Date of Award

Spring 2016

Document Type


Degree Name

Doctor of Business Administration (DBA)



First Advisor

Son Le


In this dissertation, I investigate the impact that corporate social responsibility (CSR) engagement may have on post-acquisition performance outcomes. I argue that prospective targets are among the audiences that observe the firm's corporate social activities and make judgments out of the signals portrayed by such activity. With prospective targets being largely more successful than their counterparts, it stands to reason that they would prefer to be acquired by successful firms that would likely assure benefits in the long term. The socially responsible acquirer would likely be viewed as the more attractive suitor since the established moral and reputational capital present it as the more trustworthy partner in the deal. I contend that, all else equal, a quality target may prefer to be acquired by a socially responsible firm as the acquired firm can gain immediate access to the acquirer's reputational and moral capital benefits. Acquisition of such high quality targets is likely to lead to the attainment of synergies which could enhance post-acquisition performance.

I examine this issue by relying on literature on stakeholder theory and signaling theory in order to understand how firms could shape the perceptions of prospective quality targets in their favor, through engagement in corporate social responsibility. I explore entrepreneurial firms, family firms and top managers' ownership as potential moderators to the relationship. Further, I explore top management team retention and quality of target as mediators of the relationship between CSR and post-acquisition performance.

In testing the hypotheses, I rely on data from the Kinder, Lydenberg, and Domini (KLD) database, the Mergers and Acquisitions (M&A) module of the Securities Data Corporation's (SDC) database, Research Insight and S&P's Capital IQ databases, and the firms' filings with the SEC. The first major finding is that corporate social performance is generally associated with higher post-acquisition performance. I find a positive relationship between corporate social responsibility and financial performance measured by ROA. However, no significant performance results are found when performance is measured using total shareholder return, a market measure. The results provide support for the moderating effect of entrepreneurial firm status on the relationship between the acquirer's corporate social performance and the quality of target. The results also provide support for the mediating effect of the quality of target on the relationship between CSR and organizational performance.

This dissertation has important theoretical and practical contributions. First, this research extends prior CSR literature to the acquisitions context and shows that CSR engagement is associated with financial performance. It therefore establishes a stronger theoretical foundation for the relationship between corporate social performance and financial performance. Secondly, this study looks at prospective targets as additional stakeholders that rely on a prospective acquirer's CSR information to form impressions about potential acquirers. This study indeed finds that a firm's engagement in CSR is an important signaling mechanism through which prospective acquirers portray themselves as more trustworthy business partners to prospective quality targets. Additionally, prior M&A literature has primarily investigated performance phenomena from an acquirer's perspective. This study goes further and develops arguments from the target's perspective, arguing that the targets are a primary recipient of signals from prospective acquirers, and that they rely on information from such signals to make important decisions, like which acquirer would be most favorable in an acquisition deal.