Pay for Being Responsible: The Effect of Target Firm’s Corporate Social Responsibility on Cross-Border Acquisition Premiums

Lu Qiao and Jianfeng Wu
Additional contact information
Lu Qiao: Business School, University of International Business and Economics, Beijing 100029, China
Jianfeng Wu: Business School, University of International Business and Economics, Beijing 100029, China

Sustainability, 2019, vol. 11, issue 5, 1-21

Abstract: This study examines the effect of a target firm’s corporate social responsibility (CSR) on its cross-border acquisition premium. Building upon the resource-based view and the institutional theory, we argue that the target firm’s CSR positively affect the cross-border acquisition premium, while institutional distance, cultural distance, and the number of fellow acquisitions moderate the above relationship. Hypotheses are tested in a sample of 252 cross-border acquisitions between 1991 and 2016. Empirical findings show that an acquirer is more likely to pay a higher acquisition premium when acquiring a socially responsible target firm; furthermore, such an effect weakens as institutional distance, cultural distance, and the number of fellow acquisitions increase. This study extends existing research on the importance of CSR as a strategic asset and sheds new light on the role of CSR played in the setting of cross-border acquisitions.

Keywords: corporate social responsibility (CSR); cross-border acquisition premium; resource-based view; institutional theory (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mdpi.com/2071-1050/11/5/1291/pdf (application/pdf)
https://www.mdpi.com/2071-1050/11/5/1291/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:5:p:1291-:d:210065

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().