Keywords: Corporate Social Responsibility (CSR), Mergers and Acquisitions (M&As), Employment.
JEL Classification: G34, M14, J21
학회소식
[2022년 5차 CAFM2022]Corporate Social Responsibility and Post-merger Labour Restructuring
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조회수 : 287
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2022-12-20
This paper examines how corporate social responsibility (CSR) and employment policies interact by studying post-merger labour restructuring decisions of acquirers with different CSR engagements. I find that acquirers with greater CSR performance are more likely to lay off employees in target firms. My findings are primarily driven by the Social component of the CSR rating. The negative relationship between acquirers’ social performance and post-merger employment (in targets) is more pronounced for targets in human-capital-intensive industries, targets that are more financially constrained, and deals or targets with more opportunities for eliminating redundancy. I further document a generally positive impact of acquirers’ social performance on target firms’ labour productivity, technical efficiency, and staff costs. These results are consistent with the cost-saving story that higher labour costs induced by the implementation of CSR policies decrease the optimal level of employment in acquired targets. Overall, my paper contradicts the argument that socially responsible firms are inconsistent with value maximisation and shows that they are managed to maximise shareholder interests by engaging in more post-merger labour restructuring.
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