Does corporate social responsibility impact mergers & acquisition premia? New international evidence

Abstract

The goal of this paper is to examine the impact of CSR on M&A premia from both acquirers’ and targets’ perspectives. Using an international sample of 1,598 transactions for the acquirers’ perspective and 449 deals for the targets’ perspective conducted between 2003 and 2018, we find that neither acquirers’ nor targets’ CSR performance alone does significantly impact M&A premia. However, we find that the interaction of the acquirers’ governance quality and CSR performance negatively affects acquisition premia. This study provides new empirical evidence and supports the notion of Yen and André (2019) that the relationship between CSR and M&A premia is more complex than expected and cannot be fully explained by the shareholder or stakeholder theory alone.