Traditionally, Coase’s bargaining theory is used to explain the adoption of the CSR model by nonfinancial firms. According to this approach, researchers view firms producing negative externalities and the community as two antagonizing agents with diametrically opposing interests. Provided there is a minimum availability of social capital, firms adopt the social responsibility principle and share part of their profits with the community, through the Coasean bargaining process. Although these models contribute to the advancement of the literature, they do fail to explain the voluntary adoption of the CSR model by financial and nonfinancial firms. The objective of this paper is to better understand the current trend towards the voluntary adoption of the CSR model by financial and nonfinancial firms. It adapts the Williamson’s conceptual network framework to the context where firms prefer a non-regulated to a regulated environment. By introducing regulation as a constraint variable that governments could bring whenever the industry does not perform according to set standards, firms have the incentive to adopt voluntarily the CSR model to avoid regulation. In that sense, networks are grantors of -social licenses to firms that adopt the CSR principle.
