Does environmental regulation promote green merger and acquisition? Evidence from the implementation of China’s newly revised Environmental Protection Law

Abstract

Green merger and acquisition (Green M&A) is one of the ways of corporate environmental investment, which is vital for their green transformation and sustainable development. With the implementation of the newly revised Environmental Protection Law in 2015, this paper investigates the impact of environmental regulation on corporate green M&A using the Difference-in-Difference method with a sample of Chinese listed companies from 2007 to 2020. We found that firms’ green M&A increases significantly after the implementation of the new Environmental Protection Law. The promotion effect is more pronounced when the firm is state-owned or faces lower financing constraints. Further analysis reveals that green M&A significantly reduces firms’ environmental management costs, enhances green innovation, and has no effect on market performance. This result confirms that after the implementation of the new Environmental Protection Law, companies engage in green M&A for cost and innovation motives rather than market motives.

The impact of temperature on labor productivity——evidence from temperature-sensitive enterprises

“…An uncomfortable temperature environment may exacerbate enterprise labor productivity loss by reducing labor intensity in construction activities and the amount of labor available (Carleton and Hsiang, 2016). As climate change poses serious risks to businesses, proactive and appropriate measures are naturally required in response to these risks (Xue et al, 2021;Han et al, 2022;Liu et al, 2022;Wang, 2022). For example, by modifying work hours and work shifts, construction contractors could reduce workers' work time and intensity on high-temperature days in summer and low-temperature days in winter.…”

Evaluation of Marine Fisheries Vulnerability in China and Its Spatial Effects: Evidence from Coastal Regions

“…Economic efficiency can influence the sustainability of marine fisheries through the input and output of fisheries resources [42], and the evolution of industrial structure can promote the flow and reallocation of fisheries resources and production factors in various industries [43]. Environmental regulation can reduce the mismatch of resources in the industry and thus improve the productivity of the industry [44], and the construction of fisheries ecological civilization is the only way to sustainably develop fisheries [45]. Therefore, this study examines the spatial spillover effects of marine fishery vulnerability in four aspects of economic efficiency, industrial structure, environmental regulation, and ecological pollution.…”

The Impact of Green Mergers and Acquisitions on Corporate Environmental Performance: Evidence from China’s Heavy-Polluting Industries

“…The concept of a green M&A is defined by scholars as an M&A that is carried out by enterprises for the purpose of acquiring green technologies and equipment, improving energy saving and emission reduction capabilities, and achieving green transformation [32][33][34][35]. Through the introduction of green targets, companies can not only directly improve their production pollution situation, but also accelerate the emergence of a win-win situation for both profitability and environmental protection through the catalytic effect of new technologies and talents [36]. In recent years, more and more heavily polluting enterprises have realized transformation and development through green M&A activities or sent good signals to the market to protect the environment and clean production, and green M&As with environmental protection themes have gradually become a hotspot of attention in the capital market [33,35].…”

“…On the other hand, there is huge potential and scope for companies to reap economic benefits through energy saving and emission reduction [49,50]. In comparison, after acquiring resources through green M&As to build a good foundation, heavy polluters are more willing to choose a strategy that meets environmental regulation standards [36], change their previous crude development model and take the initiative to implement a green technology leadership strategy to deepen their innovation research to enhance their core competitiveness, corporate value and industry status [51,52]. Therefore, we believe that the implementation of green M&A by heavily polluting companies can drive their environmental performance through green technology innovation.…”

“…The CEO is the key decision maker in corporate management, responsible for the planning and implementation of financial, strategic, operational and other important tasks. A CEO with environmental experience will have a stronger sense of social responsibility and will be able to recognize the urgency and necessity of environmental protecting problems in a timely manner [36]. Under increasingly stringent environmental regulations and potential pollution costs, the executive team of heavily polluting companies often hesitates to make decisions on development and transformation, while CEOs with environmental experience can avoid short-sightedness, become familiar with the national environmental policy faster, reduce the risk of transformation, and highlight the advantages in the process of sustainable and green development of the enterprise [14].…”