IDEAS home Printed from https://ideas.repec.org/a/wly/sustdv/v32y2024i6p6072-6087.html
   My bibliography  Save this article

Can green technology mergers and acquisitions enhance sustainable development? Evidence from ESG ratings

Author

Listed:
  • Yan Zhang
  • Ziyuan Sun
  • Anqi Sheng
  • Longyu Zhang
  • Yiwen Kan

Abstract

In order to better understand the impact of green technology mergers and acquisitions (GTMA) on sustainable development, the difference‐in‐differences model is applied to investigate the direct impact and underlying mechanisms of GTMA on the environment, society, and governance (ESG) in China. Additionally, we established a two‐dimensional framework of “market versus government” to analyze the heterogeneity. The results show that: (1) GTMA is positively aligned with greater ESG performance, indicating that GTMA is an effective way to enhance sustainable development. (2) GTMA fosters ESG performance by boosting green subsidies (i.e., signal transmission channel), lowering financing costs (i.e., impression management channel), and enhancing green innovation (i.e., technology synergy channel). (3) The positive relationship is largely dependent on the collaborative supervision environment (i.e., “strong” market and “strong” government) and the appropriate policy environment (i.e., “big” market and “small” government). (4) Furthermore, GTMA carries significant spillover effects, with other enterprises in the same industry improving their ESG performance. Additionally, this paper proposes targeted directions for the government and enterprises to take advantage of GTMA dividends to realize superior ESG performance.

Suggested Citation

  • Yan Zhang & Ziyuan Sun & Anqi Sheng & Longyu Zhang & Yiwen Kan, 2024. "Can green technology mergers and acquisitions enhance sustainable development? Evidence from ESG ratings," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(6), pages 6072-6087, December.
  • Handle: RePEc:wly:sustdv:v:32:y:2024:i:6:p:6072-6087
    DOI: 10.1002/sd.3004
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/sd.3004
    Download Restriction: no

    File URL: https://libkey.io/10.1002/sd.3004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Stefan Ambec & Mark A. Cohen & Stewart Elgie & Paul Lanoie, 2013. "The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(1), pages 2-22, January.
    2. Çiğdem Vural‐Yavaş, 2021. "Economic policy uncertainty, stakeholder engagement, and environmental, social, and governance practices: The moderating effect of competition," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(1), pages 82-102, January.
    3. Christensen, Lars Thøger & Morsing, Mette & Thyssen, Ole, 2020. "Timely hypocrisy? Hypocrisy temporalities in CSR communication," Journal of Business Research, Elsevier, vol. 114(C), pages 327-335.
    4. Qiang Wang & Feng Ren & Rongrong Li, 2024. "Exploring the impact of geopolitics on the environmental Kuznets curve research," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(3), pages 1700-1722, June.
    5. Caroline Flammer & Jiao Luo, 2017. "Corporate social responsibility as an employee governance tool: Evidence from a quasi-experiment," Strategic Management Journal, Wiley Blackwell, vol. 38(2), pages 163-183, February.
    6. Eaton, Gregory W. & Guo, Feng & Liu, Tingting & Officer, Micah S., 2022. "Peer selection and valuation in mergers and acquisitions," Journal of Financial Economics, Elsevier, vol. 146(1), pages 230-255.
    7. Remmer Sassen & Anne-Kathrin Hinze & Inga Hardeck, 2016. "Impact of ESG factors on firm risk in Europe," Journal of Business Economics, Springer, vol. 86(8), pages 867-904, November.
    8. Deng, Xin & Kang, Jun-koo & Low, Buen Sin, 2013. "Corporate social responsibility and stakeholder value maximization: Evidence from mergers," Journal of Financial Economics, Elsevier, vol. 110(1), pages 87-109.
    9. Jang, Ga-Young & Kang, Hyoung-Goo & Kim, Woojin, 2022. "Corporate executives’ incentives and ESG performance," Finance Research Letters, Elsevier, vol. 49(C).
    10. Tan, Yafei & Zhu, Zhaohui, 2022. "The effect of ESG rating events on corporate green innovation in China: The mediating role of financial constraints and managers' environmental awareness," Technology in Society, Elsevier, vol. 68(C).
    11. Benedikt Downar & Jürgen Ernstberger & Stefan Reichelstein & Sebastian Schwenen & Aleksandar Zaklan, 2021. "The impact of carbon disclosure mandates on emissions and financial operating performance," Review of Accounting Studies, Springer, vol. 26(3), pages 1137-1175, September.
    12. Bissoondoyal-Bheenick, Emawtee & Brooks, Robert & Do, Hung Xuan, 2023. "ESG and firm performance: The role of size and media channels," Economic Modelling, Elsevier, vol. 121(C).
    13. Pin Wang & Ali Zhou & Yi Wang, 2022. "Corporate Tax Integrity and the Cost of Debt: Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(6), pages 1702-1711, May.
    14. Wang, Jianli & Wang, Shaolin & Dong, Minghua & Wang, Hongxia, 2024. "ESG rating disagreement and stock returns: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 91(C).
    15. Gillan, Stuart L. & Koch, Andrew & Starks, Laura T., 2021. "Firms and social responsibility: A review of ESG and CSR research in corporate finance," Journal of Corporate Finance, Elsevier, vol. 66(C).
    16. Zhu, Xiuli & Li, Xiaohui & Zhou, Kexin & Yu, Yuying, 2023. "The impact of annual reports transparency and comment letters on the cost of debt: Evidence for China," Pacific-Basin Finance Journal, Elsevier, vol. 77(C).
    17. Zheng, Zhigang & Li, Jiarong & Ren, Xingzi & Guo, Jie Michael, 2023. "Does corporate ESG create value? New evidence from M&As in China," Pacific-Basin Finance Journal, Elsevier, vol. 77(C).
    18. Nirino, Niccolò & Santoro, Gabriele & Miglietta, Nicola & Quaglia, Roberto, 2021. "Corporate controversies and company's financial performance: Exploring the moderating role of ESG practices," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    19. Linzhi Han & Yafang Shi & Jianghua Zheng, 2024. "Can green credit policies improve corporate ESG performance?," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(3), pages 2678-2699, June.
    20. Abdul Waheed & Qingyu Zhang, 2022. "Effect of CSR and Ethical Practices on Sustainable Competitive Performance: A Case of Emerging Markets from Stakeholder Theory Perspective," Journal of Business Ethics, Springer, vol. 175(4), pages 837-855, February.
    21. Aaron K. Chatterji & Michael W. Toffel, 2010. "How firms respond to being rated," Strategic Management Journal, Wiley Blackwell, vol. 31(9), pages 917-945, September.
    22. Andres Guiral & Doocheol Moon & Hun‐Tong Tan & Yao Yu, 2020. "What Drives Investor Response to CSR Performance Reports?," Contemporary Accounting Research, John Wiley & Sons, vol. 37(1), pages 101-130, March.
    23. Olaf Weber, 2014. "Environmental, Social and Governance Reporting in China," Business Strategy and the Environment, Wiley Blackwell, vol. 23(5), pages 303-317, July.
    24. Zhiyang Shen & Jiayi Chen & Kaixuan Bai & Yixuan Li & Yuxin Cui & Malin Song, 2023. "The Digital Impact on Environmental Performance: Evidence from Chinese Publishing," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 59(14), pages 3982-3998, November.
    25. Song, Malin & Peng, Licheng & Shang, Yuping & Zhao, Xin, 2022. "Green technology progress and total factor productivity of resource-based enterprises: A perspective of technical compensation of environmental regulation," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    26. Chen, Zhongfei & Xie, Guanxia, 2022. "ESG disclosure and financial performance: Moderating role of ESG investors," International Review of Financial Analysis, Elsevier, vol. 83(C).
    27. Amal Aouadi & Sylvain Marsat, 2018. "Do ESG Controversies Matter for Firm Value? Evidence from International Data," Post-Print halshs-02007374, HAL.
    28. Bin Li & Lei Xu & Ron McIver & Qian Wu & Ailing Pan, 2020. "Green M&A, legitimacy and risk‐taking: evidence from China’s heavy polluters," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(1), pages 97-127, March.
    29. Xu, Nana & Chen, Jiaqi & Zhou, Fangzhao & Dong, Qing & He, Zhifang, 2023. "Corporate ESG and resilience of stock prices in the context of the COVID-19 pandemic in China," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    30. Jeremy Galbreath, 2013. "ESG in Focus: The Australian Evidence," Journal of Business Ethics, Springer, vol. 118(3), pages 529-541, December.
    31. Shuili Du & Edward Vieira, 2012. "Striving for Legitimacy Through Corporate Social Responsibility: Insights from Oil Companies," Journal of Business Ethics, Springer, vol. 110(4), pages 413-427, November.
    32. Acemoglu, Daron & Golosov, Mikhail & Tsyvinski, Aleh, 2008. "Markets versus governments," Journal of Monetary Economics, Elsevier, vol. 55(1), pages 159-189, January.
    33. Amal Aouadi & Sylvain Marsat, 2018. "Do ESG Controversies Matter for Firm Value? Evidence from International Data," Journal of Business Ethics, Springer, vol. 151(4), pages 1027-1047, September.
    34. Hu, Jun & Fang, Qi & Wu, Huiying, 2023. "Environmental tax and highly polluting firms' green transformation: Evidence from green mergers and acquisitions," Energy Economics, Elsevier, vol. 127(PB).
    35. Qiong Xu & Xin Li & Fei Guo, 2023. "Digital transformation and environmental performance: Evidence from Chinese resource‐based enterprises," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(4), pages 1816-1840, July.
    36. Emanuele Teti & Alberto Dell'Acqua & Paolo Bonsi, 2022. "Detangling the role of environmental, social, and governance factors on M&A performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1768-1781, September.
    37. Abdullah Emre Caglar, 2023. "Can nuclear energy technology budgets pave the way for a transition toward low‐carbon economy: Insights from the United Kingdom," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 198-210, February.
    38. Hariom Manchiraju & Shivaram Rajgopal, 2017. "Does Corporate Social Responsibility (CSR) Create Shareholder Value? Evidence from the Indian Companies Act 2013," Journal of Accounting Research, Wiley Blackwell, vol. 55(5), pages 1257-1300, December.
    39. Li, Rongrong & Wang, Qiang & Li, Lejia & Hu, Sailan, 2023. "Do natural resource rent and corruption governance reshape the environmental Kuznets curve for ecological footprint? Evidence from 158 countries," Resources Policy, Elsevier, vol. 85(PB).
    40. Shakil, Mohammad Hassan, 2021. "Environmental, social and governance performance and financial risk: Moderating role of ESG controversies and board gender diversity," Resources Policy, Elsevier, vol. 72(C).
    41. Antonio Salvi & Felice Petruzzella & Anastasia Giakoumelou, 2018. "Green M&A Deals and Bidders’ Value Creation: The Role of Sustainability in Post-Acquisition Performance," International Business Research, Canadian Center of Science and Education, vol. 11(7), pages 96-105, July.
    42. Zhang, Dongyang, 2023. "Does green finance really inhibit extreme hypocritical ESG risk? A greenwashing perspective exploration," Energy Economics, Elsevier, vol. 121(C).
    43. Kyle Welch & Aaron Yoon, 2023. "Do high-ability managers choose ESG projects that create shareholder value? Evidence from employee opinions," Review of Accounting Studies, Springer, vol. 28(4), pages 2448-2475, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lei Ruan & Heng Liu, 2021. "Environmental, Social, Governance Activities and Firm Performance: Evidence from China," Sustainability, MDPI, vol. 13(2), pages 1-16, January.
    2. Rajesh, R. & Rajeev, A. & Rajendran, Chandrasekharan, 2022. "Corporate social performances of firms in select developed economies: A comparative study," Socio-Economic Planning Sciences, Elsevier, vol. 81(C).
    3. Marie, Mohamed & Qi, Baolei & Elgammal, Mohammed & Elnahass, Marwa, 2024. "A more sustainable future: Can politically connected CEOs spur the nexus between ESG performance and firm financial performance?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 96(C).
    4. Ann Susan Thomas & Ambili Jayachandran & Ajithakumari Vijayappan Nair Biju, 2024. "Strategic mapping of the environmental social governance landscape in finance – A bibliometric exploration through concepts and themes," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 4428-4453, September.
    5. Qian, Shuitu & Yu, Wenzhe, 2024. "Green finance and environmental, social, and governance performance," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 1185-1202.
    6. Fu, Changluan & Yu, Chenyang & Guo, Mengting & Zhang, Lin, 2024. "ESG rating and financial risk of mining industry companies," Resources Policy, Elsevier, vol. 88(C).
    7. Xiaoling Yu & Kaitian Xiao, 2022. "Does ESG Performance Affect Firm Value? Evidence from a New ESG-Scoring Approach for Chinese Enterprises," Sustainability, MDPI, vol. 14(24), pages 1-40, December.
    8. Paola Brighi & Antonio Carlo Francesco Della Bina & Valeria Venturelli, 2022. "Do ESG Investments Mitigate ESG Controversies? Evidence From International Data," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 0084, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    9. Shijun Huang & Pengcheng Du & Yu Hong & Woran Wu, 2024. "Are corporate environmental, social, and governance practices contagious? The peer-effect perspective," Energy & Environment, , vol. 35(8), pages 4049-4082, December.
    10. Simona Galletta & Sebastiano Mazzù, 2023. "ESG controversies and bank risk taking," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 274-288, January.
    11. Fang Chen Kao, 2023. "How do ESG activities affect corporate performance?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(7), pages 4099-4116, October.
    12. Chen, Zhongfei & Xie, Guanxia, 2022. "ESG disclosure and financial performance: Moderating role of ESG investors," International Review of Financial Analysis, Elsevier, vol. 83(C).
    13. D'Souza, Reagan & Ho, Choy Yeing (Chloe) & Yang, Joey W., 2024. "The cost of corporate social irresponsibility for acquirers," Journal of Banking & Finance, Elsevier, vol. 162(C).
    14. Da Gao & Xiaotian Zhou & Jing Wan, 2024. "Unlocking sustainability potential: The impact of green finance reform on corporate ESG performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 4211-4226, September.
    15. Zhonghua Cheng & Lele Han, 2025. "Environmental and social governance performance and enterprise total factor productivity," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 1411-1428, April.
    16. Gaia Soana, Maria, 2024. "Does ESG contracting align or compete with stakeholder interests?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 96(C).
    17. Ramírez-Orellana, Alicia & Martínez-Victoria, MCarmen & García-Amate, Antonio & Rojo-Ramírez, Alfonso A., 2023. "Is the corporate financial strategy in the oil and gas sector affected by ESG dimensions?," Resources Policy, Elsevier, vol. 81(C).
    18. Li, Yunzhong & Zhao, Yu & Ye, Chengfang & Li, Xiaofan & Tao, Yunqing, 2024. "ESG ratings and the cost of equity capital in China," Energy Economics, Elsevier, vol. 136(C).
    19. Tsang, Albert & Frost, Tracie & Cao, Huijuan, 2023. "Environmental, Social, and Governance (ESG) disclosure: A literature review," The British Accounting Review, Elsevier, vol. 55(1).
    20. Yingzheng Yan & Qiuwang Cheng & Menglan Huang & Qiaohua Lin & Wenhe Lin, 2022. "Government Environmental Regulation and Corporate ESG Performance: Evidence from Natural Resource Accountability Audits in China," IJERPH, MDPI, vol. 20(1), pages 1-16, December.

    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:wly:sustdv:v:32:y:2024:i:6:p:6072-6087. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-1719 .

    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.