring and enforcement strategy. These additional investments may be socially undesirable, necessitating a restructuring of non-compliance penalties.
• Maxwell, J.; Reuveny, R., 2005, "Continuing Conflict", Journal of Economic Behavior and Organization, September 58(1): 30 - 52.
  Abstract: A relatively small but growing literature in economics examines conflictive activities where agents allocate their resource endowments between wealth production and appropriation. To date, their studies have employed a one period, static game theoretic framework. We propose a methodology to extend this literature to a dynamic setting, modeling continuous conflict over renewable natural resources between two rival groups. Investigating the system's steady states and dynamics, we find two results of general interest. First, Hirshleifer's 'paradox of power' is self-correcting. Second, if productive activities cause damage to disputed resources, the introduction of a small amount of conflictive activity enhances social welfare.
• Heyes, A.; Maxwell, J., 2004, "Private vs. Public Regulation: The Political Economy of the International Environment", Journal of Environmental Economics and Management, September 48(2): 978 - 996.
  Abstract: Minimum standards set by a World Environmental Organization' (WEO) and NGO labelling are promoted as alternative approaches to international environmental protection. We explore the potential inter-play between these two approaches when the WEO is subject to pressure from producers. We find that if WEO and NGO schemes are mutually exclusive then the existence of an NGO alternative' increases industry resistance to WEO proposals and this may reduce welfare. If, however, the schemes are run in parallel, existence of the NGO lessens producer opposition to WEO activities. This allows the WEO to be bolder' in its proposals, which is good for welfare.
• Lyon, T. P.; Maxwell, J., 2004, "Astroturf Lobbying", Journal of Economics & Management Strategy, March 13(4): 561 - 597.
• Lyon, T. P.; Maxwell, J., 2003, "Self-Regulation, Taxation and Public Voluntary Environmental Agreements", Journal of Public Economics, August 87(7-8): 1453 - 1486.
  Abstract: An increasingly popular instrument for solving environmental problems is the public voluntary agreement (VA),' in which government offers technical assistance and positive publicity to firms that reach certain environmental goals. Prior papers treat such agreements as a superior, low-cost instrument that can be used to preempt a threat of traditional, inefficient, regulation. We present a more general model in which public VAs may instead be weak tools used when political opposition makes environmental taxes infeasible. We explore the conditions under which taxes, public VAs, and unilateral industry actions are to be expected, and the welfare implications of the various instruments. Notably, we also show that welfare may be reduced by the introduction of public VAs.
• Sun, Q.; Maxwell, J., 2002, "Deficits, Empty Individual Accounts, and Transition Costs: Restructuring Challenges Facing China's Pension System", Journal of Insurance Issues, September 25(2): 103 - 126.
  Abstract: Driven by the twin pressures of economic reform and an aging population, China began to reform its pay-as-you-go (PAYG) pension system in the mid-1980s. In 1997, the Chinese government issued a document to formally establish a new, partially funded pension system for urban workers. The new system, featuring a social pooling account and individual accounts, was developed with the joint goals of equity and efficiency in mind. To date, however, the system has failed to achieve these goals. Individual accounts are currently in debt and are accumulating mounting annual deficits. The same is also true of the social pooling account. This paper identifies four major drivers behind the system's current problems - namely, rapid growth in the number of retirees, the economic decline of the State sector, a decline in payroll tax collection rates, and underreported wage levels. The linkages between these drivers and the costs arising from the transition from the PAYG system to the partially funded system are then examined. On the basis of this analysis, several recommendations designed to ensure that the new system achieves its goals are developed and analyzed.
• Reuveny, R.; Maxwell, J., 2001, "Conflict and Renewable Resources", Journal of Conflict Resolution, December 45(6): 719 - 742.
  Abstract: The economic literature on conflict employs a static, game-theoretic framework developed by Jack Hirshleifer. The authors introduce conflict dynamics into a model with two rival groups, each dependent on a single contested renewable resource. The model is based on two stylized facts: conflict often arises over scarce renewable resources, and those resources often lack well-defined andor enforceable property rights. In each period, groups allocate their members between resource harvesting and resource appropriation (or conflict) to maximize their income. This leads to a complex nonlinear dynamic interaction between conflict, the two populations, and the resource. As developed, the model relates most closely to conflict over renewable resources in primitive societies. The system's global dynamics are investigated in simulations calibrated for the historical society of Easter Island. The model's implications for contemporary lesser developed societies are examined.
• Maxwell, J.; Lyon, T. P.; Hackett, S. C., 2000, "Self-regulation and Social Welfare: The Political Economy of Corporate Environmentalism", Journal of Law & Economics, October 43(2): 583 - 618.
  Abstract: We extend the economic theory of regulation to allow for strategic self-regulation that preempts political action. When political "entry" is costly for consumers, firms can deter it through voluntary restraints. Unlike standard entry models, deterrence is achieved by overinvesting to raise the rival's welfare in the event of entry. Empirical evidence on releases of toxic chemicals shows that an increased threat of regulation (as proxied by increased membership in conservation groups) indeed induces firms to reduce toxic releases. We establish conditions under which self-regulation, if it occurs, is a Pareto improvement once costs of influencing policy are included.
• Lutz, S.; Lyon, T. P.; Maxwell, J., 2000, "Quality Leadership when Regulatory Standards are Forthcoming", Journal of Industrial Economics, September 48(3): 331 - 348.
  Abstract: In many markets, governments set minimum quality standards while some sellers compete on the basis of quality by exceeding them. Such quality leadership strategies often win public acclaim, especially when they involve environmental attributes. Using a duopoly model of vertical product differentiation, we show that if the high-quality firm can commit to a quality level before regulations are promulgated, it induces the regulator to weaken standards, and welfare falls. Our results raise doubts about the social benefits of corporate self-regulation, and highlight the dangers of lengthy delays between legislative mandates for new regulations and their implementation.
• Lehr, C.; Maxwell, J., 2000, "Comparative Advantage, Trade, and Transboundary Pollution", Open Economies Review, July 11(3): 205 - 227.
  Abstract: It is common for studies on trade and environment issues to model trade patterns as driven by environmental considerations. Under conditions of trade liberalization, these studies predict the rise of pollution havens and an increase in global pollution. The extant empirical literature, however, gives only mixed support at best for the notion that trade patterns are influenced by environmental issues. We develop a simple model to investigate whether trade based on traditional comparative advantage may lead to increased global pollution. We find that trade may lead to increased global pollution if both trading nations exhibit increasing marginal disutilities of pollution.
• Maxwell, J.; Reuveny, R., 2000, "Resource Scarcity and Conflict in Developing Countries", Journal of Peace Research, May 37(3): 301 - 322.
  Abstract: As time passes, renewable resource scarcities are becoming more common. There is increasing evidence that these scarcities are a causal factor in political conflict, especially in developing countries. We present a simple dynamic model of renewable resource and population interaction featuring the possibility of conflict triggered by per capita resource scarcity. In the model, conflict diverts resources away from resource harvesting, increases the death rate, and damages the resource. The two former effects may speed the return to a peaceful steady state. If conflict results in resource destruction, however, it may destabilize the system, leading it towards collapse. Conflict due to renewable resource scarcity could be cyclical, implying recurring phases of conflict. However, such conflict cannot last for ever. We use the model to examine various policy scenarios concerning population control and technical innovations in harvesting and natural resource growth. A key insight of the model is the importance of the bidirectional interplay between conflict and resource scarcity, as opposed to the unidirectional notion that resource scarcity leads to conflict. As such, the model points to the need for the use of simultaneous equation econometric models in empirical investigations of resource scarcity and conflict.
• Lyon, T. P.; Maxwell, J., 1999, "Corporate Environmental Strategies as Tools to Influence Regulation", Business Strategy and Environment, May 8(3): 189 - 196.
  Abstract: Corporate environmental initiatives have been attributed to a variety of different motives, including cost-cutting, marketing to green' consumers willing to pay extra for environmentally friendly products, and shaping future government regulation (including the possible preemption of regulation). Understanding what really motivates corporate environmentalism is important for policymakers, since the effectiveness of government environmental policies depends in large part on how corporations will respond to them. We focus on the welfare implications of two alternative strategies firms may use to shape government regulations: (i) attempting to preempt future legislation altogether or (ii) failing this, to soften the impact of new laws by inducing regulators to set relatively weak standards. We show that while the first sounds threatening to social welfare, it produces political cost savings that outweigh any weakening of environmental performance. The second motivation, however, raises corporate profits, but not by enough to outweigh the resulting loss of environmental quality.
• Reuveny, R.; Maxwell, J., 1998, "Free Trade and Arms Races", Journal of Conflict Resolution, December 42(6): 771 - 803.
  Abstract: To examine the effect of free trade between two potential political rivals on their respective accumulation of weapons, the authors use a model in which utility maximization, the economics of trade and comparative advantage, production of weapons and consumption goods, depreciation of weapons stocks, technological spillover from production to national security, and the accumulation of capital are represented in an infinite horizon setting. In a neoclassical two-goods model of trade, each actor specializes in producing the good of its comparative advantage and engages in trade. Each country derives positive utility from consumption and its own stock of weapons. The impact of the foreign country's weapons stock on the home country's utility is negative (in the case of rivals). The authors use dynamic optimization to show that whether free trade leads to a rise or a decline in each country's stock of weapons relative to no trade depends on the relative marginal utilities of the consumption goods and weapons.

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