IDEAS home Printed from https://ideas.repec.org/a/ove/journl/aid21379.html
   My bibliography  Save this article

Success in cross-border M&A deals: can ESG performance be a countervailing force against political risk?

Author

Listed:
  • Abay Mulatu
  • Boying Xu

Abstract

This paper explores how acquiring firms from emerging markets can mitigate political-risk concerns from host countries in Cross-Border Mergers & Acquisitions (CBM & As) deals by leveraging their Environmental, Social, and Governance (ESG) practices. Utilizing data from Chinese CBM & As activities from 2010 to 2018, we find that while relative political risk concerns deter deal completion rate, higher ESG standards of acquirer firms reduce this deterrence effect. The results remain robust to considering ‘duration of deal completion’ as an alternative variable and when splitting the target sample countries into developed and emerging economies. The key conclusion is that emerging market multinational companies can effectively employ ESG as a strategic tool for internationalisation, enabling them to overcome some of the inherent ‘liabilities of origin’.

Suggested Citation

  • Abay Mulatu & Boying Xu, 2025. "Success in cross-border M&A deals: can ESG performance be a countervailing force against political risk?," Economics and Business Letters, Oviedo University Press, vol. 14(3), pages 146-155.
    • Handle: RePEc:ove:journl:aid:21379
    as

    Download full text from publisher

    File URL: https://reunido.uniovi.es/index.php/EBL/article/view/21379
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ove:journl:aid:21379. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Francisco J. Delgado (email available below). General contact details of provider: https://edirc.repec.org/data/deovies.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.