Socially responsible firms and mergers and acquisitions performance: Australian evidence

Krishnamurti, Chandrasekhar and Shams, Syed and Pensiero, Domenico and Velayutham, Eswaran (2019) Socially responsible firms and mergers and acquisitions performance: Australian evidence. Pacific-Basin Finance Journal, 57 (Article 101193). pp. 1-16. ISSN 0927-538X


Abstract

This paper extends our knowledge of acquisition decisions by examining whether a firm's corporate social responsibility (CSR) activities influence Merger and Acquisition (M&A) deal characteristics, target choice and acquisition performance. Our empirical results reveal several new insights. First, we find that targets with CSR activities are more likely to be acquired by CSR-oriented bidder firms. Second, we also examine the deal characteristics of CSR firms and find that they choose deal features such as cash payment, domestic targets, and single bids. Third, we show that socially responsible firms are more likely to pay a lower bid premium when they pay for acquisitions. Finally, we find that the announcement period abnormal return is positive and significant when CSR-oriented bidding firms announce an acquisition decision in the market. Overall, we show that CSR firms make acquisition decisions which align shareholders with other stakeholders of the firm. Our results are robust to a number of alternative proxies and sensitivity tests.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Files associated with this item cannot be displayed due to copyright restrictions.
Faculty/School / Institute/Centre: Current - Faculty of Business, Education, Law and Arts - School of Commerce (1 July 2013 -)
Faculty/School / Institute/Centre: Current - Faculty of Business, Education, Law and Arts - School of Commerce (1 July 2013 -)
Date Deposited: 20 Jan 2020 01:16
Last Modified: 29 Jan 2020 00:40
Uncontrolled Keywords: corporate social responsibility; merger and acquisition
Fields of Research : 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150201 Finance
Socio-Economic Objective: B Economic Development > 90 Commercial Services and Tourism > 9001 Financial Services > 900101 Finance Services
Identification Number or DOI: doi:1016/j.pacfin.2019.101193
URI: http://eprints.usq.edu.au/id/eprint/36904

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