| STAKEHOLDER PRESERVATION OR STAKEHOLDER APPROPRIATION? THE ROLE OF TARGET SOCIAL PERFORMANCE IN ACQUISITIONS |
Received:October 15, 2017 Revised:October 15, 2017 |
Key Words: acquisition, stakeholder relationship, stakeholder appropriation, stakeholder preservation, similarity |
| Author Name | Affiliation | | Li Tong* | Lee Kong Chian School of Business, Singapore Management University | | Jun Xia | Naveen Jindal School of Management, University of Texas at Dallas | | Heli Wang | Lee Kong Chian Business School, Singapore Management University |
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Abstract: |
| We examine how target stakeholders affect an acquirer’s economic gains. Using
a dataset of U.S. public firms from 1999 to 2011, we find that target CSR (corporate
social responsibility) has positive impacts on market reaction toward an acquirer around
the deal announcement date. Further, results show that CSR similarity strengthens the
positive relationship between target CSR and market reaction toward an acquirer,
whereas business similarity weakens this relationship. These results are more in
alignment with the stakeholder preservation view highlighting the importance of
protecting target stakeholders but challenge the view that an acquirer benefits from
appropriation toward target stakeholders. |
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