The Structural Dilemma of CSV-Oriented Corporate Farms and the Role of Financial Institutions: An Empirical Study on the Determinants of M&A Execution in Japan

The succession crisis in Japan’s rural communities has made external growth strategies, particularly corporate farm mergers and acquisitions (M&A), crucial for preserving agricultural resources and maintaining rural land governance. Simultaneously, agribusinesses must pursue Creating Shared Value (CSV) for regional sustainable development. This study empirically examines the mechanisms underlying M&A execution among agricultural corporations and clarifies the structural dilemmas faced by CSV-oriented agricultural corporations in maintaining rural land governance. Using structural equation modeling and comparative analysis on a nationwide survey of 388 corporate farms, we analyzed relationships between organizational capacity, management goals, and M&A. Results show that M&A execution is positively associated with scale-based organizational capacity—a proxy for internal management systems and absorptive capabilities—rather than financial surplus. However, farms prioritizing CSV goals, such as farmland maintenance, face a critical structural dilemma. Motivated by socioemotional wealth and community ties, they informally assume local farmland without profit to prevent land abandonment and sustain the rural landscape. This non-strategic burden depletes resources and suppresses the organizational capacity required for formal M&A and post-merger integration. Furthermore, these CSV-oriented farms remain isolated from existing financial ecosystems, underutilizing banks for M&A coordination. To prevent synergy traps and foster sustainable land governance, the findings suggest that financial institutions may benefit from redefining their roles. Rather than solely providing acquisition capital, they could potentially serve as regional ecosystem coordinators by offering capacity-building support to CSV-oriented farms.