Substantive transformation or strategic response? The impact of a negative social responsibility performance gap on green merger and acquisition of heavily polluting firms

Ziyuan Sun, Xiao Sun, Lihong Wang and Wei Wang

Journal of Environmental Planning and Management, 2025, vol. 68, issue 6, 1238-1262

Abstract: How to promote heavily polluting firms to achieve substantive green transformation is an important issue. Using the data from Chinese samples, this paper investigates the influence of corporate social responsibility (CSR) performance feedback on the decision and performance of green merger and acquisition (GMA). We find that a negative CSR performance gap is positively related to the likelihood of GMA. From the perspective of market pressure, the mediating roles of negative investor sentiment and media coverage are revealed. Furthermore, the above promotion effect is only reflected in firms with high financial slack, with high public environmental attention, or in the growth stage. Regarding GMA performance, we find that GMA driven by a CSR performance gap merely promotes strategic green innovation, but it promotes substantive green innovation when firms are under high-intensity government environmental regulation. This study provides new insights on how to promote firms to engage in GMA and improve GMA performance.

Date: 2025
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DOI: 10.1080/09640568.2023.2285727

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