CSR spillover effects of corporate M&As by U.S. Acquirers

Abstract

ABSTRACT This study explores CSR spillover effects within industries experiencing mergers and acquisitions (M&As), focusing on the response of non-target firms to M&As led by high-level CSR acquirers. We examine whether the involvement of socially responsible acquirers in M&As affects the CSR strategies of industry peers not directly engaged in these deals. Through an analysis of publicly listed U.S. firms from 1995 to 2018, we discover that non-target firms increase their CSR engagement following acquisitions by high-level CSR acquirers. Additionally, we observe that this spillover effect on CSR engagement is significantly amplified in industries characterised by high levels of competition. Our findings shed light on the extensive impact of M&As on CSR practices across industries, emphasising the importance of CSR spillover in influencing CSR activities industry wide.