The effect of target’s CSR performance on M&A deal premiums: a case for service firms

Ozgur Ozdemir (), Fatemeh Binesh () and Ezgi Erkmen ()
Additional contact information
Ozgur Ozdemir: University of Nevada Las Vegas
Fatemeh Binesh: University of Nevada Las Vegas
Ezgi Erkmen: Boğaziçi University

Review of Managerial Science, 2022, vol. 16, issue 4, No 3, 1034 pages

Abstract: Abstract In this study, we examine the effect of corporate social responsibility (CSR) performance on mergers and acquisitions (M&A) deal premiums. More precisely, we explore the value enhancing role of target’s pre-acquisition CSR performance at an M&A transaction by focusing on the deal premiums. We also examine whether firms in the service industries experience a higher deal premium due to their CSR performance compared to firms in other industries. We use several data sources (i.e. MSCI ESG KLD STATS, FactSet, Compustat and CRSP) to compile the final sample of the study, 277 completed acquisitions over the period 1996–2018. We use ordinary least square regression to estimate empirical models and find that target’s pre-acquisition CSR performance is positively related to deal premium. Moreover, the moderation analysis indicates that the positive effect of targets’ CSR performance on deal premium is more profound for firms operating in the service industries than those in non-service industries. The findings of the study is robust to different operationalizations of deal premium. Additionally, examining the positive and negative CSR attributes separately, we reveal consistent evidence with the prediction that positive CSR involvement of target firms increases the deal premium.

Keywords: Corporate social responsibility; Firm value; Acquisitions; Deal premium; Services; G30; G32; G34; M14 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11846-021-00471-y Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:rvmgts:v:16:y:2022:i:4:d:10.1007_s11846-021-00471-y

Ordering information: This journal article can be ordered from
http://www.springer.com/business/journal/11846

DOI: 10.1007/s11846-021-00471-y

Access Statistics for this article

Review of Managerial Science is currently edited by R. Ewert and W. Kürsten

More articles in Review of Managerial Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().