The Impact of Green Mergers and Acquisitions on Corporate Environmental Performance: Evidence from China’s Heavy-Polluting Industries

Yingying Xu, Wen Wang (), Honggui Gao and Huaxiong Zhu
Additional contact information
Yingying Xu: School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China
Wen Wang: School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China
Honggui Gao: School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China
Huaxiong Zhu: School of Economics, Zhongnan University of Economics and Law, Wuhan 430073, China

Sustainability, 2024, vol. 16, issue 9, 1-24

Abstract: This study examined the impact of green mergers and acquisitions (green M&As) on corporate environmental performance. Applying the Differences-in-Differences (DID) model to a sample of Chinese heavy-polluting-industry companies listed on the Shanghai and Shenzhen stock exchanges from 2010 to 2022, our study results show that the adoption of green M&As by the listed Chinese heavy polluters can lower corporate environmental capital expenditure and significantly improve corporate environmental performance. Meanwhile, the positive effects of green M&As on environmental performance are also found to be stronger for state-owned enterprises, young enterprises, and enterprises located in areas with low financial investments in energy efficiency and environmental protection, according to a heterogeneity study conducted for this paper. The analysis of mediating effects shows that the green M&A of heavily polluting firms will have a catalytic effect on the improvement of firms’ environmental performance by promoting their green technological innovation and, in turn, their environmental performance. Furthermore, the moderating effect analysis demonstrates that the quality of the firm’s internal controls and the CEO’s prior environmental experience are both factors that can support the beneficial impact of green M&A on the enhancement of the firm’s environmental performance. This paper enriches the theoretical research system of green M&A and green investment driving mechanisms, and at the same time provides empirical support and strategic reference for the green strategy decision of heavy-polluting enterprises.

Keywords: green mergers and acquisitions; environmental performance; green innovation; heavy polluters; DID (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/16/9/3796/pdf (application/pdf)
https://www.mdpi.com/2071-1050/16/9/3796/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:16:y:2024:i:9:p:3796-:d:1387025

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().