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Keywords

green mergers and acquisitions, green transformation of heavily polluting enterprises, internal controls, green innovation quality, media pressure

Abstract

The issues of global environmental pollution and ecological destruction have become increasingly severe in recent years. The Chinese government has introduced a series of policies and regulations aimed at promoting sustainable economic development. As key drivers of economic growth, enterprises bear significant responsibility for environmental protection and green development. This responsibility is particularly pressing for heavily polluting enterprises, which produce large quantities of pollutants during their operations, causing considerable environmental damage and facing immense pressures to undergo transformation. Green mergers and acquisitions (M&A), as an emerging strategy for enterprises, provides a pathway for heavily polluting enterprises to acquire advanced environmental protection technologies and management expertise. This study focuses on listed heavily polluting enterprises in China from 2010 to 2021, utilizing annual report data to measure the extent of these enterprises?? green transformation using textual analysis. The research investigates how green M&A can facilitate the green transformation of these enterprises. The study found that green M&A have significantly promoted the green transformation of heavily polluting enterprises, and are still robust after using the propensity score matching method to deal with potential endogenous problems, replacing dependent variable indicators, and using alternative regression models. This indicates that green M&A plays a critical role in enhancing the sustainability of heavily polluting industries. Mechanism analysis shows that internal control and green innovation quality are two channels for green mergers and acquisitions to promote the green transformation of heavily polluting enterprises. Green mergers and acquisitions promote the green transformation of enterprises by improving the level of internal control. Green mergers and acquisitions promote the green transformation of enterprises by improving the quality of green innovation; Internal control and green innovation quality play a chain intermediary role in the process of green M&A affecting the green transformation of heavy polluting enterprises. Green M&A enhances the internal control level of heavy polluting enterprises, thereby improving the quality of green innovation, and thus promoting the green transformation of heavy polluting enterprises; Media pressure negatively moderates the mediating role of internal control between green M&A and green transformation of heavily polluting enterprises. Media pressure weakens the positive impact of green M&A on internal control, indicating that excessive public or media attention may bring additional challenges to enterprises trying to improve their governance structure. Heterogeneity analysis further shows that the impact of green M&A on green transformation varies with enterprise characteristics. The promotion effect of green M&A of non-state-owned enterprises on the green transformation of heavily polluting enterprises is better than that of state-owned enterprises; The green M&A of enterprises of coastal enterprises with strong economic development and regulatory enforcement have a stronger role in promoting the green transformation of heavy polluting enterprises; Large-scale enterprises show stronger effects due to their superior resources and the ability to integrate sustainable practices into their operations, while small-scale green mergers and acquisitions have no significant impact on the green transformation of heavily polluting enterprises. This study provides empirical evidence for the impact of green M&A on the green transformation of heavily polluting enterprises, and deeply analyzes its direct effects and internal mechanisms. It emphasizes the transformation potential of green M&A as a sustainable development approach, and provides a valuable framework for promoting the green transformation of heavily polluting enterprises.

DOI

10. 16315 / j. stm. 2024. 06. 005

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