Our discussion of the costs of providing CSR attributes has revealed that embodying products with CSR attributes requires the use of additional resources, which results in higher costs. When considering the appropriate level of CSR characteristics, managers must make critical decisions regarding the optimal use of inputs that generate these attributes.4 Thus, a firm's cost of producing CSR attributes is positively related to the number of these characteristics. The cost function has the usual properties. First, it is monotonically increasing in CSR attributes; that is, it costs more to generate additional characteristics. Second, at some point there are increasing incremental costs of providing CSR , which results in a standard upward-sloping
supply curve for CSR attributes. The nature of
the supply of CSR attributes leads to the following hypotheses regarding the provision of CSR across industries and firms.