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How does green finance policy affect firms' pro‐environmental mergers and acquisitions?

Author

Listed:
  • Zhimin Yi
  • Haiyue Liu
  • Yile Wang
  • Jinyong Chen

Abstract

The study reveals that the Green Credit Guidelines significantly encourage firms' pro‐environmental mergers and acquisitions (M&As) among polluting industries, as evidenced by difference‐in‐differences estimations with Chinese listed firms (2004–2020). Three primary mechanisms include increased commercial credit financing, improvements within firm agencies, and heightened scrutiny from external analysts. The effect is more prominent in non‐state‐owned firms, firms with a higher number of executives with financial backgrounds, and regions with lower levels of green financial development and environmental regulations. Post‐M&A, acquiring firms demonstrate a marked decrease in environmental governance expenses and carbon emissions, alongside an improvement in overall environmental performance.

Suggested Citation

  • Zhimin Yi & Haiyue Liu & Yile Wang & Jinyong Chen, 2024. "How does green finance policy affect firms' pro‐environmental mergers and acquisitions?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 64(5), pages 4723-4748, December.
    • Handle: RePEc:bla:acctfi:v:64:y:2024:i:5:p:4723-4748
    DOI: 10.1111/acfi.13329
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    References listed on IDEAS

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    1. Wang, Bo & Gong, Siyu, 2025. "How does digital transformation drive green technology M&A under the carbon cap and trade policy?," Technology in Society, Elsevier, vol. 81(C).

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