Theses and Dissertations

How Mergers and Acquisitions Impact Corporate Social Responsibility

Date of Award


Document Type


Degree Name



Business Administration

Committee Chair

William E. Gillis, Ph.D.


Corporate Social Responsibility (CSR) is an important area of study due to the multiple positive firm outcomes associated with an effective CSR program. In addition, CSR has become a more high-profile topic due to recent events in the United States stemming from societal unrest in 2020 and beyond. Therefore, understanding the possible impacts on CSR from firm strategic decisions like mergers and acquisitions is important as well. Mergers and acquisitions are a fruitful venue for examining CSR because (a) mergers and acquisitions are consequential actions that are outside of the daily operations of the firm and have impacts on firm wealth, and (b) cooperation and trade-offs from the firm’s stakeholders is required to secure approval and successfully execute the transaction. This study’s objectives are two-fold. First, impacts to CSR, using Environmental, Social, and Governance (ESG) ratings as a proxy, from corporate merger and acquisition activity are examined to determine overall impacts as well as relative impacts to various categories of industries. Second, ESG pillar ratings, as well as total (ESG) ratings, are used to: (a) study the individual impact of the pillars on overall ratings, (b) examine relationships between CSR and firm performance, and (c) how ESG ratings have grown over time as well as which pillars have experienced the most growth in various industry categories. Using Difference in Differences (DID) statistical methodology, results indicate mergers and acquisitions act as a moderator to increase CSR in the combined company. xii Results indicate companies that completed a significant merger (i.e., $1 billion or greater) in 2019 saw their ESG ratings increase by 3.84 points in 2020 and 2021. This finding is explained by Stakeholder theory, which holds that firms must successfully address the implicit and explicit needs of their stakeholders to gain support and buy-in for firm plans. Thus, when firms undertake mergers or acquisitions, they must address their universe of stakeholders to be successful. In addition, results indicate that merged firms in non-environmentally sensitive industries experienced a greater increase in their CSR programs compared to environmentally sensitive industries. The Environmental Pillar was found to have contributed the most when examining the individual pillar impacts on total ESG scores via regression analysis. Interestingly, higher ESG scores (a proxy for successful CSR programs) were not found to be related to superior firm performance as examined through a regression analysis of a key firm financial performance ratio. Finally, ESG scores were found to have grown over the study period 2016-202. During this time, the Governance pillar grew the most for environmentally sensitive industries while the Environmental pillar experienced the greatest growth for environmentally non-sensitive industries. The study’s results contribute to our knowledge of how meaningful firm strategic actions like mergers and acquisitions impact CSR in the combined company. In addition, the study makes various methodological contributions via the statistical methods used, studying industry effects and further examining the effectiveness of ESG ratings as a proxy for CSR performance. These findings also present ample opportunity for future research.

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