Corporate social responsibility learning in mergers and acquisitions. Issue 1 (2nd January 2022)

• Record Type: Journal Article
• Authors: Chen, Chong; Lu, Weijie; Liu, Min
• Is Part Of: Asia-Pacific journal of accounting & economics. Volume 29:Issue 1(2022)
• Page Start: 53
• Page End: 76
• Publication Date: 2022-01-02
• Subjects: Corporate social responsibility (CSR) -- spread -- mergers and acquisitions (M&As) -- learning; Accounting -- Periodicals; Accounting -- Pacific Area -- Periodicals; Economics -- Periodicals; Pacific Area -- Economic conditions -- Periodicals; 657
• DOI: 10.1080/16081625.2019.1680297
• Languages: English
• ISSNs: 1608-1625

Abstract

ABSTRACT: Using a large sample of mergers and acquisitions (M&As) in the U.S., we examine whether and how corporate social responsibility (CSR) spread between the target and acquirer affects firm value. We find that the stronger the target's CSR performance relative to the acquirer's, the higher the acquirer gains as well as synergy gains created by the acquisition. We also document acquirer's improvements in CSR performance and market performance following the acquisition of a target with higher CSR. Moreover, the positive effect of CSR spread on the acquirer is more pronounced when the target has stronger operating performance. Overall, we attribute the source of the value creation to acquirer's learning from the target's CSR practices and experiences.