Affiliation:
1. Department of Resources Engineering National Cheng Kung University Tainan Taiwan
2. Department of Finance Minghsin University of Science and Technology Hsinchu County Taiwan
3. Department of Agroeconomics National Taiwan University Taipei City Taiwan
4. Department of International Business Southern Taiwan University of Science and Technology Tainan City Taiwan
Abstract
AbstractThis paper examines the environmental, social, and governance (ESG) requirements for an industry in an n‐oligopolistic model and investigates the relationship between the degree of industry concentration and the degree of ESG requirements. It is shown that the factors influencing the degree of ESG requirements include the number of firms, the elasticity of market demand, and the market concentration ratio. In the case of linear market demand, the degree of requirements is negatively affected by firm number only, regardless of the elasticity of market demand or market concentration ratio. In addition, the degree of ESG requirements is positively (negatively) related to the industry profit/concentration, when market demand is convex (concave). This paper demonstrates that the degree of ESG requirements is sensitive to firm number, market demand, and market concentration ratio and serves as a pragmatic reference for the government.