Does corporate social responsibility affect the achievement of performance commitment in valuation adjustment mechanism agreement? Evidence from Chinese listed company

Abstract

This paper examines the impact of acquirers' corporate social responsibility (CSR) on the fulfillment of performance commitment in valuation adjustment mechanism (VAM) agreement. PSM and logistic regression are mainly used in the analysis. We offer evidence that acquirers' CSR is crucial to the targets' commitment performance. Using 1473 samples of VAM agreement between 2010 and 2019 reveal that the acquirees who have signed the VAM agreements with the high CSR companies are more likely to fulfill the promised performance. This paper holds that in all CSR dimensions, shareholder responsibility has the most significant positive effect on the outcome. Also, excessive commitment performance will reduce the possibility of VAM agreement completion. Furthermore, performance commitment has a strengthening moderation effect on the link between CSR and VAM agreement. Overall, our results show that CSR matters for commitment performance in VAM agreement.