Does corporate ESG create value? New evidence from M&As in China

Zhigang Zheng, Jiarong Li, Xingzi Ren and Jie Michael Guo

Pacific-Basin Finance Journal, 2023, vol. 77, issue C

Abstract: Using a large sample of Chinese companies' domestic M&A, this study provides new evidence on the financial payback of corporate ESG and its dynamics. We find that acquirers' ESG rating is positively correlated to post-M&A performance and deal completion likelihood. Additionally, we find the relationship between acquirer's ESG dynamic and post-M&A performance is contingent on the firm's previous ESG standards. Overall, these findings are in line with the instrumental stakeholders' view that high ESG performance could earn support from stakeholders for post-M&A synergy creation and emphasize the asymmetric marginal outcome of firms' ESG efforts as a result of diminishing marginal utility of stakeholders.

Keywords: ESG; Merger and acquisition; Firm value; Stakeholder utility (search for similar items in EconPapers)
JEL-codes: G32 G34 M14 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:77:y:2023:i:c:s0927538x22002116

DOI: 10.1016/j.pacfin.2022.101916

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