The Impact of ESG Performance of Acquirer on the Long-Term Performance of Cross-Border Mergers and Acquisitions of China A-Share Listed Companies: An Analysis Based on Two-Way Fixed Effect and Threshold Effect

Xinyu Zou, Zhongping Wang () and Jianing Zhao
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Xinyu Zou: School of Economics and Management, Beijing Forestry University, Beijing 100083, China
Zhongping Wang: School of Economics and Management, Beijing Forestry University, Beijing 100083, China
Jianing Zhao: School of Management Science & Engineering, Shanxi University of Finance and Economics, Taiyuan 030006, China

Sustainability, 2025, vol. 17, issue 14, 1-28

Abstract: As Environmental, Social, and Governance (ESG) gradually become the common language for sustainable development of international society and international cooperation in China, it is worth discussing whether ESG practices can help Chinese enterprises shape a responsible international image, overcome the liability of foreignness (LOF) and improve the long-term performance of cross-border mergers and acquisitions (M&As). On the basis of theoretical discussion, combined with the panel data of cross-border M&As of China A-share listed companies from 2010 to 2021, this paper empirically examines that the ESG performance of acquirers has a significant positive impact on the long-term performance of cross-border mergers and acquisitions (M&As) of China A-share listed companies. Furthermore, the ESG performance of environment and governance dimensions and heavily polluting enterprises has stronger incentive effects on the long-term performance of cross-border M&As. The ESG performance of the acquirer positively affects the long-term performance of cross-border M&As of China A-share listed companies by acquiring capital market resources, product market competitiveness, regulatory legitimacy, and enhancing internal synergy.

Keywords: ESG; liability of foreignness; long-term cross-border mergers and acquisitions performance; institutional complexity (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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