Title

The Effect Of Cultural Similarity On Mergers And Acquisitions: Evidence From Corporate Social Responsibility

Abstract

We study the effect of corporate cultural similarity on merger decisions and outcomes. Using the similarity in firms' corporate social responsibility characteristics to proxy for cultural similarity, we find that culturally similar firms are more likely to merge. Moreover, these mergers are associated with greater synergies, superior long-run operating performance, and fewer write-offs of goodwill. Our evidence is consistent with the notion that cultural similarity eases post-deal integration. Our results contribute to the literature on the determinants of merger success, provide new evidence on the impact of corporate culture, and offer a new approach to defining firms' cultural similarity.

Publication Date

10-1-2018

Publication Title

Journal of Financial and Quantitative Analysis

Volume

53

Issue

5

Number of Pages

1995-2039

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1017/S0022109018000716

Socpus ID

85050553956 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/85050553956

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