Cross-border mergers and acquisitions, regional cultural diversity and acquirers’ corporate social responsibility: Evidence from China listed companies

Abstract

Despite the abundant research on the effect of cross-border mergers and acquisitions (M&As), very few studies examined the effect of M&As on acquirers' corporate social responsibility (CSR), especially in the context of emerging economies. We used data of Chinese listed enterprises and the difference-in-differences (DID) approach to examine the effect of cross-border M&As on the CSR of Chinese acquirers. The results show that cross-border M&As have a positive and significant impact on Chinese acquirers’ CSR as well as four detailed dimensions of CSR (Corporate Governance, Employee Relations, Environment Protection, and Product). In addition, we use two indicators, the number of dialects and the proportion of the population using dialects in a particular region, to measure the regional cultural diversity. The results show that the positive relationship between overseas M&As and CSR is strengthened by higher cultural diversity in the region. Moreover, the positive effect of the aforementioned four dimensions of CSR is also stronger when the cultural diversity is more substantial.