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

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  • Yang, Jichen
  • Gu, Yali

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.

Suggested Citation

  • Yang, Jichen & Gu, Yali, 2024. "Peer spillovers of environmental penalties - Evidence from green mergers and acquisitions," Finance Research Letters, Elsevier, vol. 69(PB).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s154461232401242x
    DOI: 10.1016/j.frl.2024.106213
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    References listed on IDEAS

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    More about this item

    Keywords

    Spillover effect; Corporate finance; Green merger and acquisitions;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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