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Biodiversity risk and payment methods in mergers & acquisitions

Author

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  • Liu, Zhangxin
  • Qin, Yue
  • Zhong, Rui

Abstract

We document a significant increase in the percentage of stock financing in mergers and acquisition (M&A) deals when target firms’ biodiversity risk (BDR) is high. Further analysis shows that this relationship is enhanced by high information asymmetry between acquirers and targets, greater financial constrain and poor governance mechanisms of acquirers. These results remain robust across subsamples and alternative specifications, highlighting BDR as a novel and financially materialized factor shaping financing design of M&A deals.

Suggested Citation

  • Liu, Zhangxin & Qin, Yue & Zhong, Rui, 2025. "Biodiversity risk and payment methods in mergers & acquisitions," Finance Research Letters, Elsevier, vol. 86(PF).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pf:s1544612325021452
    DOI: 10.1016/j.frl.2025.108892
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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