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Green M&A dilemma: Unravelling the impact on high polluting enterprises’ performance

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  • Ma, Ruichen
  • Pan, Xiaofei
  • Suardi, Sandy

Abstract

This paper investigates the impact of green mergers and acquisitions (M&As) on shareholder value within High Polluting Enterprises (HPEs). Analyzing 1,840 M&A transactions involving listed HPEs in China from 2012 to 2020, our study reveals a substantial decline in HPEs' performance post-green M&As. This effect is particularly pronounced among non-state-controlled HPEs, those with fewer financial constraints, and those with lower ESG performance. Additionally, channel analysis indicates that HPEs witness poorer post-green M&As performance when making higher cash payments or offering a premium. Overall, our findings suggest that HPEs may prioritize environmental goals in green M&As, potentially compromising shareholder value.

Suggested Citation

  • Ma, Ruichen & Pan, Xiaofei & Suardi, Sandy, 2024. "Green M&A dilemma: Unravelling the impact on high polluting enterprises’ performance," Finance Research Letters, Elsevier, vol. 70(C).
    • Handle: RePEc:eee:finlet:v:70:y:2024:i:c:s1544612324013217
    DOI: 10.1016/j.frl.2024.106292
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    References listed on IDEAS

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