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

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  • Fang Zhang

    (Faculty of Economics and Management, East China Normal University, Shanghai 200062, China
    Shanghai M&A Financial Research Institute ECNU, Shanghai 200062, China
    Central China Development Research Institute, Henan University, Kaifeng 475001, China)

  • Minghui Li

    (Faculty of Economics and Management, East China Normal University, Shanghai 200062, China
    Shanghai M&A Financial Research Institute ECNU, Shanghai 200062, China)

  • Meilan Zhang

    (Faculty of Economics and Management, East China Normal University, Shanghai 200062, China)

Abstract

As China’s economic development has shifted from quantitative growth to qualitative improvement, stakeholders have enforced stricter corporate social responsibility (CSR) requirements for listed companies. However, few studies have focused on companies and CSR in such developing economies. We used the CSR scoring system from Hexun Finance’s website to group Chinese listed companies according to their CSR scores. By comparing the effects of merger and acquisition (M&A) announcements on different CSR scores, we found that, first, the average abnormal return (AAR) response time of the low-CSR acquirers group was eight trading days, much longer than that of the medium-CSR (three trading days) and the high-CSR group (four trading days). Second, from five trading days before, and 15 trading days after the announcement date, the cumulative AAR (CAAR) of the acquirers in the low-CSR group was 0.270, much higher than those in medium- and high-CSR groups. Third, after considering the CSR scores for the two years prior to the M&A and controlling for other factors affecting the M&A, the CSR performance of the above-mentioned M&As was still negatively correlated with the M&A announcement effect. This point to the need for further studying CSR and M&A announcement effects for Chinese companies.

Suggested Citation

  • Fang Zhang & Minghui Li & Meilan Zhang, 2019. "Chinese Financial Market Investors Attitudes toward Corporate Social Responsibility: Evidence from Mergers and Acquisitions," Sustainability, MDPI, vol. 11(9), pages 1-20, May.
  • Handle: RePEc:gam:jsusta:v:11:y:2019:i:9:p:2615-:d:228785
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    References listed on IDEAS

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    6. Christoph Kayser & Henning Zülch, 2024. "Understanding the Relevance of Sustainability in Mergers and Acquisitions—A Systematic Literature Review on Sustainability and Its Implications throughout Deal Stages," Sustainability, MDPI, vol. 16(2), pages 1-44, January.
    7. Kun Li & Chaohua He & Wassim Dbouk & Ke Zhao, 2021. "The Value of CSR in Acquisitions: Evidence from China," Sustainability, MDPI, vol. 13(7), pages 1-21, March.

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