This paper develops and tests a model in which 1) purpose-driven firms emerge as an optimal organizational form even for profit-maximizing entrepreneurs; and 2) CSR arises endogenously as a response to imperfect regulatory oversight. Purpose-driven organizations allow entrepreneurs to create...

We examine optimal information flows between a manager and a worker who is in charge of evaluating a parameter of interest, e.g. the value of a project. The manager may possesses information about the parameter, and, if informed, may divulge her information to the worker. We show that...