| Summary: | 碩士 === 國立中正大學 === 財務金融系研究所 === 104 === Nowadays corporate social responsibility (CSR) has become a hot topic in management. While lots of studies focus on how firms engage in CSR in developed market, this thesis conduct a cross-sectional regression by examining the effect of CSR performance on the relation between acquirer’s cumulative abnormal return (CAR) and various determinants of M&A success in the emerging market.
The major findings are: 1) CSR involvement (environment and social ratings) alone do not have significant effect on CAR indicating that investors in emerging market possess possible agency concerns; 2) the larger market capitalism of acquiring firms reflects the lower abnormal market returns around announcement, indicating that investor expect managers from larger firms may do suboptimal decision on M&A investment. However, the size effect disappeared with CSR concerns, indicating that investors in emerging markets would expect large firms with higher degree of CSR involvement in environment issues are not likely to waste their free cash flow to do a suboptimal investment; 3) related transaction releases tunneling concerns in emerging market leading to negative effect of CAR, and that concerns is even stronger when the acquirers put lots efforts on social responsibility activities. However, when acquiring firms are from countries with better legal protection or in financial and high-tech industry with solider supervision, investors would be more likely to believe an acquiring firm with higher degree of CSR involvement may do propping instead of tunneling, and finally leading to positive effect of CAR.
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