Peer spillovers of environmental penalties - Evidence from green mergers and acquisitions

Jichen Yang and Yali Gu

Finance Research Letters, 2024, vol. 69, issue PB

Abstract: Using data on environmental penalties and green mergers and acquisitions in China from 2011 to 2022, we study the spillover effects of environmental penalties on peer firms. Our findings indicate that when firms within an industry are penalized for environmental violations, other firms in the same industry tend to increase their green merger and acquisition activities. This tendency is likely due to the heightened environmental concern resulting from the penalties. Furthermore, the spillover effect is more pronounced in firms with lower financial constraints and higher information transparency.

Keywords: Spillover effect; Corporate finance; Green merger and acquisitions (search for similar items in EconPapers)
JEL-codes: G30 G34 L10 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pb:s154461232401242x

DOI: 10.1016/j.frl.2024.106213

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