Chinese Financial Market Investors Attitudes toward Corporate Social Responsibility: Evidence from Mergers and Acquisitions

Zhang, Fang; Li, Minghui; Zhang, Meilan

doi:10.3390/su11092615

Cited by 14 publications

(15 citation statements)

References 40 publications

(81 reference statements)

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“…[15] found that high-CSR acquirers achieve higher M&A announcement return, greater post-M&A long-term operating performance growth, and positive long-term stock return. Similar viewpoint was also held by [14] who found that acquirers with low-CSR performance tend to obtain longer term abnormal returns.…”

Section: Literature and Hypothesissupporting

confidence: 71%

“…While prior M&A literature has looked into the impact of CSR on pre-and post-M&A corporate performance [14], M&A duration [15], choice of acquisition target [16,17] and shareholder value of the acquirer [14,15,18], and socially responsible companies are believed to have higher economic performance and firm value [5,6,8], whether and how the CSR performance of the acquirer and that of the target are valued during the acquisition process is a problem that remains unsettled.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

The Value of CSR in Acquisitions: Evidence from China

Dbouk

et al. 2021

Sustainability

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In this paper, we aim to test whether and how corporate social responsibility (CSR) is valued in merger and acquisition (M&A) transactions. Employing multiple regression and logistic regression methods to examine the CSR in China’s domestic M&A market from 2007 to 2018, we reveal the following: (i) acquisition targets with higher social performance can attain higher acquisition valuation, especially when the acquirers are also socially responsible; (ii) high-CSR acquirers are inclined to choose equity payments, while high-CSR acquisition targets prefer to be paid in cash; (iii) high CSR performance boosts M&A success rate. The findings are robust, due to adopting two-stage least squares method to tackle endogeneity, substituting variable measures and data sources, and winsorizing variables at high levels to eliminate outliers. The value of CSR in M&As possibly results from the role of CSR in reducing information frictions, agency concerns, and corporate risks and is primarily associated with activities which are friendly to suppliers, customers, shareholders, public welfare, and natural environment, as well as being higher in developed regions and irrelevant to corporate ownership and nature. The study is of vital significance to the valuation and decision making in M&A deals.

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Section: Literature and Hypothesissupporting

confidence: 71%

Section: Introductionmentioning

confidence: 99%

The Value of CSR in Acquisitions: Evidence from China

Dbouk

et al. 2021

Sustainability

View full text Add to dashboard Cite

show abstract

“…Data on CSR scores came from Hexun (HX) listed company's social responsibility report which is the first vertical financial portal website in China. The database provides financial information services as well as annual ratings for CSR strengths and concerns under several categories [70][71][72].…”

Section: Sample and Methodsmentioning

confidence: 99%

Corporate Social Responsibility and Organizational Resilience to COVID-19 Crisis: An Empirical Study of Chinese Firms

2020

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Resilience captures firm capability to adjust to and recover from unexpected shocks in the environment. Being latent and path-dependent, the manifestation of organizational resilience is hard to be directly measured. This article assesses organizational resilience of firms in the context of the COVID-19 pandemic with pre-shock corporate social responsibility (CSR) performance as a predictor that positively influences the level of organizational resilience to the external shock caused by the pandemic. We develop three theoretical mechanisms based on stakeholder theory, resource-based theory, reputation perspective and means-end chain theory to explain how CSR fulfillment in the past could help firms maintain stability to adapt to and react flexibly to recover from the crisis. We examine the relationship in the context of the systemic shock caused by COVID-19, using a sample of 1597 listed firms in China during the time window from 20 January 2020 to 10 June 2020. We find that companies with higher CSR performance before the shock will experience fewer losses and will take a shorter time to recover from the attack.

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“…Cash compensation requires the shareholders of the original bid purchased to pay cash to the listed enterprise. However, when the shareholders cannot provide so much cash, they will use the shares to compensate the listed enterprise through bottoming clauses [ 26 ]. In the way of equity compensation, the amount of consideration to be compensated needs to be divided by the unit price of the shares at the time of the M&A transaction to obtain the number of shares to be compensated.…”

Section: Methodsmentioning

confidence: 99%

Influence of the enterprise’s intelligent performance evaluation model using neural network and genetic algorithm on the performance compensation of the merger and acquisition parties in the commitment period

Luo¹,

Da²

2021

PLoS ONE

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The purpose is to study the performance compensation of the bid purchased during the mergers and acquisitions (M&A) process. An intelligent model of enterprise performance appraisal is built to analyze the performances of the acquired enterprises. First, the evaluation indicators of enterprise performance are selected from both financial and non-financial aspects. An enterprise performance appraisal model is established based on the neural networks and optimized by the factor analysis method and Genetic Algorithm (GA). The principal factors affecting enterprise performance are analyzed. Then the M&A parties’ performances during the M&A commitment period under the earnings compensation mechanism are analyzed quantitatively. Corresponding hypotheses and evaluation indicators are established. Mean test results and regression analyses demonstrate that the hypotheses proposed are valid under particular circumstances. Introducing the earnings compensation mechanism during the M&A process can improve the enterprise performance effectively so that the earnings forecasted in the commitment period are significantly higher than the historical profitability. Hence, the earnings compensation mechanism plays a positive role in guiding enterprise performance. Comparison with models proposed in previous research reveals that the output error ratio of the designed corporate performance evaluation model is 1.16%, which can effectively evaluate corporate performance. The above results provide a reference for studying the impact of the earnings compensation mechanism on enterprise performance during the M&A process.

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Chinese Financial Market Investors Attitudes toward Corporate Social Responsibility: Evidence from Mergers and Acquisitions

Cited by 14 publications

References 40 publications

The Value of CSR in Acquisitions: Evidence from China

The Value of CSR in Acquisitions: Evidence from China

Corporate Social Responsibility and Organizational Resilience to COVID-19 Crisis: An Empirical Study of Chinese Firms

Influence of the enterprise’s intelligent performance evaluation model using neural network and genetic algorithm on the performance compensation of the merger and acquisition parties in the commitment period

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