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Corporate carbon risk and green M&As

Author

Listed:
  • Liu, Duan
  • Xiong, Yuxuan
  • Wang, Lili
  • Yao, Shujie

Abstract

Green M&A is more conducive to the realization of national and global carbon goals than carbon-transfer M&A. In the context of emission reduction and economic development, studying the risk pressure brought about by carbon emission to drive green M&A is important. This study analyzes the effect of carbon risk on green M&As using data for China’s A-share listed firms in 2010–19. It verifies the promoting effect of carbon risk on green M&As from two underlying mechanisms. First, the risk of high carbon emission increases pressure on corporate environmental legitimacy. Second, carbon emission behavior poses a reputational risk to firms. Firms with high carbon risk conduct green M&As to meet legitimacy requirements and maintain a good reputation. Under these two mechanisms, stronger environmental regulations and better CSR performance can intensify the stimulating effect. Our study provides empirical evidence on reducing carbon risk from the perspective of firms’ holistic green transformation.

Suggested Citation

  • Liu, Duan & Xiong, Yuxuan & Wang, Lili & Yao, Shujie, 2025. "Corporate carbon risk and green M&As," Research in International Business and Finance, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:riibaf:v:75:y:2025:i:c:s0275531924005075
    DOI: 10.1016/j.ribaf.2024.102714
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