Can green mergers and acquisitions drive firms' transition to green exports? Evidence from China's manufacturing sector

Amidst escalating global green trade barriers, firms in emerging economies face a dual imperative: acquiring advanced green technologies and securing environmental legitimacy. This study investigates how green mergers and acquisitions (M&As) serve as a strategic lever to navigate these challenges and drive the transition to green exports, focusing on China's manufacturing sector. We develop a “Technology-Qualification” framework that highlights the dual channels: enhancing green innovation capability and acquiring environmental market legitimacy. Using a matched dataset linking Chinese A-share listed manufacturers with customs transaction records (2007–2016), we find that green M&As significantly enhance firms' transition to green exports from both the perspectives of export entry and sustained exports. This effect remains robust after a series of tests, including those addressing endogeneity concerns. Mechanism analysis shows that green M&As operate through the dual channels of innovation upgrading and qualification acquisition, and further analysis reveals that these two channels either complement or substitute each other, depending on whether the green qualifications are formal or informal. Heterogeneity analysis indicates that the positive impact of green M&As is stronger for firms with higher operational efficiency, weaker initial green foundations, private ownership, and those engaged in processing trade. Moreover, beyond promoting green entries, green M&As encourage the exit of polluting export products and reduce the exit of existing green products, thereby driving a green-oriented dynamic restructuring of export portfolios. These findings provide micro-level evidence on how firms in emerging economies can leverage strategic M&A activities to reconstruct competitive advantages and respond to stricter global green trade regimes.