Individual effects and complementarities-in-performance : The long-run impacts of CSR on an acquirer’s performance in cross-border mergers

Do an acquirer’s CSR scores impact its post-merger performance in the short and long run? How do relationships among individual CSR pillars affect merger performance? Analysing a global sample of cross-border merger data from 2002 to 2018, we find positive and significant effects of overall CSR, the environmental pillar, and the social pillar on changes in ROA and Tobin’s Q of acquirers during the three years following acquisitions. Furthermore, the governance pillar only impacts short-run ROA change. We found complementarities among the three pillars of CSR to attain performance synergy. The effects of CSR controversies are long-lasting and appear to affect both the operating performance and market value of acquiring firms negatively. Finally, the effects of CSR on post-merger performance are more profound in the long run. CSR has a much larger economic impact on post-merger market value than on the operating performance of acquirers