How does corporate social responsibility affect merger and acquisition performance? Open Access

Mergers and acquisitions (M&A) constitute an important strategy for enterprises to achieve capital expansion and change their development models (Song et al., 2021). According to a report by PricewaterhouseCoopers, the total value of M&A transactions in China reached a record US$733.8bn in 2020, and the number of M&A transactions reached a record 12,790 in 2021. However, the continuous surge in M&A activity will not necessarily lead to increased enterprise value creation (Hussain et al., 2022). Corporate social responsibility (CSR) requires enterprises to balance profitability, social responsibility and environmental responsibility in their operations (Elkington, 1998). Especially for enterprises keen to fulfill their CSR commitments, how they effectively convert their efforts into M&A value creation is a key consideration (Cho et al., 2021).

There is extensive research on the relationship between CSR and enterprise performance, which is mainly categorized as positive (Nguyen et al., 2021; Ang et al., 2022), negative (Babalola, 2012; Elouidani and Zoubir, 2015), U-shaped (Nollet et al., 2016; Franco et al., 2020) and neutral relationships (Mcwilliams and Siegel, 2000; Adamkaite et al., 2023). The lack of academic consensus around this relationship requires deeper contextual discussions, and the high-pressure, high-risk scenarios of M&A can amplify the effects of CSR. Most studies on CSR and M&A performance have been conducted from the stakeholder theory perspective. Some study the relationship between CSR and shareholder value creation (including M&A synergies) from the perspective of target enterprises (Cho et al., 2021; Chen et al., 2022), while other focus on the relationship between CSR and M&A performance (including M&A announcement returns) from the perspective of acquirers (Deng et al., 2013; Qiao et al., 2018). To summarize, while scholars have begun to address CSR issues in M&A contexts, research on the relationship between CSR and M&A performance remains scarce, particularly regarding the underlying mechanisms of this influence, which have yet to be adequately elucidated.

In conclusion, CSR activities involve multiple stakeholders inside and outside the enterprise and require comprehensive consideration of each stakeholder’s interests to achieve sustainable development. Therefore, based on stakeholder theory, we study the relationship between CSR and M&A performance, construct a moderated mediation model and conduct a multiple regression analysis with a sample of 990 Chinese enterprises’ announced M&A events from 2008 to 2016. Through these efforts, we try to answer the following three questions:

The main theoretical contributions are two. First, the study verifies the relationship between CSR and M&A performance. Studies on the factors influencing M&A performance focus on corporate governance, cultural differences, knowledge integration, etc. This analysis enriches the research on the factors influencing M&A performance from the perspective of CSR. Specifically, even though it is based on the acquirer’s perspective, it supports the views of Chen et al. (2022) and Cho et al. (2021), who adopt the target enterprise’s perspective. This further confirms the research of Qiao et al. (2018), who found that the acquirer’s CSR plays a positive role in M&A performance. However, this study reveals that not only is there a direct relationship between the two, but also a moderated mediating mechanism exists.

Second, the research deepens the study of the conduction mechanism. This study constructs a moderated mediation model grounded in stakeholder theory to explore the complex mechanisms linking CSR, goodwill, economic policy uncertainty (EPU) and M&A performance. While legitimacy theory and resource-based theory explain why enterprises undertake CSR (i.e. legitimacy and resource motives), the stakeholder theory framework elucidates why they do so (i.e. economic, ethical and social motives). The mediating role of goodwill demonstrates that CSR’s value creation is achieved through concrete economic mechanisms: by mitigating information asymmetry and providing legitimacy that shapes stakeholders’ perceptions and reduces transaction costs. The moderating effect of EPU indicates that CSR, as a strategic asset, does not possess constant value. Instead, it functions as a trust-building vehicle and a risk-mitigation tool that becomes increasingly necessary – and its value more pronounced – in markets characterized by greater information ambiguity and higher risk.

CSR refers to society’s expectations of an enterprise’s economic, legal, moral and discretionary conduct over a given period (Carroll, 1979). Actively fulfilling CSR will provide core strategic resources to enterprises and help them to obtain legitimacy (Scherer and Palazzo, 2007). In addition, CSR plays an important signaling role and is a strong indicator of enterprise success (Dhaliwal et al., 2011). More importantly, CSR is a crucial component of successful M&A, as it enhances corporate value creation by generating reputational capital. For example, Anta Group is a Chinese sports goods company specializing in athletic equipment. Since its establishment, it has consistently participated in CSR activities, such as donations for major natural disasters. Anta’s long-standing commitment to proactive CSR principles played a crucial role in the acquisition of Fila. From the formulation of the acquisition strategy to post-acquisition integration, actively embracing CSR helped balance the interests of all parties involved, ultimately achieving excellent integration outcomes and improved M&A performance.

Based on the stakeholder theory, an enterprise is an organization composed of interdependent stakeholders (Parmar et al., 2010). Enterprises actively undertaking CSR can gain stakeholder support, thus increasing shareholder wealth and enterprise value. Specifically, M&A serves as an important channel through which CSR influences shareholder wealth, meaning that acquirers with higher CSR levels can bring greater benefits to stakeholders (Deng et al., 2013). On the one hand, fulfilling CSR is conducive to obtaining legitimacy from the target enterprise’s stakeholders (Chen et al., 2023), increasing trust between both parties (Li et al., 2022) and reducing the hostility of the target enterprise’s stakeholders and M&A uncertainty (Arouri et al., 2019). Failing to do so may lead to employee turnover and diminish corporate value (Deng et al., 2013). On the other hand, fulfilling CSR is a reputational signal for enterprises (Li and Wang, 2023), which conveys the willingness of enterprises to behave altruistically, which can mitigate the information asymmetry that leads to target enterprises’ “adverse selection” (Cho et al., 2013), thereby reducing potential risks in M&A transactions (Ozdemir et al., 2022), and effectively reducing conflicts of interest among stakeholders, facilitating the swift completion of M&A integration (Deng et al., 2013). Acquirers with strong CSR not only transfer implicit knowledge on how to handle stakeholders to the target enterprise but also enhance their own CSR capabilities through the target enterprise (Qiao et al., 2018). CSR facilitates the realization of M&A synergies, thereby enhancing corporate value creation. Therefore, CSR fulfillment can gain support from key groups of target enterprises, enhance cultural identity, reduce friction in M&A transactions (Arouri et al., 2019), save transaction costs, leverage M&A synergies and enhance value creation in M&A.

In conclusion, CSR is an intangible resource that can enhance enterprises’ competitive advantage (Ozdemir et al., 2022). When the acquirer’s CSR performance is stronger, it can win stakeholder support for M&A activities (Arouri et al., 2019). For example, strong organizational commitment to employees brings more human capital, and CSR practices increase consumers’ willingness to purchase and pay higher prices for products and services. Additionally, this commitment facilitates obtaining financial support from investors and policy support from the government. Therefore, the following hypothesis is proposed:

Goodwill originates from enterprise M&A and is a rational expectation for the synergistic effect of M&A, which manifests as unrecognizable intangible assets generated by M&A (Peng et al., 2022). Although goodwill is defined in accounting standards as the difference between merger costs and the fair value share of the target enterprise’s identifiable net assets, its economic substance is far from a passive accounting allocation. In essence, enterprises pay higher M&A premiums to obtain excess returns from M&A synergies, reflecting the potential value and future benefits (Golden et al., 2018). To optimize resource allocation and improve enterprise performance, enterprises need to pay costs in property rights transactions, i.e. goodwill is the compensation for the target enterprise to transfer the remaining claim rights (Zheng et al., 2014).

According to the stakeholder theory, irresponsible CSR harms enterprise stakeholders (Golden et al., 2018), thereby altering corporate goodwill assets. As one of the important stakeholders in the enterprise, corporate managers have the discretion to evaluate goodwill (Masters-Stout et al., 2008). Managers of enterprises with poor CSR performance are more likely to have opportunistic behavior (Kim et al., 2012), which directly leads to excessive M&A transaction premiums, i.e. overvaluing goodwill assets for personal gain (Golden et al., 2018). For target companies, CSR can mitigate information asymmetry and thereby influence corporate goodwill. Acquirers with high CSR are perceived as more trustworthy partners (Dhaliwal et al., 2011), reducing information asymmetry with target companies. This makes targets more willing to transact at fair prices, thereby lowering the “trust premium” acquirers must pay. For other stakeholders, CSR can influence corporate goodwill by providing legitimacy. CSR provides acquirers with strong legitimacy credentials (Suchman, 1995), facilitating faster regulatory approvals, community support and employee acceptance. This mitigates non-market frictions in M&A, reduces transaction uncertainty and lowers future integration costs. In short, good CSR can curb managers’ self-serving behavior, mitigate information asymmetry and provide legitimacy. This fosters more efficient and credible synergistic expectations while reducing corporate goodwill.

Goodwill also affects enterprises’ M&A performance. On the one hand, the greater the goodwill, the fewer scarce resources are used to enhance product-market competitiveness (Wei and Zhu, 2019). This leads to negative evaluations by banks and upstream and downstream enterprises in the industrial chain, reduces the resources available for future operations and increases costs (Li, 2021), thus affecting the enterprise’s future development (Wei and Zhu, 2019). In addition, excessive goodwill implies a higher M&A premium, which hinders the realization of M&A synergies (Fu et al., 2013) and aggravates the enterprise’s future operational burden (Wei and Zhu, 2019). This may lead to strategic mistakes and over-investment of limited resources in M&A integration, resulting in a tight capital chain (Li, 2021), missed investment opportunities and harm to M&A performance (Wei and Zhu, 2019).

In sum, strong CSR implies reduced opportunistic behavior by acquiring managers in overvaluing goodwill assets, lower information asymmetry and enhanced legitimacy. When the target enterprise recognizes the acquirer’s sincerity about their responsibility, it is more willing to transfer equity at a fair price instead of demanding a high M&A premium, i.e. the better the CSR performance, the fewer goodwill assets. However, when the goodwill assets are fewer, the acquirer has sufficient resources to invest in the production and operation of the enterprise, the capital chain is more secure and the rare resources of the enterprise can be effectively utilized in various investment behaviors, thereby fostering more favorable development for post-merger enterprises. Based on this, the following hypothesis is made:

EPU refers to the uncertainty about whether the government will change its original economic policy or adopt a new one now or in the foreseeable future (Gulen and Ion, 2016). It mainly includes uncertainty arising from policy changes, uncertainty during policy implementation and the possibility that the government will change its policy stance. EPU increases the uncertainty risk of the external environment faced by enterprises, leading to fluctuations in future earnings and causing uncertainty about future cash flows (Duong et al., 2020).

Based on the stakeholder theory, financial institutions such as banks play an important role as external stakeholders of enterprises. To reduce the risk of EPU, financial institutions establish stricter loan agreements to restrict the use of funds (Francis et al., 2014), and the number of external loans is also reduced (Hu and Gong, 2019), resulting in insufficient liquidity within the enterprise. Specifically, when the EPU is high, enterprises face greater financing constraints (Ma and Hao, 2022). Insufficient support from external stakeholders, such as financial institutions, means that enterprises need to invest more human and material resources to raise funds. This leads to more external financing costs for enterprises and further increases their financial pressure (Francis et al., 2014). Excessive goodwill can tie up corporate capital, and when compounded by the financing constraints imposed by EPU, it becomes even more challenging for enterprises to improve M&A performance without adequate funding. In addition, EPU also increases the degree of information asymmetry and the uncertainty of M&A synergies (Bonaime et al., 2018). In other words, as EPU increases, the synergistic effects of goodwill become harder to achieve, and M&A performance deteriorates. Based on this, the following hypothesis is proposed:

Based on the above analysis, we find that CSR can improve M&A performance, and goodwill plays a mediating role between the two. We also find that EPU enhances the relationship between goodwill and M&A performance. Thus, we ask, is there a correlation between these variables? Therefore, we believe there is a moderated mediating effect, i.e. EPU moderates the mediating role of goodwill between CSR and M&A performance. Specifically, when EPU is higher, the external environment faced by enterprises is more difficult, market risks are greater and financing constraints are stronger. At this time, goodwill plays a more important role in CSR and M&A performance, i.e. EPU strengthens the process through which CSR influences M&A performance through goodwill. Based on this, the following hypothesis is proposed:

To sum up, we use M&A performance as the dependent variable, CSR as the independent variable, goodwill as the mediating variable and EPU as the moderating variable to construct a moderated mediating model, as shown in Figure 1.

The research sample comprises M&A events involving Chinese A-share listed enterprises that occurred from 2008 to 2016. The M&A data started in 2008, mainly because this is the first year of the Ranking CSR Rating database. The data interval for this study is 2008–2019 because it requires three years of post-merger data. The reason for the cutoff to 2019 is that the COVID-19 pandemic in 2020 had a huge impact on enterprises, especially on M&A and CSR activities, which have important and unavoidable impacts. These M&A events come from the WIND database. The sample selection criteria are as follows:

• the acquirer is the enterprise listed on the Shanghai and Shenzhen Stock Exchanges of China;

• the types of M&A include domestic M&A and cross-border M&A;

• M&A events involving multiple M&A entities are excluded;

• *ST and ST enterprises are excluded ^[1];

• exclude enterprises without CSR and goodwill data; and

• each enterprise retains only one M&A event per year and screens out the relevant M&A events in the order of earliest occurrence time, largest M&A amount or most equity acquisition.

Finally, 990 M&A events of 447 enterprises were obtained. The M&A year and industry distribution are shown in Table 1.

In addition, the CSR data comes from the Ranking CSR Rating database; the EPU data comes from the EPU website (Link to Economic Policy UncertaintyLink to the website of Economic Policy Uncertainty.); the enterprise’s financial data comes from the RESSET and WIND databases.

M&A performance (ΔROA). Referring to the research of Chen et al. (2013), we measured the change in return on total assets (ROA) two years before and after the first announcement of the M&A, i.e. using the mean ROA for the two years after the M&A (t + 1, t + 2) minus the mean ROA before the M&A (t – 1, t – 2), the acquirer’s M&A performance is measured using the change in ROA.

CSR. Drawing on the research of Zou et al. (2019), the Ranking CSR Rating (RKS) score was used to measure the acquirer’s CSR. RKS is an authoritative third-party rating agency for CSR in China. The total RKS score is 100 points, comprehensively evaluating listed enterprises’ CSR levels across four dimensions: monolithic (30%), content (45%), technical (15%) and industry (10%). The higher the score, the better the CSR performance.

Goodwill (GW). Considering the comparability of the goodwill of enterprises of different scales, we referred to the research of Zheng et al. (2014) and used standardized goodwill to measure the goodwill level of the acquirer, i.e. the goodwill assets of the current period of the M&A are divided by the total assets.

EPU. We used monthly data from the China EPU Index constructed by Baker et al. (2016) to measure EPU for the month in which the M&A announcement occurred. The index is monthly data calculated by collecting relevant word frequencies in Chinese domestic newspapers and statistically calculating them.

We selected the following six variables as control variables: listing Age (Age); ownership (Owner); debt to asset ratio (Lev); M&A Year (Year); industry (Ind); and cross-border M&A (Cro). The variable definitions are shown in Table 2.

To test H1: The impact of CSR on M&A performance, the following model was constructed:

To test H2, the stepwise regression method was used to construct the following model based on the original model:

To test H3 and H4, we set the multiplication term of goodwill and EPU and constructed the following model:

Table 3 reports the descriptive statistics of the main variables. Specifically, the mean of M&A performance (ΔROA) is −1.976, indicating that ROA in the two years after the M&A is lower than in the two years before the M&A. This aligns with the corporate phenomenon that post-merger performance is not always positive; the average value of CSR is 41.127, indicating that the overall level of CSR performance in our selected sample is not high.

Table 4 shows the results of the Pearson correlation analysis between the variables. The correlations between CSR and goodwill, as well as CSR and M&A performance, are significant, and the correlation between goodwill and M&A performance is also significant. In addition, after testing, the VIF values between all variables are in the range of 1–2, so there is no multicollinearity between the variables.

By constructing a multiple linear regression model, we analyzed the relationship between CSR and M&A performance. As shown in Table 5, CSR significantly promotes M&A performance at the 0.1% level (Model 2; β = 0.137, p < 0.001). H1 is supported.

To verify the mediating effect of goodwill, the results show that CSR reduces goodwill (Model 3; β = −0.067, p < 0.05). In addition, the table shows that after adding goodwill, the coefficient between CSR and M&A performance becomes smaller (Model 4; β = 0.123, p < 0.001), and goodwill can reduce M&A performance (β = −0.208, p < 0.001). Therefore, goodwill has a partial mediating effect between CSR and M&A performance. Further verification using the bootstrap method found a mediating effect of goodwill of 0.006, and 0 was not included in the 95% confidence interval [0.001, 0.014]. Therefore, goodwill plays a mediating role between CSR and M&A performance. H2 is supported.

To verify the moderating effect of EPU between goodwill and M&A performance, EPU is added based on Model 4, and goodwill and EPU are centralized. EPU has a moderating effect on the relationship between goodwill and M&A performance in Model 5 (β = −0.116, p < 0.001). To further verify the moderating effect of EPU, an interaction diagram is drawn (Figure 2). It can be seen that when EPU is higher, the negative relationship between goodwill and M&A performance is stronger, i.e. EPU strengthens the negative effect of goodwill on M&A performance. Therefore, H3 is supported.

To verify that the mediating effect of goodwill is moderated by EPU, the mediating effect of goodwill under different levels of EPU is tested. The results are shown in Table 6. When EPU is at a low (medium/high) level, the mediating effect of goodwill is 0.004 (0.007/0.010). This suggests that as EPU increases, the mediating effect of goodwill between CSR and M&A performance is stronger. H4 is supported.

• Replacement of the dependent variable measure. Following Chen et al. (2013), M&A performance is measured as the change in ROA over the three years before and after the M&A, namely, ΔROA₃ = (ROA_t+1 + ROA_t+2 + ROA_t+3)/3 − (ROA_t-1 + ROA_t-2 + ROA_t-3)/3. In addition, we included alternative performance measures to test the robustness of the model: ΔROA₁, end-of-period ROA₂, ΔROE and end-of-period ROE₂. Among them, ΔROA₁ captures the change in ROA between one year before and one year after the M&A. End-of-period ROA₂ is measured as the ROA at the end of the two-year post-M&A period. ΔROE is measured as the change in ROE between the two years before and the two years after the M&A. End-of-period ROE₂ is measured as the ROE at the end of the two-year post-M&A period. Table 7 shows that CSR still enhances M&A performance (Model 1; β = 0.135, p < 0.001, Model 2; β = 0.107, p < 0.01, Model 3; β = 0.119, p < 0.001, Model 4; β = 0.121, p < 0.001, Model 5; β = 0.136, p < 0.001).

• Exclusion of cross-border M&A samples. In most cases, CSR is aimed at domestic stakeholders. When enterprises conduct cross-border M&A, due to differences in enterprise culture and values, CSR may affect the original conclusion. Therefore, cross-border M&A observations were excluded from the sample. The obtained results are shown in Model 6 (Table 7), and there is no significant change in the empirical results (Model 6; β = 0.150, p < 0.001).

• Propensity score matching (PSM). The PSM method was used to reduce potential sample selection bias. Firms were divided into treatment and control groups based on the mean CSR score: observations with CSR above the mean were set as the treatment group, and those below the mean were assigned to the control group. The 1:1 nearest-neighbor matching method was used to match the treatment group with the control group. Control variables were included as covariates in the matching procedure, and covariate balance between the treatment group and the control group was tested. The results showed that the standardized mean differences for all variables were below 10%, and the t-tests failed to reject the null hypothesis, indicating satisfactory balance and reduced selection bias. Observations outside the region of common support were removed, and the regression was re-estimated using the matched sample. The results still support a positive relationship between CSR and M&A performance (Model 7; β = 0.108, p < 0.01).

The empirical results above show that CSR enhances M&A performance, but different enterprise attributes lead to different enterprise behaviors. For state-owned enterprises (SOEs), CSR is regarded as an inherent responsibility (Zhu et al., 2016), focusing on achieving non-economic objectives. Moreover, for SOE executives, actively fulfilling CSR is not only a channel for seeking promotion (Zhang et al., 2022) but also for shirking responsibility for poor enterprise performance. Conversely, non-SOEs are more concerned with realizing economic benefits. The main reason for fulfilling CSR is external pressure to enhance enterprises’ image and help them obtain better resources. Therefore, we divided the research sample into two groups: SOEs and non-SOEs.

Table 8 shows that the non-SOEs sample regression results still support the original conclusion, but there are differences in the SOEs sample regression results. Specifically, compared with non-SOEs, the positive relationship between SOEs’ CSR and M&A performance has weakened (non-SOEs: β = 0.163, p < 0.01; SOEs: β = 0.126, p < 0.01). In addition, the relationship between CSR and goodwill is not significant (β = −0.041, p > 0.05), nor is the relationship between goodwill and M&A performance (β = −0.061, −0.257***, −0.217***, 0.099, and −0.143**, p > 0.05). Therefore, in SOEs, goodwill does not mediate the relationship between CSR and M&A performance, and there is no need to discuss the moderating role of EPU on the relationship between goodwill and M&A performance.

For non-SOEs, the relationship between CSR and goodwill is not significant (β = −0.082, p > 0.05), but the relationship between goodwill and M&A performance in Model 6 is significant (β = −0.061, −0.257***, −0.217***, 0.099, and −0.143**, p < 0.001). Therefore, using the bootstrap method to further verify the mediating effect of goodwill, the results indicate a mediating effect of goodwill is 0.011, and the 95% confidence interval does not include 0 [0.001, 0.032]. It can be concluded that goodwill plays a mediating role on the relationship between CSR and M&A performance. In addition, the moderating effect of EPU between goodwill and M&A performance is tested, and the results show that the moderating effect of EPU is still significant (β = −0.061, −0.257***, −0.217***, 0.099, and −0.143**, p < 0.01). Moreover, a moderated mediating effect remains after testing, and the empirical results are consistent with the results of the full-sample test analysis.

In addition to property rights heterogeneity, industry heterogeneity is also a concern. As different industries face differentiated market competition environments, industrial policies and financing constraints, enterprises hold different attitudes toward social responsibility fulfillment. Therefore, it is necessary to analyze industry heterogeneity. We divided the sample into manufacturing (MFG) and other industries. The results are shown in Table 9.

For MFG, the relationship between CSR and M&A performance remains positive (β = 0.128, p < 0.01). The mediation effect is analyzed by conducting the Sobel test due to the insignificant relationship between CSR and goodwill (β = −0.036, p > 0.05). The Sobel test found that goodwill did not play a mediating role (Z = 0.687 < 0.97). Therefore, there is also no need to analyze the moderating effect.

For non-MFG, the relationship between CSR and M&A performance is still positive (β = 0.106, p < 0.05). The relationship between CSR and goodwill is negative (β = −0.111, p < 0.01), and the relationship between goodwill and M&A performance is also negative (β = −0.221, p < 0.001). Since the relationship between CSR and M&A performance is no longer significant (β = 0.082, p > 0.05), goodwill plays a fully mediating role between CSR and M&A performance. In addition, on this basis, the moderating effect of EPU between goodwill and M&A performance is tested, and the results show that the moderating effect of EPU is still significant (β = −0.095, p < 0.05). Moreover, it is found that there is still a moderated mediating effect after testing, and the empirical results are consistent with the results of the full-sample test analysis.

This study finds that CSR plays a facilitating role in M&A performance, which validates the findings of Deng et al. (2013) and Qiao et al. (2018). This finding is consistent with previous studies indicating a positive relationship between CSR and M&A performance. In addition, combined with the results of the robustness analysis, CSR has a consistently positive relationship with M&A performance within three years after the M&A. This validates the finding that CSR has a positive relationship with M&A performance within one year after M&A (Qiao et al., 2018), as well as the finding that CSR has a positive relationship with M&A performance in the second and third years after M&A (Deng et al., 2013). More importantly, this research confirms that the stakeholder theory is widely used in exploring the mechanisms by which CSR affects M&A performance (Deng et al., 2013; Qiao et al., 2018; Cho et al., 2021; Chen et al., 2022).

The mediating role of goodwill in the relationship between CSR and M&A performance validates the relevant findings of the existing literature. On the one hand, this validates the inhibitory effect of CSR on goodwill (Xu, 2020). On the other hand, this validates that goodwill increases the burden of business operations (Wei and Zhu, 2019) and reduces M&A performance (Zhang and Zhang, 2021). However, heterogeneity analysis shows that the mediating effect of goodwill exists only in non-SOEs and non-MFG. In terms of property rights heterogeneity, M&A of SOEs is mainly policy-driven, and the formation of goodwill is weakly correlated with market factors (such as CSR). The “budget soft constraint” and “inherent political advantages” of SOEs also diminish the cost-saving effect of goodwill premiums. However, non-SOEs undertaking CSR helps to enhance their corporate image and generate a reputation incentive effect, thereby curbing corporate goodwill bubbles (Xu, 2020). In terms of industry heterogeneity, the manufacturing industry relies on tangible assets, while the non-MFG industry relies on intangible assets. The non-MFG has light asset attributes, and CSR has a stronger impact on M&A performance through intangible assets such as goodwill; the heavy asset attributes of the MFG are the opposite. Therefore, the mediating effect of goodwill mainly exists in non-SOEs and non-MFG.

The moderating role of EPU also confirms some existing research findings. This finding mainly proves that changes in the business environment caused by EPU affect corporate M&A behavior (Bonaime et al., 2018). Compared with the studies of Deng et al. (2013) and Qiao et al. (2018), we not only confirm the positive relationship between CSR and M&A performance, but also verify the mediating effect of goodwill and the moderating effect of EPU. Both the moderating role of EPU between goodwill and M&A performance and the moderating role of the mediating effect of goodwill demonstrate its importance in enterprise M&A (Liu and Yuan, 2021). In addition, EPU continues to play an important moderating role among non-SOEs and non-MFG.

Taking 990 Chinese enterprises’ M&A events from 2008 to 2016 as a sample, based on stakeholder theory, we construct a moderated mediating model to study the impact mechanism between CSR and M&A performance. The research results show that:

• CSR can enhance corporate M&A performance;

• goodwill has a mediating effect between CSR and M&A performance;

• EPU strengthens the negative effect of goodwill on M&A performance;

• EPU moderates the indirect effect of CSR on M&A performance through goodwill; and

• the mechanism of the effect of CSR and M&A performance shows property rights and industry heterogeneity.

• Strengthen CSR implementation. First, incorporate CSR throughout the M&A process, including pre-M&A due diligence on the target company’s CSR and setting post-M&A CSR synergy targets. Second, establish stakeholder communication mechanisms, including regular CSR reporting, the creation of CSR committees or hiring independent third-party CSR assessment agencies. Third, differentiate CSR strategies, including market-oriented CSR for non-SOEs and non-manufacturing industries, and policy-oriented CSR for SOEs and manufacturing industries.

• Improve the long-term supervision and incentive mechanisms. First, optimize compensation structures for senior executives by incorporating goodwill impairment risk into senior executive performance evaluations and introducing long-term equity-based incentives. Second, strengthen board oversight by establishing M&A evaluation teams led by independent directors and hiring third-party institutions to evaluate the reasonableness of goodwill. Third, implement dynamic goodwill management, including adjusting the goodwill impairment valuation models in conjunction with CSR performance and establishing a goodwill risk reserve system.

• Enhance firms’ risk resilience. First, establish an early warning system for policy uncertainty, including setting up a dedicated team to monitor macro policies and using big data tools to generate risk indices. Second, enhance organizational resilience by diversifying the geographical distribution of suppliers and setting up performance-based clauses in M&A agreements. Third, conduct scenario planning by simulating the impact of goodwill impairment under different stress scenarios for extreme situations such as economic fluctuations and geopolitical conflicts and formulating contingency plans.

This study has the following limitations in research methods and content: the sample coverage rate is relatively low. The Ranking CSR Rating score selected in this study only includes the data of listed enterprises that have issued CSR reports. This sample selection bias results in the inclusion of more CSR-conscious enterprises. The research conclusions are based solely on enterprises that have disclosed CSR information, rather than all enterprises. Therefore, future research can verify relevant conclusions by collecting data on non-listed enterprises or improving CSR measurement indicators. For example, by assessing the CSR performance of more companies through news reports, third-party databases, government regulatory filings and other sources; the contextual applicability of the research conclusions remains to be tested. The empirical results do not accurately reflect the influence mechanism of CSR and cross-border M&A performance. The small number of cross-border M&A cases makes it difficult to accurately identify this mechanism. In future research, it is necessary to collect more cross-border M&A events and conduct a more in-depth study. In particular, reverse M&A, as a form of cross-border M&A, is of great significance to emerging markets. Considering the characteristics of emerging markets acquiring developed countries, the disadvantages of the country of origin and the lack of institutional legitimacy make CSR and goodwill even more critical factors. Furthermore, our research has some reference value for emerging markets, but its applicability to developed markets may be limited.