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Green innovation and cross-border M&As: evidence from China

Green innovation and cross-border M&As: evidence from China

Liu, Xianmin, Muradoglu, Yaz Gulnur and Peng, Ni (2023) Green innovation and cross-border M&As: evidence from China. In: 2023 FMA Annual Meeting, 11th - 14th October 2023, Sheraton Grand Chicago Riverwalk Hotel, Chicago. (Unpublished)

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Using a sample of cross-border mergers and acquisitions (CBMAs) attempted by Chinese listed firms between 2007 and 2021, we explore how green innovation affects emerging market economy (EME) bidders’ internationalization via CBMAs. We document that green innovative bidders are more likely to complete CBMA deals successfully, realize higher announcement abnormal returns in the short-run, and achieve better post-merger operating performance in the long term. This better performance is achieved due to lower growth rate of carbon emission, superior environmental performance, reduced environmental compliance costs, and larger government subsidies after CBMA deal completion. Moreover, the positive effect of green innovation on deal completion probability and post-merger operating performance is more pronounced when host economies have greater physical climate risk, while weakened when host economies incur higher economic policy uncertainty. Brought together, these findings suggest that green innovative EME bidders positively respond to stakeholders’ concerns about climate change-related risks and environmental issues, thus contributing to the attainment of legitimacy and facilitating their internationalization via CBMAs.

Item Type: Conference or Conference Paper (Paper)
Uncontrolled Keywords: green innovation; cross-border mergers and acquisitions (CBMAs); carbon emissions; government subsidies; uncertainty
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
Faculty / School / Research Centre / Research Group: Faculty of Business
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Last Modified: 25 Sep 2023 08:25

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