Financial Value Creation Mechanism Of Social Responsibility In Corporate Merger And Acquisition

M&A is an important means for enterprises to expand their business scale.Especially under the implementation of "going global" and "the Belt and Road" initiative,the number and amount of mergers and acquisitions of Chinese enterprises have grown rapidly.After M&A,the success of integration is more important.However,there are often serious conflicts of interest between M&A parties,leading to prominent integration problems.How the acquirer takes into account the interests of all parties is the key to achieve smooth integration.And fulfilling social responsibility in M&A is one of the effective measures to accelerate M&A integration.At present,the society is paying more and more attention to corporate social responsibility.The Global Reporting Initiative(GRI)has issued multiple editions of the Sustainable Development Report Guide to comprehensively guide the performance and disclosure of corporate social responsibility;In China,the revised Company Law reflects corporate social responsibility in the law for the first time.However,the theoretical research on corporate social responsibility is still insufficient,especially the research and practice of corporate social responsibility in M&A integration are not rich enough.Most of the existing studies focus on the relationship between social responsibility and corporate performance,but not on the specific mechanism of its impact on corporate financial value creation and the relationship with M&A integration.Therefore,there is still a theoretical gap in the existing studies.In view of this,this paper selects CMOC Group Limited(hereinafter referred to as "CMOC")to acquire TFM mining area in Congo as the research object.This case is a typical case that Chinese enterprises actively fulfill their social responsibilities and create financial value in the process of M&A.First,this paper introduces the parties involved in the M&A,the M&A process and the overview of corporate social responsibility in the M&A.Second,in the case analysis part of this article,using the Gioia coding analysis and research method,starting from the research question,the data collected are analyzed and summarized through three-level coding,and the first-order structure and secondorder theme of this article are extracted,which are further aggregated into six dimensions,including "endogenous development needs","external pressure driven",and "internal social responsibility",based on the logical framework of "situation behavior feedback results",This paper constructs the financial value creation mechanism model of corporate social responsibility in M&A,and discusses this case.First of all,clarify the motivation of enterprises to fulfill their social responsibility in M&A,and answer the question "Why do enterprises fulfill their social responsibility in M&A";Secondly,based on the perspective of stakeholders,refine the social responsibility behaviors adopted in M&A,and answer the question "How do enterprises fulfill their social responsibility in M&A";Then,it summarizes the feedback formed by various stakeholders when facing social responsibility behaviors;Finally,through relevant financial indicators to verify that social responsibility creates financial value for the enterprise itself.The research contributions of this paper are as follows:(1)Based on the coding results,this paper constructs the financial value creation mechanism model of corporate social responsibility in mergers and acquisitions.Its mechanism is based on the internal and external situational factors of fulfilling social responsibility in the process of enterprise merger and acquisition.On the one hand,the enterprise itself needs to maintain the relationship with the subject matter of merger and acquisition through social responsibility,pave the way for integration and long-term business development,and resist various non-financial risks that may be faced;On the other hand,the increased attention to corporate social responsibility from the outside world and the interest demands of various interested parties in M&A make enterprises need to perform social responsibility to meet objective requirements.Therefore,enterprises need to identify the stakeholders in M&A,take various action strategies in the face of different stakeholders,as a key tool for M&A risk management and long-term value creation,coordinate the benefits of M&A between enterprises and target parties,and form their positive feedback results on the performance of corporate social responsibility.This case found that the enterprise realized the coordination of interests between the enterprise and all parties by performing its social responsibility to yield profits to various stakeholders of the target.On the contrary,the target also provides the enterprise with the capital and resources needed for long-term development,which helps the enterprise to create financial value related to financing activities,investment activities and business activities,ultimately promoting the smooth integration of this M&A and improving the efficiency of M&A.(2)The study found that fulfilling social responsibility will be regarded as a non business investment of enterprises.Although it will temporarily increase capital expenditure,it will bring positive economic benefits in the long run.Therefore,fulfilling social responsibility has a more obvious positive effect on enterprises in general.Therefore,in daily business activities,enterprises should maintain a positive attitude towards their social responsibilities,fulfill their social responsibilities within their responsibilities,coordinate the conflicts of interest between enterprises and various stakeholders,and ensure the smooth progress of enterprise activities.(3)This paper puts corporate social responsibility and corporate merger and acquisition under the same analytical framework,clarifies the specific path of corporate social responsibility to create financial value in mergers and acquisitions,and finds that social responsibility is an effective means to promote merger and acquisition integration,ensure the stable operation of the subject matter and create value.This paper expands the relevant research in the field of social responsibility and M&A integration,with a view to providing reference for corporate social responsibility implementation in practice.